Community Reinvestment Act

[Crotalus]

I am sick of the Republicans getting bashed for this economy when everything that happened was caused by a law enacted by Carter, rammed down the bank's throats by Clinton, and remedial action prevented by the Democrats during Bush.

The Community Reinvestment Act forced banks to give loans to people that were completely unqualified to pay back the loan. The law was supposed to correct _Redlining_. This is the supposed bank practice of denying loans to people that lived in poorer communities. The banks would be prevented from making a lot of acquisitions and other business unless they could show that 40 something percent of their loans were to underprivileged people. The banks invented "liars loans" where people made completely false applications to get the loans. Everyone knew the loans were toxic, so government controlled Fanny Mae bought the loans and had them guaranteed by an insurance company and sold them all over the world. When the loans failed the insurance company quickly went bankrupt leaving all of us holding the empty bag. Congress rigged it so the Fannie Mae people got rich while this was happening.

The biggest loan maker was Country Wide that made lots of cheap loans to Congressmen. Many that were never repaid.

Iceland bought so many bad derivatives that their economy is in collapse, but you never hear about it.

[Crotalus]

The three who brought down Wall Street.

Here's a quick look into the three former Fannie Mae executives who
brought down Wall Street.


Franklin Raines - was a Chairman and Chief Executive Officer at Fannie Mae.
Raines was forced to retire from his position with Fannie Mae when
auditing discovered severe irregularities in Fannie Mae's accounting
activities. Raines left with a "golden parachute valued at $240 Million in
benefits. The Government filed suit against Raines when the depth of the
accounting scandal became clear.


Tim Howard- was the Chief Financial Officer of Fannie Mae. Howard "was a
strong internal proponent of using accounting strategies that would ensure
a "stable pattern of earnings" at Fannie. Investigations by federal
regulators and the company's board of directors since concluded that
management did manipulate 1998 earnings to trigger bonuses. Raines and
Howard resigned under pressure in late 2004. Howard's Golden Parachute was
estimated at $20 Million!


Jim Johnson - A former executive at Lehman Brothers and who was later
forced from his position as Fannie Mae CEO. Investigators found that
Fannie Mae had hidden a substantial amount of Johnson's 1998 compensation
from the public, reporting that it was between $6 million and $7 million
when it fact it was $21 million." Johnson is currently under investigation
for taking illegal loans from Countrywide while serving as CEO of Fannie
Mae.
Johnson's Golden Parachute was estimated at $28 Million.

[Crotalus]

WHERE ARE THEY NOW?

FRANKLIN RAINES?
Raines works for the Obama Campaign as his Chief Economic Advisor.

TIM HOWARD?
Howard is a Chief Economic Advisor to Obama under Franklin Raines.

JIM JOHNSON?
Johnson was hired as a Senior Obama Finance Advisor and was selected to
run Obama's Vice Presidential Search Committee.

Kinda makes you sick to your stomach.

Our government seems to be rotten to the core !

[gugi]

Our government seems to be rotten to the core !

No, just the democrats, the republicans are the ones trying to fix everything that's wrong, but they can only fight the good fight and can't really win by controlling just one chamber of congress.
It is an election year though, time to test how the great democracy system works.

[decraew]

WHERE ARE THEY NOW?

FRANKLIN RAINES?
Raines works for the Obama Campaign as his Chief Economic Advisor.

TIM HOWARD?
Howard is a Chief Economic Advisor to Obama under Franklin Raines.

JIM JOHNSON?
Johnson was hired as a Senior Obama Finance Advisor and was selected to
run Obama's Vice Presidential Search Committee.

Kinda makes you sick to your stomach.

Our government seems to be rotten to the core !

Well, yes I agree. Those naughty democrats.
But luckily there's still the GOP, with noooooo ties to the finance industry whatsoever.

That being said, both democrats and republicans are to blame for the financial crisis, because both parties supported financial deregulation. Said deregulation and greed by Goldman Sachs & the like are for me to blame.

@LX: I don't wholly agree with your blaming only those people borrowing too much. But don't forget that it's part of the US culture to live on credit. On average they don't save as much as in the eg the Netherlands or Belgium. I don't agree with it but that's the way it seems to be. I know that in practice the crisis started with the CDOs (can someone please explain to me how you can repackage correlated risks and then claim that by combining them the risk is reduced ?) but it could have been another financial product. As I said above: deregulation and greed.

Oh, an interesting read: The Great American Bubble Machine | Politics News | Rolling Stone

[LX_Emergency]

Oh I know it's in general more complex. But it all comes down to: "Don't spend it if you can't afford it"

Governments get into trouble because they spend more than they have, companies get into trouble because of this and people get into trouble because of this.

