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Topic:
There are still tons of laws on the books whose primary purpose it to...
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paulg_68
Posts: 2,469
Registered: 2009-7-27 18:45:54
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Date Posted:
1/1/00 12:00am
Subject:
There are still tons of laws on the books whose primary purpose it to...
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get banks to lend money to people that the free market would otherwise not deem credit worthy.
Congress (and state legislatures) can't fix this problem without admitting they caused it.
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Yukishiro1
Posts: 3,243
Registered: 2002-9-20 23:52:57
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Date Posted:
1/1/00 12:00am
Subject:
There are still tons of laws on the books whose primary purpose it to...
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What problem?
The loans that caused the financial meltdown weren't loans the government forced banks to give. Banks that weren't part of the CRA had higher default rates on their mortgages than those who were.
It seems like the gubmint's guidelines caused fewer problems than leaving things up to the free market.
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Mastara
Posts: 1,446
Registered: 2004-12-29 22:52:21
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Date Posted:
1/1/00 12:00am
Subject:
There are still tons of laws on the books whose primary purpose it to...
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many times I would have liked a loan and couldnt get one with a 720 credit score :/ QQ
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paulg_68
Posts: 2,469
Registered: 2009-7-27 18:45:54
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Date Posted:
1/1/00 12:00am
Subject:
There are still tons of laws on the books whose primary purpose it to...
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Yukishiro1 posted:
The loans that caused the financial meltdown weren't loans the government forced banks to give.
How do you differentiate between loans that "caused the finantial meltdown" and loans that didn't?
Why do you focus only on loans that "the government forced banks to give" and ignore ones they merely incentivized or encouraged them to give?
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If you wish to make an apple pie from scratch...
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"Everyone has a chance to become rich." - Groucho48
"Most of the human wealth on earth exists between the ears of live human beings." - theredkay1
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Yukishiro1
Posts: 3,243
Registered: 2002-9-20 23:52:57
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Date Posted:
1/1/00 12:00am
Subject:
There are still tons of laws on the books whose primary purpose it to...
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How did they incentivize them? If you are going to cry about the mortgage deduction feel free I guess (and I don't disagree) but that's been around for ages and may have contributed but clearly wasn't the cause of the meltdown.
The highest rate of defaults was on people buying second homes for investment purposes. Those arn't the people Congress was trying to strongarm banks into lending to.
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paulg_68
Posts: 2,469
Registered: 2009-7-27 18:45:54
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Date Posted:
1/1/00 12:00am
Subject:
There are still tons of laws on the books whose primary purpose it to...
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Yukishiro1 posted:
How did they incentivize them?
The main way was by forcing fannie and freddie to buy up pretty much every loan to poor people regardless of whether or not they were good loans. Why should banks care about someone's creditworthiness if they can just take a small up front profit and and immediately dump the loan?
Yukishiro1 posted:
The highest rate of defaults was on people buying second homes for investment purposes. Those arn't the people Congress was trying to strongarm banks into lending to.
There's a lot of opportunity to make money riding a bubble to the top. Investors who don't get out in time always get killed.
The root cause of the problem is what caused the bubble. Not who got caught in it at the end.
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If you wish to make an apple pie from scratch...
http://www.youtube.com/watch?v=zSgiXGELjbc
"Everyone has a chance to become rich." - Groucho48
"Most of the human wealth on earth exists between the ears of live human beings." - theredkay1
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GrilledCheez
Title: The Lord's Balls
Posts: 1,060
Registered: 2006-3-22 11:06:32
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Date Posted:
1/1/00 12:00am
Subject:
There are still tons of laws on the books whose primary purpose it to...
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paulg_68 posted:
The root cause of the problem is what caused the bubble. Not who got caught in it at the end.
unfortunately the truth of that argument makes everything else you've said about it moot. if getting in and riding the bubble was smart and good and getting caught at the end was understandable and the analysis of those folks is worthless then nobody is at fault. because poor people who rode the bubble and didn't default are smart, and the banks who loaned to them are smart as well. poor people who defaulted when it crashed are irrelevant.
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paulg_68
Posts: 2,469
Registered: 2009-7-27 18:45:54
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Date Posted:
1/1/00 12:00am
Subject:
There are still tons of laws on the books whose primary purpose it to...
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The government caused the bubble.
They increased demand without a commensurate increase in supply. That drove the price up which brought in the speculators.
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If you wish to make an apple pie from scratch...
http://www.youtube.com/watch?v=zSgiXGELjbc
"Everyone has a chance to become rich." - Groucho48
"Most of the human wealth on earth exists between the ears of live human beings." - theredkay1
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Kjarhall
Title: The Pungent One
Posts: 915
Registered: 2002-3-1 15:47:21
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Date Posted:
1/1/00 12:00am
Subject:
There are still tons of laws on the books whose primary purpose it to...
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paulg_68 posted:
The government caused the bubble.
They increased demand without a commensurate increase in supply. That drove the price up which brought in the speculators.
How many false premises are you going to pack into this thread? 
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Ashmaele
Title: Pastor of Muppets
Posts: 1,809
Registered: 2002-1-15 08:30:50
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Date Posted:
1/1/00 12:00am
Subject:
There are still tons of laws on the books whose primary purpose it to...
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paulg_68 posted:
The government caused the bubble.
They increased demand without a commensurate increase in supply. That drove the price up which brought in the speculators.
 Yeah those speculators jumped in but ONLY after all those poor people drove prices through the roof!
Sometimes you just can't argue with this kind of stupid, you have to just stand back and laugh.
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