The difference between socialism and capitalism in one photo

[Rick]

The Community Reinvestment Act simply put an end to "redlining."

False - that was merely the original 1977 act, which was modified a number of times, notably in 1992 mandating subprime loans to minorities. Nothing much happened with that till the late 1990s, when bill clinton appointed franklin raines head of fanny mae, with orders to let primary lenders know that fanny mae would buy hundreds of millions of dollars of such loans and securitize them for investors. That was the origin of the collapse along with the low interst rates.

"Harmfully low interest rates?" I think you'd be hard put to show that low interest rates are a problem.

Read up - this is now recognized by most serious writers on the issue and economists. The fanny mae subprime mortgages and low interest rates worked hand in hand to fuel the housing bubble.

Now, being able to buy a house that you can't really afford via "creative" financing, and the bank being able to sell said loan as a secure mortgage may have had a little bit to do with the soaring cost of real estate and subsequent crash.

A "little bit"?

So, whose fault was it that loans that were not ever going to be paid were sold as secure paper?

Mortgages are almost always noin-recourse loans - anyone who sold them as secure was lying, anyone who believed it was a fool.

 

[PLC1]

False - that was merely the original 1977 act, which was modified a number of times, notably in 1992 mandating subprime loans to minorities.

Can you actually show a link (credible, not just some blogger) that shows that the government mandated subprime loans to minorities? That would be even worse than the government allowing subprime mortgages through inaction, wouldn't it?

Nothing much happened with that till the late 1990s, when bill clinton appointed franklin raines head of fanny mae, with orders to let primary lenders know that fanny mae would buy hundreds of millions of dollars of such loans and securitize them for investors. That was the origin of the collapse along with the low interst rates.

So, according to your final statement, Fanny Mae was a fool, and the primary lenders were liars. So, how did the federal government allow liars and fools to control so much of the nation's wealth? That sounds like a failure to effectively regulate the market to me.

Read up - this is now recognized by most serious writers on the issue and economists. The fanny mae subprime mortgages and low interest rates worked hand in hand to fuel the housing bubble.

So, is that why the economy was so great back in the late '70s, when the prime rate topped 20% and home mortgages of less than 10% were considered a bargain?

A "little bit"?

Well, perhaps more than just a little bit.

Mortgages are almost always noin-recourse loans - anyone who sold them as secure was lying, anyone who believed it was a fool.

See above.

 

[Rick]

Can you actually show a link (credible, not just some blogger) that shows that the government mandated subprime loans to minorities? That would be even worse than the government allowing subprime mortgages through inaction, wouldn't it?

Oh, someone who works for obozo would be more credible than "some blogger"?
This account from American Spectator is as good as any, and excellent for anyone who still believes the "deregulation" myth. Although I don't agree with every detail, it's a good general account:

http://spectator.org/archives/2009/02/06/the-true-origins-of-this-finan#

So, according to your final statement, Fanny Mae was a fool, and the primary lenders were liars.

Uh nooooo...... if fanny mae had sold it's bundled securitized mortgage investments to investors as "secure" (I don't know if they did that) they were liars, and the investors were fools.

So, how did the federal government allow liars and fools to control so much of the nation's wealth? That sounds like a failure to effectively regulate the market to me.

Noooooooo....... read the article.

So, is that why the economy was so great back in the late '70s, when the prime rate topped 20% and home mortgages of less than 10% were considered a bargain?

Noooooo........ the economy wasn't "great" back then - Jimmy Carter's staflation by no reasonable reckoning could be called "great".

 

[PLC1]

Oh, someone who works for obozo would be more credible than "some blogger"?

Not necessarily. Try fact, rather than opinion or unsupported statements.

This account from American Spectator is as good as any, and excellent for anyone who still believes the "deregulation" myth. Although I don't agree with every detail, it's a good general account:

http://spectator.org/archives/2009/02/06/the-true-origins-of-this-finan#

That "account" said the same thing you did, and with no more support. Someone else saying that the government pressured banks to make subprime loans to minorities is no more credible than you saying it yourself. How did they do this? What laws were passed?

Uh nooooo...... if fanny mae had sold it's bundled securitized mortgage investments to investors as "secure" (I don't know if they did that) they were liars, and the investors were fools.

I do, and they did. This is a description from Wikipedia that explains what happened pretty clearly:

The subprime mortgage crisis arose from 'bundling' American subprime and American regular mortgages which were traditionally isolated from, and sold in a separate market from prime loans. These 'bundles' of mixed (prime and subprime) mortgages were the basis Asset-backed securities so the 'probable' rate of return looked superb (since subprime lenders pay higher premiums, and the loans were anyway secured against saleable real-estate, and so, theoretically 'could not fail'). Many mortgages had a low interest for the first year, and poorer buyers 'swapped' regularly at first, but finally such borrowers began to default in large numbers. the inflated house-price bubble burst, property valuations plummeted and the real rate of return on investment could not be estimated, and so confidence in these instruments collapsed, and all were considered to be almost worthless Toxic assets, regardless of their actual composition or performance.

And here is more, with facts and further details, not just someone making a statement.

Noooooo........ the economy wasn't "great" back then - Jimmy Carter's staflation by no reasonable reckoning could be called "great".

Um... irony? Of course, the economy wasn't great back then.

If low interest is the problem, then it should have really been booming, don't you think? In other words, the economy was in the toilet and it was due to high interest rates.

