So... Just Where did It All REALLY Start?

[Pidgey]

As we all know, only the U.S. is to blame for All The World's Ills, including our current global economic crisis. As such, you'd expect our economic numbers to turn sour first and then other countries to follow.

Right?

http://www.theglobeandmail.com/servlet/story/RTGAM.20090421.wreynolds0422/BNStory/energy/home

 

[PLC1]

Right.

From your article:

Mr. Reynolds does not deny the U.S. housing boom, and eventual bust, of 2002 to 2008. He simply argues that it wasn't the housing boom that set off the global meltdown. “What really triggered this recession should be obvious,” he says, “since the same thing happened before every postwar U.S. recession save one (1960).” The real cause, he says, was the spike in the price of crude oil.

You would also expect the global financial crisis to have ended soon after the price of oil went back down, wouldn't you?

Is it possible that there could be more than one cause for the current depression?

What Obama said, verbatim:

NOW, TO UNDERSTAND HOW WE GET THERE, WE FIRST NEED TO UNDERSTAND HOW WE GOT HERE. RECESSIONS ARE NOT UNCOMMON. MARKETS AND ECONOMIES NATURALLY EBB AND FLOW, AS WE'VE SEEN IN OUR HISTORY. BUT THIS RECESSION IS DIFFERENT. THIS RECESSION WAS NOT CAUSED BY A NORMAL DOWNTURN IN THE BUSINESS CYCLE. IT WAS CAUSED BY A PERFECT STORMOF IRRESPONSIBILITY AND POOR DECISION-MAKING THAT STRETCHED FROM WALL STREET TO WASHINGTON TO MAIN STREET.AS HAS BEEN WIDELY REPORTED, IT STARTED IN THE HOUSING MARKET. DURING THE COURSE OF THE DECADE, THE FORMULA FOR BUYING A HOUSE CHANGED. INSTEAD OF SAVING THEIR PENNIES TO BUY THEIR DREAM HOUSE, MANY AMERICANS FOUND THAT SUDDENLY THEY COULD TAKE OUT LOANS THAT BY TRADITIONAL STANDARDS, THEIR INCOMES JUST COULD NOT SUPPORT. OTHERS WERE TRICKED INTO SIGNING THESE SUBPRIME LOANS BY LENDERS WHO WERE TRYING TO MAKE A QUICK PROFIT. THE REASON THESE LOANS WERE SO READILY AVAILABLE WAS THAT WALL STREET SAW BIG PROFITS TO BE MADE.

Here's the part where he is "blaming the US for all of the world's ills":

WHEN PEOPLE COULDN'T GET HOME LOANS, THE CRISIS IN THE HOUSING MARKET ONLY DEEPENED. BECAUSE THE INFECTED SECURITIES WERE BEING TRADED WORLDWIDE AND OTHER NATIONS ALSO HAD WEAK REGULATIONS, THIS RECESSION SOON BECAME GLOBAL. WHEN OTHER NATIONS CAN'T AFFORD TO BUY OUR GOODS, IT SLOWS OUR ECONOMY EVEN FURTHER.

All caps are from the source.

Is he right about the major cause of the recession?

Is he right that speculation on Wall Street helped bring about a worldwide recession?

Or is he just blaming America for all of the world's ills, just as all liberals have always done (or words to that effect)?

Read what he actually said, think about it, then decide for yourself.

 

[Cruella]

Barack Obama; "MANY AMERICANS FOUND THAT SUDDENLY THEY COULD TAKE OUT LOANS THAT BY TRADITIONAL STANDARDS, THEIR INCOMES JUST COULD NOT SUPPORT. OTHERS WERE TRICKED INTO SIGNING THESE SUBPRIME LOANS BY LENDERS WHO WERE TRYING TO MAKE A QUICK PROFIT. THE REASON THESE LOANS WERE SO READILY AVAILABLE WAS THAT WALL STREET SAW BIG PROFITS TO BE MADE".

With landmark lawsuit, Barack Obama pushed banks to give subprime loans to Chicago’s African-Americans

President Barack Obama was a pioneering contributor to the national subprime real estate bubble, and roughly half of the 186 African-American clients in his landmark 1995 mortgage discrimination lawsuit against Citibank have since gone bankrupt or received foreclosure notices.

As few as 19 of those 186 clients still own homes with clean credit ratings, following a decade in which Obama and other progressives pushed banks to provide mortgages to poor African Americans.

 

[PLC1]

Barack Obama; "MANY AMERICANS FOUND THAT SUDDENLY THEY COULD TAKE OUT LOANS THAT BY TRADITIONAL STANDARDS, THEIR INCOMES JUST COULD NOT SUPPORT. OTHERS WERE TRICKED INTO SIGNING THESE SUBPRIME LOANS BY LENDERS WHO WERE TRYING TO MAKE A QUICK PROFIT. THE REASON THESE LOANS WERE SO READILY AVAILABLE WAS THAT WALL STREET SAW BIG PROFITS TO BE MADE".

With landmark lawsuit, Barack Obama pushed banks to give subprime loans to Chicago’s African-Americans

President Barack Obama was a pioneering contributor to the national subprime real estate bubble, and roughly half of the 186 African-American clients in his landmark 1995 mortgage discrimination lawsuit against Citibank have since gone bankrupt or received foreclosure notices.

