Where is the US economy headed?

Where did I make any statement about giving banks money and expecting them to immediately dole it out in loans to every applicant? You're daft.

Has nothing to do with the notion that ACORN or any organization can "embarrass" banks to make shaky loans, that banks and loan officers are afraid of being marked by activist organizations. It's still a big joke -- another conspiracy theory that will unlikely ever be investigated and found to be illegal.

I explained what the problem was in aggressive, greedy and unethical real estate salespeople doctoring up loan applications to make a sale. This was already rampant in Orange County in the 80's during Reagan and Bush I -- it was no conspiracy theory but it was well hidden from the public because they didn't care. It was instrumental in the financial recession of the late 80's and early 90's, or perhaps you were too young to remember that? It boils down to all the financial organizations having poor business plans, policies, and sometimes ethics. It doesn't help when people are not depositing money in bank savings account, which was not in my investment plan as the yield was laughable, even on Money Market and CD's. They're looking much better right now but what bank do you want to deposit savings into? Some banks are offering as high as 5% on savings to get cash back in the vault -- but, unfortunately, they are the shakiest banks.

I've been a controller for a medium size manufacturing company at one time -- the credit deparment is in support of the sales department -- depending on who the controller is, it can work well with normal losses or it can get out of control.

I am sorry but it is you, sir, who is misinformed. I must give more credence to someone who has done the research. All you say,sire,is that your experience as a controller(good for you) gives you insight into the sub prime problem. That is like saying that my experience as an adjunct professor gives me an insight into how a University is run.

If you have an open mind, read the following. If you do not, then others will review it and make up their own minds.


FROM NATIONAL REVIEW OCTOBER 7TH 2008
"At this point, both ACORN and the Clinton administration were working together to impose large numerical targets or “set asides” (really a sort of poor and minority loan quota system) on Fannie and Freddie. ACORN called for at least half of Fannie and Freddie loans to go to low-income customers. At first the Clinton administration offered a set-aside of 30 percent. But eventually ACORN got what it wanted. In early 1994, the Clinton administration floated plans for committing $1 trillion in loans to low- and moderate-income home-buyers, which would amount to about half of Fannie Mae’s business by the end of the decade. Wall Street Analysts attributed Fannie Mae’s willingness to go along with the change to the need to protect itself against still more severe “congressional attack.” News reports also highlighted praise for the change from ACORN’s head lobbyist, Deepak Bhargava.

This sweeping debasement of credit standards was touted by Fannie Mae’s chairman, chief executive officer, and now prominent Obama adviser James A. Johnson. This is also the period when Fannie Mae ramped up its pilot programs and local partnerships with ACORN, all of which became precedents and models for the pattern of risky subprime mortgages at the root of today’s crisis. During these years, Obama’s Chicago ACORN ally, Madeline Talbott, was at the forefront of participation in those pilot programs, and her activities were consistently supported by Obama through both foundation funding and personal leadership training for her top organizers.

Finally, in June of 1995, President Clinton, Vice President Gore, and Secretary Cisneros announced the administration’s comprehensive new strategy for raising home-ownership in America to an all-time high. Representatives from ACORN were guests of honor at the ceremony. In his remarks, Clinton emphasized that: “Out homeownership strategy will not cost the taxpayers one extra cent. It will not require legislation.” Clinton meant that informal partnerships between Fannie and Freddie and groups like ACORN would make mortgages available to customers “who have historically been excluded from homeownership.”

Disaster
In the end of course, Clinton’s plan cost taxpayers an almost unimaginable amount of money. And it was just around the time of his 1995 announcement that the Chicago papers started encouraging bad-credit customers with “dog-food” wages, little money in the bank, and even histories of bankruptcy to apply for home loans with the help of ACORN. At both the local and national levels, then, ACORN served as the critical catalyst, levering pressure created by the Community Reinvestment Act and pull with Democratic politicians to force Fannie Mae and Freddie Mac into a pattern of high-risk loans.

Up to now, conventional wisdom on the financial meltdown has relegated ACORN and the CRA to bit parts. The real problem, we’ve been told, lay with Fannie Mae and Freddie Mac. In fact, however, ACORN is at the base of the whole mess. ACORN used CRA and Democratic sympathizers to entangle Fannie and Freddie and the entire financial system in a disastrous disregard of the most basic financial standards. And Barack Obama cut his teeth as an organizer and politician backing up ACORN’s economic madness every step of the way."

You might be interested in this. Go to Google- search "BBC i-player"

Then search " The City Uncovered Evan Davis.

