DISQUS

BrunoBehrend · 1 year ago

It may not have been the source of today's problem, but it is still a misguided act.

Focusing more on Grameen style lending would have been better. Lending to small businesses is a better bet than lending to homeowners, and doing both wouldn't hurt.

Why each of these banks in depressed areas doesn't have an "Entrepreneurship Officer" and corresponding program is beyond me.

The ossification of the banking sector borders on mental retardation. They can invent absurd instruments destined to lose most of their value, but they'd never stoop to teaching a poor black kid what a balance sheet and income statement are, and then connecting him with a mentor/apprentice relationship.

Perry · 1 year ago

"The subprime mortgages that have failed left and right are the antithesis of the carefully designed, well-supervised loans provided by tightly regulated banks. No law forced a mob of unregulated lenders to make loans in poor neighborhoods. Rather, mortgage companies and Wall Street financiers saw a business opportunity in subprime lending, where the risk of default was high but so were the interest rates."

This is completely false and misleading. Had they not 'made the loans' they got sued and black listed (Obama did some suing on ACORN's behalf) with the rule changes at Fannie and Freddie level making the ponzi scheme possible, the industry went along then abuse went into high gear.

They blew a bubble and skimmed billions all enable buy the government. The point is we have a constitution to protect us from the government, from this kind of thing. It failed because of modern liberalism.

orrinj · 1 year ago

The Constitution can't protect you from Wall Street manipulations.

Perry · 1 year ago

Please....I mean really, this is getting stupid and becoming a huge waste of time.

As though wall street wasn't connected via a money trail to the rule changes which allowed IB trading in the 'bad loans' from Fan and Fred.

Had Fan and Fred either not existed as GSE's and/or the late 90's early 2000's legislative changes enabling the conduit of trading highly leveraged bad loans from Fan and Fred through the Investment banks - none of this could have happened.

You Orrin, can't face the fact we have lost control of the government, and it is now being used as a vehicle for outright theft...all legally of course.

Perry · 1 year ago

"Had Fan and Fred either not existed as GSE's and/or the late 90's early 2000's legislative changes enabling the conduit of trading highly leveraged bad loans from Fan and Fred through the Investment banks"

Should read:

Had Fan and Fred either not existed as GSE's and/or the late 90's early 2000's legislative changes enabling the conduit of trading highly leveraged bad loans from Fan and Fred through the Investment banks NOT OCCURRED - ...

orrinj · 1 year ago

Precisely. Wall Street was the problem. They crafted instruments more complex than they could understand and misinterpreted the meaning of high gas prices.

Mikey NTH · 1 year ago

Or congressional manipulations. The subprime loans were a problem in that the borrowers weren't coached/assisted on how to avoid defaulting. Such assistance and periodic follow-ups to see how things are going. Perhaps the two should have gone together.

Perry · 1 year ago

Mike, yes on the congressional manipulation. After all, Congress is part of the government. Had Fan and Fred not been allowed to take high risk loans, loans judged bad by all historical industry standards, then allowed to repackages them in the form of product, sold to Investment Banks who created highly leveraged derivatives for use in countless ways...we wouldn't have had a problem!

Writing bad loans is one thing, I think its stupid policy, Oj brillant policy but writing bad loans which become the heart of a highly leveraged, highly skimmed bubble is just shear thievery.

orrinj · 1 year ago

They aren't bad loans. though they should have been bettered.

orrinj · 1 year ago

They weren't bad loans, though they should have been bettered. If they'd been at lower rates they wouldn't have been attractive for bogus packaging.

orrinj · 1 year ago

The problem is the loans weren't subprime.

Rob · 1 year ago

One key initiative of this sort, the state's SoftSecond mortgage program, has a delinquency rate of 1.8 percent - compared with about 5 percent for all mortgages in Massachusetts.

orrinj · 1 year ago

Don't bother people with facts when they have their hate on.

Adam · 1 year ago

So far the best analysis I've read of the whole sub prime crisis is in Plunder by Danny Schechter. He not only bases his analysis on current events, but also goes behind the scenes, identifying the key players and culprits of the financial industry, government deregulation and the media.