As few as 19 of those 186 clients still own homes with clean credit ratings, following a decade in which Obama and other progressives pushed banks to provide mortgages to poor African Americans.

So, the problem was making loans to blacks?

I thought it was giving loans to all races of people who couldn't afford them, then selling those loans as good debt?

 

[Cruella]

So, the problem was making loans to blacks?

That's not what I got out of the article.

Government in a sense blackmailed banks into making a certain percentage of their mortgage loans through the "Community Reinvestment Act" (which was targeted towards minorities) under threat of discrimination lawsuits.

If race was an issue in this article, it's because the discrimination lawsuit that Obama brought was for 189 African Americans. So it's like a double wammy. The banks were under threat by the government to make the loans, and then when they did, they were sued because the borrowers were now considered victims of the banks.

Nice gig to get in on, if your a lawyer. They play both sides of the issue and who gets stuck in the middle? Unless that was the goal, to put the banks out of business to begin with.

 

[PLC1]

That's not what I got out of the article.

Government in a sense blackmailed banks into making a certain percentage of their mortgage loans through the "Community Reinvestment Act" (which was targeted towards minorities) under threat of discrimination lawsuits.

If race was an issue in this article, it's because the discrimination lawsuit that Obama brought was for 189 African Americans. So it's like a double wammy. The banks were under threat by the government to make the loans, and then when they did, they were sued because the borrowers were now considered victims of the banks.

Nice gig to get in on, if your a lawyer. They play both sides of the issue and who gets stuck in the middle? Unless that was the goal, to put the banks out of business to begin with.

These loans should never have been allowed to happen whether they were made to blacks or not. The government simply didn't do its job.

No one had to encourage or require that sub prime mortgages be made to anyone. The fact that money could be made basically by gambling with other people's money was plenty of motivation.

 

[Cruella]

No one had to encourage or require that sub prime mortgages be made to anyone. The fact that money could be made basically by gambling with other people's money was plenty of motivation.

The Government-Created Subprime Mortgage Meltdown

 

[Cruella]

This explains it even more.

How Obama Bankrupted Black Homeowners

 

[PLC1]

This explains it even more.

How Obama Bankrupted Black Homeowners

Redlining was the practice of denying loans for property in specific (mostly black) sections of cities. I'm not sure just how redlining forced banks to make loans to people who couldn't afford them, but maybe. The fact of the matter is that such loans should have been outlawed, and not encouraged.

 

[Cruella]

I'm not sure just how redlining forced banks to make loans to people who couldn't afford them, but maybe. The fact of the matter is that such loans should have been outlawed, and not encouraged.

I don't know if you read the articles or not, but it looks to me like blackmail. I also remember a BofA spokes person during the TARP mess, say that they were "forced" by the government to make the risky loans. It seems the Democrats want this both ways. They actively push people into these loans, they force the banks to give the loans and then they sue them when the don't. Catch 22.

Before the crisis, Obama pushed thousands of credit-poor blacks into homes they couldn't afford. As a civil-rights attorney, he sued banks to rubberstamp mortgages for urban residents.

.....Attorney General Janet Reno and her aide Eric Holder filed a mortgage discrimination case against a Washington-area bank that forced it to target minority neighborhoods for subprime loans.
Reno and Holder also encouraged civil-rights lawyers like Obama to file local lending-bias cases against banks.

 

[dogtowner]

Redlining was the practice of denying loans for property in specific (mostly black) sections of cities. I'm not sure just how redlining forced banks to make loans to people who couldn't afford them, but maybe. The fact of the matter is that such loans should have been outlawed, and not encouraged.

redlining evolved into just issuing them worse interest rates (much ss lenders always did for subprimers).

 

[PLC1]

redlining evolved into just issuing them worse interest rates (much ss lenders always did for subprimers).

Indeed, they did pay more:

Systematic redlining

The invention of redlining is often credited to the Home Owners Loan Corporation (HOLC), which designed a rating system for neighborhoods. There were four ratings, green, blue, yellow, or red. The neighborhood that received the highest rating, green, were white and middle class, while the lowest rating, red, was used for neighborhoods that were nonwhite or mixed and working-class. The higher the rating equaled higher property values and were seen as good investments, whereas the area that were red, or redlined, were considered to be poor investments. Banks viewed the redlined areas as high risk and would not give loans for the properties in these neighborhoods. This program made it nearly impossible for African Americans to borrow money in order to purchase a home or improve theirs.[5] Due to redlining, minority and black neighborhoods receive less economic assistance than other neighborhoods in terms of loans and mortgage money as economically equal white communities.[1]

Effects on African Americans

It has been estimated that discrimination has caused black homeowners to pay more than $10.5 billion in extra home payments, and that black American homeowners lost $4,000 due to their home mortgages being 54 percent higher than whites'[6]. This has also caused a disparity in the education that their children are able to receive, since education opportunities vary throughout communities, based on taxes.[6] Schools in more impoverished areas are unable to provide the same type of educational opportunities as other communities. School building tend to be more rundown and the technology is typically older.

 

[Cruella]

You can look at insurance rates and even school success. It depends on your zip code. Businesses can't avoid facts on the ground. Even a pizza delivery guy redlines.