A good article, spendius--Thank You. It reveals the greed of bankers. It shows what they did when they received the billions in mortgages from the little guys in finance. All true but it DOES NOT tell us why the debacle began. It began because the leftwingers in the Democratic Party pressed to get minorities more access to loans--EASIER access to loans--NO DOWN PAYMENT access to loans. No credit check access to loans. ARM funding access to loans.

There's always two sides to every story -- there's more on the Web in retort to those who want to zero in on ACORN as the convenient scapegoat, when, in fact, it's a very small portion of our population that worked with Acorn and it wasn't to convince banks to give out bogus loans. McCain tried to use this in his campaign and it flew away like a deflated balloon.

ACORN's Response to McCain's Lies

by David Swanson

www.opednews.com

ACORN President Maude Hurd released the following statement today in response to the McCain campaign's new ad claiming that, among other things, ACORN is responsible for the mortgage crisis:

”For almost a decade, ACORN, a community organization of 400,000 families in neighborhoods across the country, has been fighting against the predatory lending practices that have robbed our members of their homes, destabilized neighborhoods, and roiled the global economy.”

“In his newest ad, John McCain’s campaign bizarrely claims, “ACORN forced banks to issue risky home loans, the same types of loans that caused the financial crisis we're in today.” Nothing could be further from the truth. In fact, ACORN has worked successfully to help working class families get good home loans on fair terms from legitimate banks and has fought vigorously against predatory lenders who have ripped off families in our communities. These predatory loans caused the crisis.”

“For more than a decade, ACORN members have held protests, released reports, and advocated for regulations to protect homeowners from predatory lenders. ACORN organizers and volunteers have been working day and night to help victims of the GOP economic meltdown to save their homes from foreclosure. In fact, ACORN has brought class action lawsuits against several predatory lenders, and has lobbied the Federal Reserve and Congress in support of regulations against predatory lending. ACORN has even been successful in convincing many lenders to treat homeowners more fairly and help families be able to make their mortgage payments and save their homes.”

“Unfortunately, the Bush administration and Congressional Republicans like John McCain have blocked the sensible regulations that ACORN and others proposed that would have averted the mortgage meltdown. If John McCain thinks that community organizers caused the foreclosure crisis, he knows even less about the economy than previously thought.”

”John McCain and the Republicans are desperately trying to shift the blame for the economic crisis they caused with a philosophy of deregulation and indifference to homeowners. All the grainy footage and creepy music in the world can't cancel out some simple, basic facts, and the facts about the economy are not on John McCain's side"

It's not that much different with the predadory usury tactics of credit card companies arbitrarily doubling and tripling interest on one late payment, or a one point loss on a credit score, switching around the due dates on their statements to catch a credit card user into being late on a payment, luring people into low interest transfers with fine print that allows them to raise the rate up to ten times after six months to a year, then charging a "points" fee of $ $ 100.00 to $ 200.00 for the transfer (I defy anyone to try and find in the microscopic print what the banks is doing).

"Article" throws me a bit. It was an hour long film. And quite well made.

Did you see it all?

Extra! January 2009

Scapegoating Minorities for Failures of Banking
Blaming CRA makes little sense, but gets finance industry off the hook

By Mary Kane

It seems, on the face of it, a theory too absurd to even be taken seriously: A ragtag band of anti-poverty activists pushes the White House into forcing lenders to make bad loans to poor and minority borrowers, setting off a subprime loan crisis that puts the entire global economy at risk.

Yet in the frenzy of coverage as a financial markets collapse loomed in mid-September, the idea that the Community Reinvestment Act (CRA) was somehow responsible took off in the media"in the mainstream press as well as on the conservative fringe.

One of the most prominent proponents of the blame-the-CRA-movement was Washington Post columnist Charles Krauthammer (9/26/08), who described the CRA as the source of the subprime mortgage meltdown:

For decades, starting with Jimmy Carter’s Community Reinvestment Act of 1977, there has been bipartisan agreement to use government power to expand homeownership to people who had been shut out for economic reasons or, sometimes, because of racial and ethnic discrimination. What could be a more worthy cause? But it led to tremendous pressure on Fannie Mae and Freddie Mac"which in turn pressured banks and other lenders"to extend mortgages to people who were borrowing over their heads. That’s called subprime lending. It lies at the root of our current calamity.


Krauthammer’s comments weren’t the only catalyst. In a widely cited reference, Fox News business reporter Neil Cavuto (9/18/08), commented: “I’m just saying, I don’t remember a clarion call that said, ‘Fannie and Freddie are a disaster. Loaning to minorities and risky folks is a disaster.’”

