http://www.slate.com/id/2201641/
"The Community Reinvestment Act applies to depository banks. But many of the institutions that spurred the massive growth of the subprime market weren't regulated banks. They were outfits such as Argent and American Home Mortgage, which were generally not regulated by the Federal Reserve or other entities that monitored compliance with CRA. These institutions worked hand in glove with Bear Stearns and Lehman Brothers, entities to which the CRA likewise didn't apply. There's much more. As Barry Ritholtz notes in this fine rant, the CRA didn't force mortgage companies to offer loans for no money down, or to throw underwriting standards out the window, or to encourage mortgage brokers to aggressively seek out new markets. Nor did the CRA force the credit-rating agencies to slap high-grade ratings on packages of subprime debt."
In another thread I made essentially this same argument. It isn't the CRA or F and F that are primarily at fault. The really toxic stuff are the CDSs, MBS, etc., i.e., the derivatives. These overly creative instruments now have virtually NO MARKET, yet banks worldwide hold billions, maybe trillions of dollars worth of derivatives. They are going to bring down a lot of banks at a few major economies.
Blaming this crisis on F and F and the CRA is essentially a racist argument by McCain who is trying to blame the few poor black and Hispanics who may have gotten mortgage loans beyond their ability to pay.
This is awful stuff by McCain and further incites racial hatred. No one should be doing what McCain is doing.
Obama is an imperfect candidate, but he is a far better man than McCain.
-Robert
"The Community Reinvestment Act applies to depository banks. But many of the institutions that spurred the massive growth of the subprime market weren't regulated banks. They were outfits such as Argent and American Home Mortgage, which were generally not regulated by the Federal Reserve or other entities that monitored compliance with CRA. These institutions worked hand in glove with Bear Stearns and Lehman Brothers, entities to which the CRA likewise didn't apply. There's much more. As Barry Ritholtz notes in this fine rant, the CRA didn't force mortgage companies to offer loans for no money down, or to throw underwriting standards out the window, or to encourage mortgage brokers to aggressively seek out new markets. Nor did the CRA force the credit-rating agencies to slap high-grade ratings on packages of subprime debt."
In another thread I made essentially this same argument. It isn't the CRA or F and F that are primarily at fault. The really toxic stuff are the CDSs, MBS, etc., i.e., the derivatives. These overly creative instruments now have virtually NO MARKET, yet banks worldwide hold billions, maybe trillions of dollars worth of derivatives. They are going to bring down a lot of banks at a few major economies.
Blaming this crisis on F and F and the CRA is essentially a racist argument by McCain who is trying to blame the few poor black and Hispanics who may have gotten mortgage loans beyond their ability to pay.
This is awful stuff by McCain and further incites racial hatred. No one should be doing what McCain is doing.
Obama is an imperfect candidate, but he is a far better man than McCain.
-Robert
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