kallend 2,027 #51 September 26, 2008 QuoteQuotePlease provide evidence that the government forced any bank to make credit default swaps or trade in other convoluted derivatives. Why? That is not what is being talked about here. Yes it is.... The only sure way to survive a canopy collision is not to have one. Quote Share this post Link to post Share on other sites
rushmc 23 #52 September 26, 2008 QuoteQuoteQuotePlease provide evidence that the government forced any bank to make credit default swaps or trade in other convoluted derivatives. Why? That is not what is being talked about here. Yes it is. OK, then Carter, Clinton and the Dems CRA are what started it"America will never be destroyed from the outside, if we falter and lose our freedoms, it will be because we destroyed ourselves." Abraham Lincoln Quote Share this post Link to post Share on other sites
billvon 2,991 #53 September 26, 2008 >OK, then Carter, Clinton and the Dems CRA are what started it Ah. So you have evidence that Clinton and/or Carter FORCED banks to use credit default swaps? Bonus question - which US politician removed the safeguards from credit default swaps, claiming it would be good for the US economy? Quote Share this post Link to post Share on other sites
jcd11235 0 #54 September 27, 2008 Quoteit was PART of it. Fair housing bull shit is what is the cause I see that you didn't read the study to which my post linked.Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
jcd11235 0 #55 September 27, 2008 QuoteIt can only be corporations for you can it. Project much?Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
jcd11235 0 #56 September 27, 2008 Quote Quote Please provide evidence that the government forced any bank to make credit default swaps or trade in other convoluted derivatives. Why? That is not what is being talked about here. You want to talk about that stop derailing this thread and start your own. Mortgages are what we are talking about, if these istruments are part of that then they got the same starting place too You really don't understand, do you? CRA banks were less likely to resell the mortgages. They were more careful with the underwriting of their mortgages, in order to ensure that borrowers were capable of paying back the loans.Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
rushmc 23 #57 September 27, 2008 Quote Quote Quote Please provide evidence that the government forced any bank to make credit default swaps or trade in other convoluted derivatives. Why? That is not what is being talked about here. You want to talk about that stop derailing this thread and start your own. Mortgages are what we are talking about, if these istruments are part of that then they got the same starting place too You really don't understand, do you? CRA banks were less likely to resell the mortgages. They were more careful with the underwriting of their mortgages, in order to ensure that borrowers were capable of paying back the loans. "America will never be destroyed from the outside, if we falter and lose our freedoms, it will be because we destroyed ourselves." Abraham Lincoln Quote Share this post Link to post Share on other sites
kallend 2,027 #58 September 27, 2008 Quote Quote Quote Quote Please provide evidence that the government forced any bank to make credit default swaps or trade in other convoluted derivatives. Why? That is not what is being talked about here. You want to talk about that stop derailing this thread and start your own. Mortgages are what we are talking about, if these istruments are part of that then they got the same starting place too You really don't understand, do you? CRA banks were less likely to resell the mortgages. They were more careful with the underwriting of their mortgages, in order to ensure that borrowers were capable of paying back the loans. Let's see. You've made a lot of blame claims but: you have not produced one shred of evidence that CRA loans were responsible for the bank failures, you have not produced one shred of evidence that the govt forced any bank to trade in a debt swapping scheme, you have not produced one shred of evidence that the govt forced any bank to trade in other packaged (securitized) debt instruments or convoluted derivatives, you have not produced one shred of evidence that the govt forced any ratings agency to issue inflated ratings to said investments. So I guess you really have nothing.... The only sure way to survive a canopy collision is not to have one. Quote Share this post Link to post Share on other sites
georgerussia 0 #59 September 28, 2008 Quote "Dire consequences" might mean that no one, not even you, can get a mortgage for any price. I do not see it happens. Basically conventional mortgage loans is free income for the bank, as the loan amount is guaranteed by government (Fannie/Freddy). Non-conventional loans (jumbo or subprime) will be hard to get - but it is not/should not be majority anyway. I do not expect any problems with other loans guaranteed by the government - like student loans or VA-backed mortgage loans. Consumer or business loans will suffer (they do already), but I would not say it is necessary bad thing.* Don't pray for me if you wanna help - just send me a check. * Quote Share this post Link to post Share on other sites
georgerussia 0 #60 September 28, 2008 Quote I found the name "Community Reinvestment Act" So did CRA require banks to provide a "stated income" loans, which, I repeat, were mostly for the people who would lie about their income to buy more housing than they could really afford?* Don't pray for me if you wanna help - just send me a check. * Quote Share this post Link to post Share on other sites
billvon 2,991 #61 September 29, 2008 >Basically conventional mortgage loans is free income for the bank, as > the loan amount is guaranteed by government (Fannie/Freddy). And the desirability of that loan is directly dependent on people who are willing to "purchase" it as a source of income. If the risks involved get so bad that no one is willing to do that, then you are back to finding banks who have enough capital on hand to give you a loan. And with banks in bad shape, that will be harder and harder for them to do. Banks don't really have huge vaults full of money. In general they have enough to cover contingencies and that's it. Which means if a few hundred people want to get half a million dollars a piece, they're not going to be easily able to get that money without the sort of debt instrument market we have now. Quote Share this post Link to post Share on other sites
krabberkris 1 #62 September 29, 2008 "Banks don't really have huge vaults full of money. In general they have enough to cover contingencies and that's it." Yep. Want to watch a great video? "GOOGLE" Money as Debt. It's very good....funny , too.The man who smiles when things go wrong has thought of someone to blame it on. Quote Share this post Link to post Share on other sites
georgerussia 0 #63 September 29, 2008 Quote And the desirability of that loan is directly dependent on people who are willing to "purchase" it as a source of income. If the risks involved get so bad that no one is willing to do that, then you are back to finding banks who have enough capital on hand to give you a loan. That's why I'm saying that conventional mortgage, student and some other loans probably would not be affected at all, because the government is basically guarantees the risk. This of course will mean that the bank margin on those loans most likely will be very low. On other side the margin is much bigger on consumer loans, CC loans and small business loans, but the risk of default for those loans is much greater as well. Which means the banks will be much more selective to those who they give those loans - for example, require actual income or employment verification for credit card applicants. Sure, for some people it will be a crisis - but for the general economy it would be a good thing.* Don't pray for me if you wanna help - just send me a check. * Quote Share this post Link to post Share on other sites
billvon 2,991 #64 September 29, 2008 >Which means the banks will be much more selective to those who they give those >loans - for example, require actual income or employment verification for credit >card applicants. OK, I see what you're saying; in that case I agree. Credit will be much harder to come by, and a great many people will not be able to afford homes they once could. Quote Share this post Link to post Share on other sites
georgerussia 0 #65 September 29, 2008 Quote OK, I see what you're saying; in that case I agree. Credit will be much harder to come by, and a great many people will not be able to afford homes they once could. It depends on criteria "could afford the home". If someone needs credit card debt, or a neg ARM loan to afford a home - technically one could say they were able to afford this home. But practically they were not. The debt cannot grow up indefinitely, and if one cannot afford the home by actually paying back the debt plus interest, I wouldn't say they were ever able to afford it.* Don't pray for me if you wanna help - just send me a check. * Quote Share this post Link to post Share on other sites