At National Review’s Corner blog (9/19/08), Lisa Schiffren contended that poor people traditionally rent because they are bad loan risks, and “the day that reasoning by banks was junked as ‘racist’ was the day this crisis became a possibility.”

Conservative talk show host Rush Limbaugh, in explaining the country’s financial mess, charged (9/29/08) that the community group ACORN used the CRA to force banks to make bad loans. ACORN, Limbaugh charged, employed “political correctness pressure” to spread misery “far and wide under the terms and definitions of things like affordable housing.” Others in the pundit class quickly spread the idea on cable shows, with Republican strategist Alex Castellanos describing his version of the roots of the financial crisis on CNN (Late Edition, 9/21/08):

This started in the Carter and Clinton administrations when people decided, hey, you know what, we’re going to have affordable housing even for people who can’t afford it. And so they loosened the rules and created candy, home loans, dangling in front of people who couldn’t afford them. It was poisoned candy because it was things people couldn’t pay back. So it was actually the regulation of the banking industry.


Boston Globe columnist Jeff Jacoby (9/28/08) contended that “the pressure to make more loans to minorities (read: to borrowers with weak credit histories) became relentless.” Blaming the CRA made the front page at Investor’s Business Daily (9/24/08), in a piece entitled “How a Clinton-Era Rule Rewrite Made Subprime Crisis Inevitable.” The steady drumbeat of the blame-the-CRA stories prompted Talking Points Memo (9/23/08) to compile a video of conservatives pointing fingers at the law as the cause for the crisis.

The remarkable thing about the spread of the CRA story was that it was simple to refute: The basic facts about the regulation didn’t support the accusations. Gregory Squires, a sociology professor at George Washington University who studies redlining, said one of the gratifying effects of the move to blame the CRA was the eventual pushback by some publications. In outlining what the CRA really does, those stories and editorials educated people about what had been a misunderstood and slightly obscure 30-year-old law, he noted.

Editorials in the L.A. Times (10/25/08) and in the New York Times (10/15/08) dismissed the charges surrounding the CRA as inaccurate; as the NYT pointed out, CRA rules apply to banks, not to the private, unregulated mortgage lenders that made the vast majority of subprime loans during the boom. And the L.A. Times noted that the CRA was not the source of the mortgage products blamed for defaults:

The last things anyone wanted from the CRA were the exotic mortgages that have failed at alarming rates, including “liar loans” and “negative amortization” mortgages whose low payments pushed borrowers deeper into debt. So why did those types of loans and other questionable practices proliferate? Because they generated higher returns for lenders and investors.


The Washington Post also ran a news story refuting the claims (10/3/08). And Aaron Pressman of Business Week (9/29/08) offered a particularly sharp rebuttal, calling CRA critics “know-nothings,” linking to Congressional testimony and other evidence exonerating the CRA, as well as providing a summary of posts in the blogosphere challenging the idea.

McClatchy Newspapers also followed up with a widely cited piece (10/12/08) that pinpointed the private sector as the source of the subprime boom:

Federal Reserve Board data show that: More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions. Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year. Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that’s being lambasted by conservative critics.

But in many ways the pushback was too little, too late. Despite the rebuttals, it has become an article of faith among many that the CRA played some part in the housing crisis problem. And the attention paid to the CRA overshadowed what should have been a genuine controversy over discriminatory lending behavior in the mortgage market during the housing boom.

In the heat of the CRA debate, Mike Masterson, a columnist for the Arkansas Democrat-Gazette (9/23/08), tied the Community Reinvestment Act to the landmark 1988 “Color of Money” series written by the Atlanta Journal-Constitution’s Bill Dedman (5/1"4/88). Masterson wrote that Dedman’s series “exposed the practice of redlining by banks that routinely declined risky home loans in low-income neighborhoods.” The exposé, Masterson argued, “pitched the snowball that grew into the avalanche and buried our leading mortgage institutions” because it prompted wider expansion and enforcement of the CRA.

Here’s Dedman’s response, posted to the Red State Conservative blog (9/26/08), which had excerpted the Masterson piece:

In his opinion article accusing me of starting the mortgage credit crisis, Mike Masterson makes a fundamental misunderstanding. My 1988 series of articles in the Atlanta Journal-Constitution dealt with the failure of banks and savings and loans to make mortgage loans in middle-income black neighborhoods. Middle-income black neighborhoods. But all Mr. Masterson remembered from these articles was “black,” so he made an assumption. He writes, “Bill Dedman in 1989 [sic] produced a series called ‘The Color of Money’ that exposed the practice of redlining by banks that routinely declined risky home loans in low-income neighborhoods.”
See what he did? Hearing “black,” Mr. Masterson decided that meant “low-income.” He thought “black” meant “risky.”


