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#1054520 - 09/30/08 08:42 PM Re: Why the Bail Out is a bad idea... Hated By Some
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::disappointed again::
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#1054522 - 09/30/08 08:43 PM Re: Why the Bail Out is a bad idea... Sinatra Fan
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Originally Posted By: Sinatra Fan
Originally Posted By: McCain Economics
let's not get caught up in semantics


Oh, come on, Ron, that's your very metier!

i have never heard that term before but

(i view this problem much more practically than philosophically as with most discussions that we have here though)

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#1054523 - 09/30/08 08:43 PM Re: Why the Bail Out is a bad idea... Hated By Some
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Originally Posted By: McCain Economics
well, i would rephrase that as lack of appropriate oversight but yes. i'd throw in poor enforcement as well.


(lack of enforcement and lack of oversight--> synonymous really)

I agree lack of regulatory oversight was a contributing factor that could have mitigated and/or rpevented much of the mess. However, I want it to be clear that the idea being pushed by the One that the lack of regulatory oversight was a Republican shortcoming has already been shown, even by members of his own party (Bill Clinton)to be largely inaccurate.
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#1054526 - 09/30/08 08:44 PM Re: Why the Bail Out is a bad idea... Yossarian
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Originally Posted By: Yossarian
Quote:
waiting with baited breath


Either you mean "bated breath" or you have been snacking on worms and minnows.
The 1st one.
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#1054533 - 09/30/08 08:47 PM Re: Why the Bail Out is a bad idea... TheManofSteel
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that's fine with me, seriously. like i said, i am trying to be politically detached from the presidential politics on this but the connections do exist.

surely you aren't surprised that the candidates are pointing fingers.

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#1054537 - 09/30/08 08:54 PM Re: Why the Bail Out is a bad idea... Hated By Some
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Originally Posted By: McCain Economics
that's fine with me, seriously. like i said, i am trying to be politically detached from the presidential politics on this but the connections do exist.

surely you aren't surprised that the candidates are pointing fingers.


not surprised but always disappointed.
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#1054548 - 09/30/08 08:58 PM Re: Why the Bail Out is a bad idea... FBH
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I wholeheartedly agree

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#1054566 - 09/30/08 09:07 PM Re: Why the Bail Out is a bad idea... nbk2yj2
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Me too, it's all about the blame game, very disappointing.
Last edited by Boatn Shasta; 09/30/08 09:09 PM.
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#1054575 - 09/30/08 09:09 PM Re: Why the Bail Out is a bad idea... TheManofSteel
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Originally Posted By: TheManofSteel
Originally Posted By: McCain Economics
that's fine with me, seriously. like i said, i am trying to be politically detached from the presidential politics on this but the connections do exist.

surely you aren't surprised that the candidates are pointing fingers.


not surprised but always disappointed.

just like your former clients/apparent lack of clients.

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#1054680 - 09/30/08 10:15 PM Re: Why the Bail Out is a bad idea... Hated By Some
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Originally Posted By: McCain Economics
Originally Posted By: TheManofSteel
Originally Posted By: McCain Economics
that's fine with me, seriously. like i said, i am trying to be politically detached from the presidential politics on this but the connections do exist.

surely you aren't surprised that the candidates are pointing fingers.


not surprised but always disappointed.

just like your former clients/apparent lack of clients.


Awww, your inferiority complex kicking in again?? Poor baby, keep your chin up. My clients are sending me on a multi-nation trip to form the structure of their AML Program worldwide. Your clients............sending you on your pizza route, have fun Ron.
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#1054685 - 09/30/08 10:39 PM Re: Why the Bail Out is a bad idea... TheManofSteel
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Originally Posted By: TheManofSteel
Originally Posted By: Bonnie M
I have said it before - blaming CRA for this crises is like blaming McDonald's for obesity rates in this country.

which, based upon your analogy, would be saying that the CRA is a contributing factor.


So you are in favor of more government regulation of McDonalds?
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#1054695 - 09/30/08 10:54 PM Re: Why the Bail Out is a bad idea... Princess Romeo
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Originally Posted By: Bonnie M
Originally Posted By: TheManofSteel
Originally Posted By: Bonnie M
I have said it before - blaming CRA for this crises is like blaming McDonald's for obesity rates in this country.

which, based upon your analogy, would be saying that the CRA is a contributing factor.


So you are in favor of more government regulation of McDonalds?


Nope, but I am in favor using the free market (just as McDonalds and other fast food chains do for their own enterprises), to promote and expand citizen knowledge of nutrition, healthy lifestyle, and informed decision-making with respect to the food and beverage industry and its practices. And in the process, expose to the citizenry the facts behind the food and beverage industry and its marketing practices.
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#1054700 - 09/30/08 10:58 PM Re: Why the Bail Out is a bad idea... Blade Scrapper
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Originally Posted By: NoPublicFinance
Not blaming it, just saying it's creation was based on false pretenses.

