Economic collapse of 2008 Democrat's fault, not Bush's

True, so if the costs of issuing a few risky loans is substantially outweighed by the revenue created by a new branch or merger and that this merger/branch was only possible if you were compliant with CRA, then yes, making a bad loan in this case is in the banks interests and that interest wouldn't exist if not for the CRA.

Looks like someone else in this thread has their partisan blinders on, Clinton signed Gramm-Leach-Bliley.

Nah, they needed more to bundle into securities, these securities got bogus ratings and as a result were treated as triple-A when they knew otherwise and then as a result of that were gobbled up by F&F. They just didn't care because there new there was no risk, that a bailout was going to be there to save them.

No, they were contributing factors that the left wants to ignore, just like the right wants to ignore the precedence set by the S&L crisis. Both sides would do well to take off the blinders and realize their "team" was also part of the problem.

 

Come on man, you are really reaching here, banks wanted the money, their risk was eliminated by wall street, the CRA had nothing to do with. If a bank could use the loans they wrote yesterday and sold this morning to comply with the few CRA regs, then so be it but the didn't two hoots about it, they saw the huge profits with no risk.

You're not stupid enough to try and claim that makes it a Democrat bill are you?
You do know WHY he signed don't you?
Nice try though.

They really didn't think of a bail out either, remember they were all making money and it was never going to end. but you are repeating what I said, wall street need more and more loans to make more and more money.

They were factors just like BOA, Countrywide, Goldmans, AIG and the rest were, no more and no less, which the evil 'left' has never denied.
The idiot right has tried and tried and tried to make them the cause, which you fell for, and it's simply not the case.

 

How can WS impact the riskiness of a loan? Simple, they can't, a loan is what it is, the only way to reduce that risk was to package them with other, more sound loans which had no thing to do with banks but rather the creditors and F&F who would ultimately buy the loans on the promise they were highly rated.

The banks did want money, that's fine, that's what their supposed to do, but in order to expand operations they had to be CRA compliant, it's a no brainer to get in line with regulation to get the go ahead on an expansion or merger. It created a bad set of incentives and there's really no wriggling away from that.

I don't do partisan BS. He signed it and there was a republican controlled house and senate, in my eyes both parties are to blame. He had the power to veto it and didn't and we all suffered as a result.

Completely disagree, S&L set the precedence, the creditors were all saved then and they were all saved again this time. They're supposed to be the watch dogs, but their incentives to be prudent were completely corrupted.

Ok, great, that's all I've said from get start was the CRA, F&F, S&L and artificially low interest rates were all part of a very big puzzle. To ignore any contributing factor would be as you put it, idiotic.

 

I can tell you that "the intentional loosening of underwriting standards" (I call it 'de-regulation') happened way before the subprime mortgages. In fact, I think the subprime mortgages were CAUSED by developers and lenders who looked up and saw they had built waaaay to many houses and needed buyers in a hurry. A trip through Phoenix or Las Vegas in the early 2000s would have told you that. Nothing but empty $250,000 tract homes and unfinished lots as far as the eye could see.

 

let try and explain this so even a conservative can understand it.
If I loan you $100 with the promise that you will pay me back next Tuesday $125, I have assumed the risk of losing my $100. But I can lessen my risk by making sure I'm with you when you cash your pay check next Tuesday, or other things like that. Follow me so far? I know it's tough but hang in there, now on Friday I'm at a dinner party and I tell Mike that I loaned you some money and Mike makes me an offer, he pays me $115, right then and there, and HE gets the $125 on Tuesday.
Well guess what, I have just eliminated my risk. Just like the banks did with wall street. They wrote what they knew to be bad loans and they didn't care because 'Mike' was buying up every loan he could get his hands on. But here is where it gets tricky, Mike bundles up a bunch of loans, good and bad, he doesn't know nor care and he sells them to someone else, who then sells them another who happens to wok in my office and he sells them to me.
I got rid of my risk with you, but I picked up a bunch more risk later, thinking that I would sell it to Mike again, which...I do!
That is how bubbles are formed and that is how wall street impacted the risk of loans.
The CRA had nothing to do with.
I know how much you desperately want it to, but it doesn't.

How many more times and how many more does it need to be explained to you that the CRA was small potatoes, the banks didn't give two (*)(*)(*)(*)s about it! It didn't stop a single bank for expanding, ever!

And yet you brought it up, why?

Perhaps they did think if it went bad they would bailed out but I doubt they even thought it WOULD go bad.
You do now that the S&L was caused by the same thing right? Deregulation.

Whats idiotic is to think it was a 'contributing' factor when it was simply one more thing on the table and very very very small thing at that.

 

I'm not and napkin math is of little interest to me. I understand incentives, if you want to ignore them then that's your deal.

Even if it didn't, it didn't need to, all it needed to do was require CRA compliance for merger, expansions and acquisitions to occur.

Oh yea? Take a look back through the thread. I've been decidedly non-partisan and willing to point the blame at any and everyone involved. I think you're looking through your blue colored lenses again.

Makes no difference, it's the epitome of moral hazard, which has been my contention since get start, maybe as your re-reading my posts you can take that into account.

Amongst other things, absolutely. That's what lead to the S&L crisis, but it was the bailing them out that perverted long run incentives.

If it's on the table, it contributed, simple as that. I've said from the beginning it was small potatoes, just not non-existent ones.

 

And what you insist on not seeing is why they had that devil may care attitude. You seem to think they maybe caught the greed bug or something.

What actually happened is the government said "Don't worry. If you make a mistake and accidentally the whole economy, we'll bail you out."

The concept is moral hazard, and if you don't take that into account, then you are not thinking about it from science, but emotion.