Masterson apologized for the error (10/2/08), but the exchange illustrates what worries some people about the CRA coverage. Ellen Seidman of the New America Foundation, who has written extensively about the CRA, said she thinks that “some damage definitely has been done” by the frequent references, especially on talk radio, to the characterization of minority borrowers as risky borrowers, and to the linkage of the CRA with the housing mess. “I do think there has been sufficient pushback so that few would be willing to say (as some did 6"8 months ago) that CRA is the cause of the problem, but the residual notion that it might have been a contributor is out there,” Seidman said in an email.

Where this will come up is in efforts to amend and/or extend CRA to take into account the very new financial landscape, a topic that will likely arise as part of financial services regulation restructuring. The argument will be, “Well, maybe CRA didn’t cause the problem, but it was part of a series of misguided public interventions in the market that contributed, and we shouldn’t exacerbate the problem by expanding/extending CRA.”

Jesse Van Tol of the National Community Reinvestment Coalition (NCRC) said the lasting impression left from the debate was that low-income and minority borrowers bear most of the blame for the housing crisis. “While some borrowers speculated or ‘bought too much home,’ the major contributing factor to the foreclosures crisis was reckless and irresponsible lending,” he said.

The claim that minority borrowers were to blame adds insult to injury, since predatory lending and the foreclosure crisis have already and will continue to wipe out billions of dollars of wealth in communities of color. The ink is not yet dry on this one, but I suspect that the idea that borrowers are to blame has gotten more resonance than it rightly deserves.

That resonance exists in some measure because blaming the CRA put borrowers on the defensive. The pushback involved explaining that the CRA didn’t force banks to lend to risky borrowers"instead of focusing on the culpability of lenders in targeting minority borrowers for high-cost loans to begin with.

Plenty of evidence exists to document that problem. In July, the NCRC released a study (NCRC.org, 7/31/08) showing that minority borrowers, regardless of income, were the most at risk of receiving high-cost mortgage loans. And the tendency for minority borrowers to pay more than their white counterparts for their loans increased with the minority borrowers’ incomes.

The previous month, an analysis of foreclosures in the Washington, D.C., area found Prince George’s County"the nation’s wealthiest black suburb (Washington Post, 7/26/07)"had one of the highest foreclosure rates in the nation (Washington Post, 6/19/08). A year earlier, the Post, using an analysis of Federal Reserve data, concluded that Prince George’s County residents were more likely to have subprime loans than predominantly white areas"a disparity that couldn’t be explained by the county’s credit scores, which ranked above state averages (Washington Post, 3/17/07).

In many ways, media let CRA’s opponents set both the terms and tenor of the debate. As a result, the real scandal"the discrimination against minority borrowers at all income levels"failed to get the coverage it deserved.

... and Clinton ...

But that's not the point I want to make. My problem with your explanation is this: Greed is eternal. So are greedy bankers and realtors. But the meltdowns in banking and real estate aren't eternal. They are happening right now. With that in mind, how do you connect the eternal cause you suggest to effects that are happening specifically in 2008/2009?

Simple; the collateralization of debt, CDO and credit default swaps.

Meltdowns in real estate are real, cyclical and somewhat predictable. They only have infected the banks this cycle due to massive institutional investment in these mortgages; when the cycle came around, it dragged down far too many institutions who were using these 'novel' investment vehicles.

To blame anything other than this, for the financial crisis, is just folly, sorry. Nothing we could have done would have changed the housing cycle; but we didn't have to hitch our financial wagons to it.

Cycloptichorn

cycloptichorn has his views, I have mine. I believe the evidence is more persuasive in the writings below:


Those with an open mind, read the following. If you do not, then others will review it and make up their own minds.


FROM NATIONAL REVIEW OCTOBER 7TH 2008
"At this point, both ACORN and the Clinton administration were working together to impose large numerical targets or “set asides” (really a sort of poor and minority loan quota system) on Fannie and Freddie. ACORN called for at least half of Fannie and Freddie loans to go to low-income customers. At first the Clinton administration offered a set-aside of 30 percent. But eventually ACORN got what it wanted. In early 1994, the Clinton administration floated plans for committing $1 trillion in loans to low- and moderate-income home-buyers, which would amount to about half of Fannie Mae’s business by the end of the decade. Wall Street Analysts attributed Fannie Mae’s willingness to go along with the change to the need to protect itself against still more severe “congressional attack.” News reports also highlighted praise for the change from ACORN’s head lobbyist, Deepak Bhargava.