I don't think the Community Reinvestment Act is based on false pretenses, I just think the whole approach to dealing with the pretenses has been flawed from the beginning. William Proxmire was a key proponent of this legislation and I think it grew into something he never forsaw.

I agree with something former FDIC Chairman William Issacs said a long time ago. He said the CRA should simply be a disclosure excercise. Let banks simply disclose key data to the public about it's community development activities and let the public decide if a bank is worthy of its business. The exam then simply becomes verifying the accuracy of the disclsoures.

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#1054722 - 09/30/08 11:20 PM Re: Why the Bail Out is a bad idea... buggs
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I am much more in favor of a wholistic, realistic approach that bfings enforcement , accountability and ends fraud and the little guy being taken advantage of.

I am in favor of more regulations, even if the current regulations we have go unenforced.

I am arguing not semantics, but real world solutions, even though my every thought is brought to me care of academicians whom have never spent a momemt in the real world.

I think we need a nuiassanced approach that takes these facts into account.

Its simple.

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#1054732 - 09/30/08 11:37 PM Re: Why the Bail Out is a bad idea... TheManofSteel
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Originally Posted By: TheManofSteel
Originally Posted By: Bonnie M
Originally Posted By: TheManofSteel
Originally Posted By: Bonnie M
I have said it before - blaming CRA for this crises is like blaming McDonald's for obesity rates in this country.

which, based upon your analogy, would be saying that the CRA is a contributing factor.


So you are in favor of more government regulation of McDonalds?


Nope, but I am in favor using the free market (just as McDonalds and other fast food chains do for their own enterprises), to promote and expand citizen knowledge of nutrition, healthy lifestyle, and informed decision-making with respect to the food and beverage industry and its practices. And in the process, expose to the citizenry the facts behind the food and beverage industry and its marketing practices.


What happened to CRA was it became a favorite whipping boy for bankers and some conservatives who saw it as restricting free trade and a drain on profit. Let us not kid ourselves, there were (are) bankers who would still "red-line" if they could. I cannot even repeat some of the comments made to me by lenders and bank executives about certain "areas" in town and their residents.

The CRA environment was not helped by some short-sighted examiners who seemed to take delight in discrediting the truly worthwhile programs that took some thought and effort along with meaningful input and cooperation from the community, and would instead focus on the stupid Mortgage Backed Securities and Tax Credit projects.

I still think it is a far, far stretch to say this mortgage meltdown is due to CRA. Most of the really crazy loans that I saw were to middle and upper income people (as defined by CRA) or even the "stated income" loans, and none of those loans would be eligible for CRA credit so there would have been no CRA pressure on the banks to do them. And let's face it - MOST of these disastrous loans came from mortgage brokers who, for the most part, were (and still are) unregulated.

But - it's a very convenient target right now in a super-heated political arena.

The problem I am having as I wade through most of this rhetoric is that no "market" system is able to stand on its own.

Capitalism in its purest form is self-devouring and favors one winner in the end at the expense of everyone else (the losers.) It is vicious and merciless on those who will not "kill or be killed."

Socialism in its purest form fosters entropy to the point where all is even which produces a stifling effect on enterprise and innovation. Lulled by this complacency, everyone suffocates under a blanket of bureaucracy.

What is lacking is balance between these two extremes which is a tricky thing to master and maintain. It is a never-ending task involving constant course corrections which means it does not fit nicely into a rhetorical box that can be spewed effortlessly over the airways, blogs and print.

I mean why work that hard when you can simply take pot shots at what others say and do? And pot shots are even easier when someone cuts and pastes small sections of what is written or said. (My favorite rhetorical tactic!)
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#1054754 - 10/01/08 12:42 AM Re: Why the Bail Out is a bad idea... Princess Romeo
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not to slide back into the compliance mindset again but if you can demonstrate that your standards are objectively applied--even if the other guy is making loans to those lower income msas-- you are fine. you can't pull a "well jimmy jumped off the bridge. you've been asking me this for years and, frankly, i had to call your bluff."

i find the funniest thing that some still try to rally the troops by beating the "free markets" drum.

the odd thing is, i'm a total capitalist but i interpret that term a bit differently than some do.

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#1054765 - 10/01/08 01:39 AM Re: Why the Bail Out is a bad idea... Princess Romeo
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Originally Posted By: Bonnie M
I still think it is a far, far stretch to say this mortgage meltdown is due to CRA.

