[Clyde Slick]

On 9 Oct, 13:34, ScottW wrote:
On Oct 9, 7:34*am, MiNe 109 * wrote:





In article
,
*Clyde Slick wrote:

On 9 Oct, 06:38, MiNe 109 * wrote:
In article
,
*Clyde Slick wrote:

On 8 Oct, 15:53, "Harry Lavo" wrote:

It is the 25-30% of totally ignorant Americans that are slowly
destroying
this country through their voting choices. *Was it Franklin or
Jeffereson
who pointed out that if Democracy were to fail, it would be because
people
did not educate themselves?

true, voters should educate themselves about the Dem's
contributions to our economioc mess. (as well as the rep's
contributions)

The Democratic responsibility consists of agreeing to Republican
proposals.

boy are you blind, the whole sub prime binge
was a democratic push that some
reps like Bush, went along with,
others didn't. reps tried to reign it in.
in 2004-5 the regulators testified before
congress about the isks, thay were
lambasted by dems like Waters,
who said all was well with Freddie and Fannie.
Check the C Span archives.

Check out Phil Gramm's deregulation back in 2000 and Greenspan's
cheerleading that markets were sufficient to regulate derivatives.

*Good point.

*"The bills were introduced in the U.S. Senate by Phil Gramm (R-Texas)
and in the U.S. House of Representatives by Jim Leach (R-Iowa). The
bills passed the Senate on a 54-44 vote along party lines (53
Republicans and one Democrat in favor; 44 Democrats opposed).[1] After
passing both the Senate and House the bill was moved to a conference
committee to work out the differences between the Senate and House
versions. Democrats agreed to support the bill after Republicans
agreed to strengthen provisions of the Community Reinvestment Act and
address certain privacy concerns.[2] On November 4, the final bill
resolving the differences was passed by the Senate 90-8 [3] and by the
House 362-57.[4] This 'veto proof legislation' was signed into law by
President Bill Clinton on November 12, 1999.[5]

http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

In 1999 the Congress enacted and President Clinton signed into law the
Gramm-Leach-Bliley Act, also known as the "Financial Services
Modernization Act," which repealed the part of the Glass-Steagall Act
prohibiting a bank from offering a full range of investment,
commercial banking, and insurance services. The bill was killed in
1998 because Senator Phil Gramm wanted the bill to expand the number
of banks which no longer would be covered by the CRA. He also demanded
full disclosure of any financial deals which community groups (LIKE
ACORN) *had with banks, accusing such groups of "extortion." In 1999
Senators Christopher Dodd and Charles E. Schumer broke another
deadlock by forcing a compromise between Gramm and the Clinton
administration which wanted to prevent banks from expanding into
insurance or securities unless they were compliant with the CRA. In
the final compromise, the CRA would cover bank expansions into new
lines of business, community groups would have to disclose certain
kinds of financial deals with banks, and smaller banks would be
reviewed less frequently for CRA compliance.[28][29][30] On signing
the Gramm-Leach-Bliley Act, President Clinton said that it,
"establishes the principles that, as we expand the powers of banks, we
will expand the reach of the [Community Reinvestment] Act".[31]

http://en.wikipedia.org/wiki/Communi...#Legislative_c...

The root of the problem was opening the door to subprime mortgages
which CRA certainly encouraged if not directly enabled.
Gramm-Leach-Bliley expanded the impact of the problem by consolidating
banking services under one roof.
The bubble of housing prices was fueled by a subprime frenzy which was
at least encouraged by the CRA and other like minded legislation to
increase home ownership among the poor. *These efforts forced banks to
lend money to non credit worthy customers. *Other banks not required
to comply with CRA could not pass up *the massive short term profits
subprime lending was offering as the cost of money dipped to near zero
( the Fed overreacted to the recession of 2000-2002) and retain share
value when other banks were showing such huge profits and drawing away
investors/shareholders.
Fannie Mae and Freddie Mac for example had no business in buying
subprime loans and contributing to the eventual collapse of morgage
backed securities.
But they started on that path with strong encouragement from their
democratic backers in the house and senate who had embarked on a
socialist program of home ownership

http://www.nhi.org/online/issues/80/fanny.html

"For the years 1993 and 1994, the GSE Act established a set of
escalating performance goals that measured, as a percentage of the
GSEs' total business, the availability of housing financing for low-
and moderate-income families; for very-low-income families; and for
families living in central cities, rural areas, and other underserved
areas. The Act directed HUD to examine these goals and the assumptions
upon which they are based and then develop new goals for 1995, 1996,
and beyond.

The proposed regulations set minimum acceptable activity in numerical
terms for housing goals in each of the three categories. Goals are set
in each category for both single family homeownership and multi-family
mortgages. In each case, the proposed rule increases from the previous
two years the level of affordable housing business each GSE must set.

The proposed regulations differ from the interim regulations in three
significant ways: the definition of an underserved area; a requirement
that the GSEs inform HUD of fair housing violations by lenders; and an
expanded interpretation of when the GSEs are required to take new
business activity for review and approval to the Secretary of HUD. "

Additionally the securitization of mortgages made the acceptance of
credit risk a game of musical chairs, who was left holding the
securities when the prices started to fall.
This is of course aggravated in the extreme by the simple fact that
mortgage backed securities aren't valued by how much money they will
make via mortgage interest minus defaults, but by how much they can be
sold on the security market at any point in time.
This is the "mark to market" issue often discussed of late.
When investors lost faith that credit rating agencies had any abilty
to estimate the number of loans in a package that will default nor the
debt to equity (value of the homes) ratio, the market values of the
securities plunged far below what they will ultimately earn from
mortgage interest income.

You may now return to your usual delusional ignorant rants.

ScottW-

"at least" his are short, inlike sHHH'S