 

[Rick]

Not necessarily. Try fact, rather than opinion or unsupported statements.

You've been given the facts - the only thing more that can be done is roll them up and whack you on the head with them.

That "account" said the same thing you did, and with no more support.

Baloney - it's a detailed account with names, chronology, events, legislation - you're just doing a "Pepper": (Duh, it's not true! )

Someone else saying that the government pressured banks to make subprime loans to minorities is no more credible than you saying it yourself. How did they do this? What laws were passed?

I TOLD YOU! Do you have ultra short-term memory problems??

I do, and they did. This is a description from Wikipedia that explains what happened pretty clearly:

Mr. I-Demand-Proof suddenly elevates wikipedia to The Fountain of Absolute Truth. You give a linkless quote from who knows whom. The paragraph is OBVIOUSLY absurd - it asserts that that some of the last acts in the chain of events were the "cause". Then you cite someone's blog, after denigrating blogs.

What you left out from wikipedia:

Legislative changes 1992Although minor amendments were made directly to the Community Reinvestment Act concerning the consideration of minority and female owned institutions & partnerships during evaluations first established in 1991, other portions of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 indirectly affected the CRA practices at the time in requiring Fannie Mae and Freddie Mac, the two government sponsored enterprises that purchase and securitize mortgages, to devote a percentage of their lending to support affordable housing.[4]

The footnote is from a speech by Bernanke - you can follow the link to the original speech. He's stating it in the most soft-peddled way possible, but he said it.

 

[PLC1]

You've been given the facts - the only thing more that can be done is roll them up and whack you on the head with them.

Actually, I've been given the opinions. Any facts, Ive dug up on my own.

Baloney - it's a detailed account with names, chronology, events, legislation - you're just doing a "Pepper": (Duh, it's not true! )

I didn't see any reference to any specific legislation in the link you gave. perhaps I missed it.

I TOLD YOU! Do you have ultra short-term memory problems??

You've told me a lot of things on this forum, much of it nonsense. No, my short term memory is quite good, which is why I don't always take what you've said at face value.

Mr. I-Demand-Proof suddenly elevates wikipedia to The Fountain of Absolute Truth. You give a linkless quote from who knows whom. The paragraph is OBVIOUSLY absurd - it asserts that that some of the last acts in the chain of events were the "cause". Then you cite someone's blog, after denigrating blogs.

Oh, I was quite sure you wouldn't accept Wikipedia, which is why I posted another back up link, only to have it described as "someone's blog."

What you left out from wikipedia:



The footnote is from a speech by Bernanke - you can follow the link to the original speech. He's stating it in the most soft-peddled way possible, but he said it.

Aha. So, you're talking about the Community Reinvestment Act of 1992! Well, why didn't you say so in the beginning?

Here is what GHWB had to say about it when he signed it into law:

Today I am signing into law H.R. 5334, the "Housing and Community Development Act of 1992." This bill establishes a sound regulatory structure for Government-sponsored enterprises (GSEs), combats money laundering, provides essential regulatory relief to financial institutions, authorizes several key Administration housing initiatives, and reduces the risk of lead-based paint poisoning.

Now, that sounds pretty good. Just what was this law that, according to your source, forced the mortgage industry to make subprime loans to minorities?


Housing and Community Development Act of 1992

I've looked through it. Just where does it say that banks must make subprime loans to minorities, or to anyone else?

 

[Rick]

I've looked through it. Just where does it say that banks must make subprime loans to minorities, or to anyone else?

What you linked was a tiny fragment of the bill.

 

[Openmind]

First, South Korea isn't using a Capitalist system...

And second, North Korea isn't using a Socialist regime, but a Communist regime. . .a huge difference!

Are you in favor of social democracy?

Social democracy is a political ideology of the center-left on the political spectrum. The contemporary social democratic movement seeks to reform capitalism to align it with the ethical ideals of social justice while maintaining the capitalist mode of production, as opposed to creating an alternative socialist economic system. Practical modern social democratic policies include the promotion of a welfare state, and the creation of economic democracy as a means to secure workers' rights.​

The only "difference" between social democracy and socialism is that the means of production and distribution aren't solely owned by the state, it allows some private ownership.

And just to correct the false claim that a Social Democracy maintains "the capitalist mode of production", Capitalism requires that all property be privately owned. So any system that allows state ownership to any degree, and on any level, cannot be considered a Capitalist system.

You are correct on all points. Thank you for pointing out the obvious.

 

[PLC1]

What you linked was a tiny fragment of the bill.

OK, then, just where in the entire bill does it say that the banks have to issue subprime mortgages to minorities?

 

[Rick]

OK, then, just where in the entire bill does it say that the banks have to issue subprime mortgages to minorities?

I ALREADY gave you a quote from the wiki article.

 

[PLC1]

I ALREADY gave you a quote from the wiki article.

Not one that backs up your assertion.

 

[Rick]

Not one that backs up your assertion.

Uh, yessssssss, it did.

 

[pocketfullofshells]

Uh, yessssssss, it did.

sounds like you can't actually post it, so you keep pretending like you did. run duck hide!

 

[Rick]

sounds like you can't actually post it, so you keep pretending like you did. run duck hide!

Why don't you butt out? Maybe do some circle jerks (metaphorically speaking of course) with Pepper Spray?