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|09-26-2008, 03:46 AM||#1|
*VMBB Senior Chief Of Staff*
Join Date: Jan 2001
Location: Marty Robbins old hometown, Glendale Arizona--a suburb of Phoenix.
WITHOUT EVEN GETTIN' KISSED......
The subject says it all.
Regulations Caused The Credit Collapse
Yes, libs will tell you that deregulation, namely the abolishment of the Glass-Steagall Act, somehow caused the crash in mortgage-backed securities. Nothing could be further from the truth. Here is ammo to squash the lib lies with links for documentation purposes.
1) The set up (underlying cause)
The underlying cause of the crash is that banks gave mortgages to people who did not deserve them. In fact, banks were forced to give out mortgages to people who could not pay them back. The ridiculous Redlining laws were the first step.
The term "redlining" was coined in the late 1960s by community activists in Chicago. It describes the practice of marking a red line on a map to delineate the area where banks would not invest; later the term was applied to discrimination against a particular group of people (usually by race or sex), no matter the geography. During the heyday of redlining, these areas were most frequently black inner city neighborhoods. Later, through at least the 1990s, this discrimination involved lending to lower-income whites, but not to middle- or upper-income blacks.
The 1968 Fair Housing Law was the first in a series of measures that stole money from hard working Americans and gave it to those who could not afford them or had low credit ratings.
In 1977 the scheme to take money from credit-worthy Americans and give it to those who are not continued with the democrat congress and democrat president Jimmy Carter in the form of the Community Reinvestment Act (CRA). Here is the purpose of the act:
Background & Purpose
*The Community Reinvestment Act is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound banking operations. It was enacted by the Congress in 1977 (12 U.S.C. 2901) and is implemented by Regulations 12 CFR parts 25, 228, 345, and 563e. (See Regulation).
*The CRA requires that each insured depository institution's record in helping meet the credit needs of its entire community be evaluated periodically. That record is taken into account in considering an institution's application for deposit facilities, including mergers and acquisitions. (See CRA Ratings) CRA examinations (see Exam Schedules) are conducted by the federal agencies that are responsible for supervising depository institutions: the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Office of Thrift Supervision (OTS) http://www.ffiec.gov/cra/history.htm
As it is clearly evident, banks would be punished for not lending to those that did not have good credit!
1995 Clinton changes: Here is Wikis version of the Clinton changes:
In 1995, as a result of interest from President Bill Clinton's administration, the implementing regulations for the CRA were strengthened by focusing the financial regulators' attention on institutions' performance in helping to meet community credit needs, Clinton forced banks to give out loans to non credit-worthy clients, mostly blacks, and made it a punishable offense for banks to not do that. Just as it is clearly stated in the new law and as Clintons Controller said in 1994, non-compliance would bring the full panoply of all our enforcement armorarium. Further, the Clinton law made it much easier for customers to launch unfounded complaints against the banks. http://www.sundriesshack.com/2008/09/21
Here is what Howard Husock wrote in 2000 about the Clinton changes to the CRA:
Under its [Clintons CRA] provisions, U.S. banks have committed nearly $1 trillion for inner-city and low-income mortgages and real estate development projects, most of it funneled through a nationwide network of left-wing community groups, intent, in some cases, on teaching their low-income clients that the financial system is their enemy and, implicitly, that government, rather than their own striving, is the key to their well-being. One trillion dollars is exactly what most are saying is the amount needed to bail out this mess.
It's not difficult to understand that this led to banks lowering lending standards and issuing risky loans in order to comply with the draconian socialist Clinton laws. High-risk individuals were given high interest sub-prime loans so that banks would be able to stay in business and not run afoul of the far left lunatics in the Clinton administration and the Community Organizers in Chicago.
2) The con!
Also in 1968, the Ponzi scheme was perfected with Fannie Mae and Freddie Mac. Prior to that, Fannie was changed from a Government Agency into the absolute worst of both worlds. Fannie became a hybrid entity whose losses would be defacto guaranteed by the government and whose inept and corrupt leadership would be political appointees.
Due to the Fair Housing Act, banks were ready to close up shop and call it quits because they knew full well that there was no way they could survive if they lent money willy-nilly to those who couldn’t pay back the loans. The socialist thieves were looking for a way to steal your money and with it, to give banks relief from the bad loans that would be on their books.
And so they did. Banks no longer really cared about the credit rating of those with whom it did business because, as long as they met Fannie Mae and Freddie Mac standards, the loans would be sold off to Fannie and Freddie. Those two would then bundle up the mortgages by various criteria and sell them to investors, which were mostly institutional but some individuals, as well. Those institutions bought them for the higher yield because Fannie and Freddie were both quasi-government, socialist companies that may not have carried the full faith and credit of the US Government, but such guarantee was certainly implied. Based on those mortgages and the backing of the US Government, financial firms created all manner of other financial instruments because that is what they do and the American financial entrepreneurial spirit demanded it.
3) The thieves
The problem was, as McCain, Bush, and numerous Republicans pointed out years ago, that the lending standards of Fannie and Freddie got so low that it was a joke. Add to that, fraudulent accounting practices to the tune of tens of billions of dollars and the contents of the Fannie and Freddie pools, could indeed be questionable. All this time, Fannie big shots and their cronies were including Jamie Gorelick,- she who most enabled the 911 terrorists- stole over two hundred million dollars of our money. When reform was proposed by McCain and others, huge sums of cash were given out to democrats in key positions, like Barney Frank and Chris Dodd, to block all of it.
4) The coup de grace
Not long ago, another liberal crony and Clinton favorite, Ken Lays, Enron collapsed in a well-known scandal. As a result, wouldn’t you know it? More regulation, the moronic Sarbox laws.
(Sarbane Oxley) These laws force the holder of even complex long-term instruments to mark them to market. What does that mean? Well, if you have a share of IBM, it's easy. You look at the price of the darn thing and you know how much it's worth that day. But what if you hold a 30-year piece of paper that is being serviced and will, when the 30 years are up, be paid off or eventually paid off when the property is sold? What if you hold an exotic derivative that is based on a pool of these loans? Why in Gods name do you have to mark it to market? Further more, to what market? Well, it doesn’t matter because well-meaning libits say that you have to and if somehow you can’t, well your reserves have to increase and your ratings will decrease and you will not be able to stay in business and bankrupt you go! Well, here is the thing. When a weaker institution goes under, the price of those products that had to be marked to market goes down. Now, all other institutions that hold similar securities will have to mark their holdings lower. So, when Chuck Schumer caused IndyMac to collapse by disclosing confidential information, he did it intentionally knowing full well that it would drag with it the financial system of our country!!
It wasn’t deregulation that caused the collapse but rather misguided regulation manipulated by liberal crooks like Chuck Schumer, Barney Frank, Jamie Gorelick, James Johnson, Chris Dodd, Franklin Raines, Chicago Community Activists, and a long line of socialist crooks and thieves.
|09-26-2008, 01:22 PM||#2|
Join Date: Sep 2008
Re: WITHOUT EVEN GETTIN' KISSED......
Dead on rooter. Now, try getting the unthinking masses to hear and understand it. Somehow we (the vets) came out and kicked Kerry's butt. We showed him up for what he is. A coward and to me a lying traitor. Now, we have it to do again. Band of brothers, spread the word. If Obama is elected, this war against a far worse enemy is lost. I know it can't be won soon and our grandchildren will most likely be fighting it till they or we are dead. If we must fight again to beat the aholes, gear up. It's off our dead asses and on our dying feet one more time. Dan Hawk US Army ret. (Hopefully)