This sweeping debasement of credit standards was touted by Fannie Mae’s chairman, chief executive officer, and now prominent Obama adviser James A. Johnson. This is also the period when Fannie Mae ramped up its pilot programs and local partnerships with ACORN, all of which became precedents and models for the pattern of risky subprime mortgages at the root of today’s crisis. During these years, Obama’s Chicago ACORN ally, Madeline Talbott, was at the forefront of participation in those pilot programs, and her activities were consistently supported by Obama through both foundation funding and personal leadership training for her top organizers.

Finally, in June of 1995, President Clinton, Vice President Gore, and Secretary Cisneros announced the administration’s comprehensive new strategy for raising home-ownership in America to an all-time high. Representatives from ACORN were guests of honor at the ceremony. In his remarks, Clinton emphasized that: “Out homeownership strategy will not cost the taxpayers one extra cent. It will not require legislation.” Clinton meant that informal partnerships between Fannie and Freddie and groups like ACORN would make mortgages available to customers “who have historically been excluded from homeownership.”

Disaster
In the end of course, Clinton’s plan cost taxpayers an almost unimaginable amount of money. And it was just around the time of his 1995 announcement that the Chicago papers started encouraging bad-credit customers with “dog-food” wages, little money in the bank, and even histories of bankruptcy to apply for home loans with the help of ACORN. At both the local and national levels, then, ACORN served as the critical catalyst, levering pressure created by the Community Reinvestment Act and pull with Democratic politicians to force Fannie Mae and Freddie Mac into a pattern of high-risk loans.

Up to now, conventional wisdom on the financial meltdown has relegated ACORN and the CRA to bit parts. The real problem, we’ve been told, lay with Fannie Mae and Freddie Mac. In fact, however, ACORN is at the base of the whole mess. ACORN used CRA and Democratic sympathizers to entangle Fannie and Freddie and the entire financial system in a disastrous disregard of the most basic financial standards. And Barack Obama cut his teeth as an organizer and politician backing up ACORN’s economic madness every step of the way."

ACORN is a community organization like any other that influenced some politicians. It's up to the politicians to make sure any organization trying to influence their votes should do so after making sure that the organization is free from fraud.

Honest people make mistakes based on who they know, and what they perceive to be good policies for Americans.

ACORN has been charged with registering voters who did not exist or were dead during the last election, because people were paid by the number of voters they were able to register. This is obviously fraud, but it's up to the state registrar of voters to make sure "Mickey Mouse" would not be allowed to vote, irregardless of who was submitted as a "voter."

So, what's your point?

http://www.obamaunveiled.com/test_files/Obama-ACORN.pdf

Cicerone Impostor wrote:

ACORN has been charged with registering voters who did not exist or were dead during the last election, because people were paid by the number of voters they were able to register. This is obviously fraud, but it's up to the state registrar of voters to make sure "Mickey Mouse" would not be allowed to vote, irregardless of who was submitted as a "voter."

The point, Cicerone Imposter, is that the left wing of the Democratic Party backed by the ACLU raised holy hell about the request that the voters be required to present identification.

The state registrar can do NOTHING in such a situation.

You obviously lack the understanding of voting laws. Anyone can cry bloody murder about voting, but all must still follow the laws. Nobody can require the state's registrar of voters to let Mickey Mouse vote - legally.

As for ID's, that's easily accomplished without a birth certificate. Most people have other forms of ID that is accepted as a legal document such as a driver's license, passport, and tax returns.

Youmust then be completelyunaware that in some venues , "poor" people did not have identification and were allowed to vote by merely signing an affidavit that they lived at a certain address.

Oh, they were allowed to vote? LOL

yes, they were allowed to vote and as you said yourself,the voter fraud was enormous. In Chicago, they voted dead people!

There was an attempt to register dead people, but they were never allowed to vote unless the sight of a corpse being propped up on roller skates didn't scare the hell out of the volunteers at the polls. Where's the evidence that dead people actually cast a ballot?

Oh, dead people voted, and their votes were counted? You have evidence of this?

The religious right's fears about homosexual's destroying the American family unit is the same fear used by the right that dead people voted in the last election.

They have lost all reason and common sense.