On Oct 2, 2008, at 1:25 AM, Stefano Mori wrote: > > On 2008-Oct-01, at 23:49, Chris Gehlker wrote: > >> The US Federal government not only repealed it >> own rules against predatory lending, through various machinations it >> forced the states to repeal or gut their laws. The result was a >> bubble >> in mortgage backed securities and financial derivatives of mortgage >> backed securities. > > > Does that have anything to do with this: > > http://www.ffiec.gov/cra/history.htm > > ?? > > I ask because so far, right-wing views seem to think it set in > motion this crisis. > > And because I don't particularly care who says what, I'm curious > about whether there is anything to it.
We hear that a lot. I doubt that it is true in the sense that the government *forced* financial institutions to make predatory loans. It certainly is true in the sense that a lot of liberals bought into the whole 'access to credit' rationale for loosening regulations. It's pretty well established that initially the subprime lenders concentrated on older people on fixed incomes for home repair and improvement purposes. This somewhat belies the right-wing story. You also hear a lot of the 'you have to play the game the way the refs are calling it' excuse form former bank CEOs. This is also know as the 'bad financial practices drive out the good' excuse. They basically argue that they knew subprime lending was risky and might ultimately bankrupt their companies but once some institutions started doing it they all had to do it or all the capital would have flowed away from their bank. There is probably some truth to this explanation. -- Egotism is the anesthetic that dulls the pain of stupidity. -Frank William Leahy, football coach (1908-1973) _______________________________________________ OSX-Nutters mailing list | [email protected] http://lists.tit-wank.com/mailman/listinfo/osx-nutters List hosted at http://cat5.org/