[U2Bono269]

I've been thinking a lot about similar things lately, what with my own family's financial and employment situation. I guess I should put it out there that I consider myself a moderate, I'm registered as an independent, but I find myself siding with Democrats 80% of the time. I don't think you can trace the issues to any one thing or any one person or any one party. It's a fundamental issue that lies beneath the politics and goes down to the people, to us. We don't hold our politicians accountable for their awful decisions, and we in turn make awful decisions ourselves and expect the awful politicians to rescue us and it's a vicious downward spiral. It's a monster that we allowed to exist. And what's scary is that no one will ever do anything about it because we've become so entrenched in this web of crap that it's almost invisible.

It really makes me upset sometimes to think about it. I'm still in my 20s, and I feel like my opportunity to be successful was gone before I even left college. When Romney's tax returns came out I was flabbergasted. The man makes $15,000 more in one day that my wife and I made last year combined. I work my ass off, sometimes putting in 60 hour weeks as a special ed teacher in a special ed school. My wife is also a teacher who is unable to find a position and tutors about 8 hours a week, at the most. I try to imagine what's going to happen to us in the long term and I can't help but think that the attitudes we and our lawmakers have at this point in time is counterproductive to any sort of real positive growth. I'm coming to accept that there are no real opportunities for us out there and we're going to spend the next decade slogging along in a big swamp of mortgage and student debt.

I agree that we need to throw them all out of washington and start over...I'm not saying with a new government structure or a new constitution (though that could stand some updating), but the people at the center of it are corrupt and our government needs a fresh start. If people and corporations (I don't believe they are the same thing at all, and I think the idea is ludicrous) can declare bankruptcy and start over, then we need to declare that our government is fundamentally "bankrupt" and needs to start over too.

[decraew]

I've been thinking a lot about similar things lately, what with my own family's financial and employment situation. I guess I should put it out there that I consider myself a moderate, I'm registered as an independent, but I find myself siding with Democrats 80% of the time. I don't think you can trace the issues to any one thing or any one person or any one party. It's a fundamental issue that lies beneath the politics and goes down to the people, to us. We don't hold our politicians accountable for their awful decisions, and we in turn make awful decisions ourselves and expect the awful politicians to rescue us and it's a vicious downward spiral. It's a monster that we allowed to exist. And what's scary is that no one will ever do anything about it because we've become so entrenched in this web of crap that it's almost invisible.

It really makes me upset sometimes to think about it. I'm still in my 20s, and I feel like my opportunity to be successful was gone before I even left college. When Romney's tax returns came out I was flabbergasted. The man makes $15,000 more in one day that my wife and I made last year combined. I work my ass off, sometimes putting in 60 hour weeks as a special ed teacher in a special ed school. My wife is also a teacher who is unable to find a position and tutors about 8 hours a week, at the most. I try to imagine what's going to happen to us in the long term and I can't help but think that the attitudes we and our lawmakers have at this point in time is counterproductive to any sort of real positive growth. I'm coming to accept that there are no real opportunities for us out there and we're going to spend the next decade slogging along in a big swamp of mortgage and student debt.

I agree that we need to throw them all out of washington and start over...I'm not saying with a new government structure or a new constitution (though that could stand some updating), but the people at the center of it are corrupt and our government needs a fresh start. If people and corporations (I don't believe they are the same thing at all, and I think the idea is ludicrous) can declare bankruptcy and start over, then we need to declare that our government is fundamentally "bankrupt" and needs to start over too.

I really sympathise with those sentiments.

The game, if I can call it that, is heavily stacked against common people, even more so after Citizens United.

[thebigspendur]

Oh I know it's in general more complex. But it all comes down to: "Don't spend it if you can't afford it"

Governments get into trouble because they spend more than they have, companies get into trouble because of this and people get into trouble because of this.

It's not that simple.

The housing mess goes back to the 1970s. People were flipping houses and making very big money on that and a whole industry employing 10s of millions of people depended on housing prices going only one way. Markets were manipulated and schemes devised to keep it going and more people got even richer and it kept going until even the flimsiest of schemes didn't work any more. These days we only here about all the folks at the end of the cycle who lost everything. We don't hear about all the people who made a mint and laughed all the way to the bank.

I know many think the Govt is the root of all evil and it's too big and over-regulating but the fact is if the Govt had stepped in and said "you want to buy a house you need 10% down minimum and meet minimum income guidelines and proof of income or no house for you" this housing mess would have stopped dead in it's tracks.

So it's really a lesson to be learned about our economic system and what happens when markets are allowed to self regulate and the resultant boom bust cycles.

[decraew]

I know many think the Govt is the root of all evil and it's too big and over-regulating but the fact is if the Govt had stepped in and said "you want to buy a house you need 10% down minimum and meet minimum income guidelines and proof of income or no house for you" this housing mess would have stopped dead in it's tracks.

So it's really a lesson to be learned about our economic system and what happens when markets are allowed to self regulate and the resultant boom bust cycles.

Yeah, but regulation of financial markets is Un American !
And dontcha ferget it !!