I agree. But CRA has become shorthand for a lot of the activities by FNMA/FHLMC - the subprime paper they were buying because they promised to do more to promote home ownership for those who traditionally would not have qualified - that were the price enacted by Democrats for their continued support in light of their accounting/bonus scandals.

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#1054807 - 10/01/08 04:28 AM Re: Why the Bail Out is a bad idea... Jokerman
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Originally Posted By: Jokerman
Originally Posted By: Bonnie M
I still think it is a far, far stretch to say this mortgage meltdown is due to CRA.

I agree. But CRA has become shorthand for a lot of the activities by FNMA/FHLMC - the subprime paper they were buying because they promised to do more to promote home ownership for those who traditionally would not have qualified - that were the price enacted by Democrats for their continued support in light of their accounting/bonus scandals.


So CRA was the victim here - held for ransom by greedy executives who managed to fool naive Democrats?

Here's a thought on how to cool things down - eliminate points and YSP's completely on anything other than a fully amortizing loan and see how quickly these "exotics" disappear!
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#1054832 - 10/01/08 11:44 AM Re: Why the Bail Out is a bad idea... Princess Romeo
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Perhaps they should point the finger at greed of people. Greed of the mortgage brokers and the investors that bought those mortgages, the people who bought these off the hook homes instead of modest ones, because they have to have everything now, greed of the banks that actually did get involved in making these risky loans and their ridiculously overpaid CEOs.

People do not know how to save and their "Ihave to have it now mentality" is a big part of this problem.

"A starter home, :gasp: OMG! No way, I have to have the McMansion!"
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#1054890 - 10/01/08 01:02 PM Re: Why the Bail Out is a bad idea... DeeQ
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DQ, I couldn't agree with you more. The blame starts with the consumer (some of them) and right up the chain. Period. People used their homes like ATM machines. If a banker tells them they "qualify for $X", they should decide if they feel comfortable paying X every month-what someone can qualify for and what they feel comfortable paying are 2 different things. We don't take into account many many expenses homeowners run across, as well as other types of expenses-repairs, general upkeep, furnishings, utilities, child care, etc. Anyone that allows a banker/lender to decide what they can afford is foolish.
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#1054905 - 10/01/08 01:13 PM Re: Why the Bail Out is a bad idea... TB 12
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Quote:
We don't take into account many many expenses homeowners run across, as well as other types of expenses

sounds like a pretty poor model to me. i guess it is easy when the customer is deciding what you will lend to them though.

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#1055027 - 10/01/08 02:27 PM Re: Why the Bail Out is a bad idea... TB 12
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Originally Posted By: Sox in 07
DQ, I couldn't agree with you more. The blame starts with the consumer (some of them) and right up the chain. Period. People used their homes like ATM machines. If a banker tells them they "qualify for $X", they should decide if they feel comfortable paying X every month-what someone can qualify for and what they feel comfortable paying are 2 different things. We don't take into account many many expenses homeowners run across, as well as other types of expenses-repairs, general upkeep, furnishings, utilities, child care, etc. Anyone that allows a banker/lender to decide what they can afford is foolish.


While this is true to some extent, I recall quite vividly when I bought my first home a few years back. My lender kept trying to tell me I could afford a higher payment than I thought I could. She kept pointing out the tax benefits of the deductions, and how that would save me money. She suggested increasing my claimed exemptions to bring home more money each paycheck. If I had simply accepted her word as an expert, and let's face it, most Americans look at the loan officer as an expert who wouldn't dream of loaning them more than they could really afford. After all, that's just asking for the loan to fail, right, and lenders who do that should lose their jobs. But in any case, I accepted her word, but then did my own research, and it wasn't "easy" to do either, calculating how much interest I would be paying, how much tax I would be paying, etc. before deciding on which home I wanted. Would most people do what I did, and confirm what the lender is telling them? Probably not. Why? Because COMMON SENSE says that it is not in the bank's interest to make me a loan I can't afford. But yet banks did exactly that, didn't they?

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#1055035 - 10/01/08 02:28 PM Re: Why the Bail Out is a bad idea... Princess Romeo
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Originally Posted By: Bonnie M
So CRA was the victim here - held for ransom by greedy executives who managed to fool naive Democrats?

I don't know what this means. Are you arguing that FNMA/FHLMC weren't the source of much of the systemic problem?

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#1055036 - 10/01/08 02:28 PM Re: Why the Bail Out is a bad idea... B_F
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imo, bankers should not be giving tax advice.
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#1055054 - 10/01/08 02:32 PM Re: Why the Bail Out is a bad idea... B_F
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Ron-just go away.

BF-did you go with what the LO said, or did you trust your instincts?
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