CNN: 25 people to blame for the financial crisis

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CNN: 25 people to blame for the financial crisis

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Cool article.
http://www.time.com/time/specials/packa ... 50,00.html

Here they are, in no particular order:
Angelo Mozilo

The son of a butcher, Mozilo co-founded Countrywide in 1969 and built it into the largest mortgage lender in the U.S. Countrywide wasn't the first to offer exotic mortgages to iffy borrowers, but it popularized such products. In the wake of the housing bust, which toppled Countrywide, Mozilo's lavish pay package was excoriated by critics. He left Countrywide last summer after its sale to Bank of America, which later pledged to pay $8.7 billion to settle predatory-lending charges filed against Countrywide filed by 11 state attorneys general.

Phil Gramm

As chairman of the Senate Banking Committee from 1995 through 2000, Gramm was Washington's outspoken champion of deregulation. And he got it, by playing a lead role in the writing and passage of the 1999 repeal of the Depression-era Glass-Steagall Act, which had separated commercial banks from Wall Street. Then he inserted a provision into the 2000 Commodity Futures Modernization Act that exempted derivatives like credit-default swaps from regulation.

Alan Greenspan

He was the one who could have stopped it. As Federal Reserve chairman, Greenspan deftly managed the 1987 stock-market crash and presided over the 1990s economic boom, cementing his status as Washington's money wizard. But the low interest rates he sired in the early 2000s and his long-standing disdain for regulation underpinned the mortgage crisis. The maestro admitted in an October congressional hearing that he had "made a mistake in presuming" that financial firms could regulate themselves.

Chris Cox

The ex-SEC chief's blindness to repeated allegations of fraud in the Madoff scandal is mind-blowing, but it's his lax enforcement that lands him on this list. Cox says his agency lacked authority to limit the massive leveraging that led to the financial collapse. In truth, the SEC had plenty of power to rein in risky behavior by such investment banks as Lehman Brothers and Merrill Lynch, but it chose not to. Cox oversaw the dwindling SEC staff and a sharp drop in action against some traders. We could have used more.

American Consumers

We really enjoyed living beyond our means. No wonder we wanted to believe it would never end. But the bill is due. Household debt in the U.S. — the money we owe as individuals — zoomed to more than 130% of income in 2007, up from about 60% in 1982. We've been borrowing, borrowing, borrowing — living off and believing in the wealth effect, first in stocks, which ended badly, then in real estate, which has ended even worse. Now we're out of bubbles. We have a lot less wealth — and a lot more effect.

Hank Paulson

When Paulson left the top job at Goldman Sachs to become Treasury Secretary in 2006, his big concern was whether he'd have an impact. Careful what you wish for. He almost single-handedly ran economic policy for the last year of the Bush Administration. Impact? You bet. Positive? Not yet. Paulson was too late in battling the crisis, and letting Lehman fail was a pivotal mistake that rapidly eroded confidence. His attempt to fix the problem — a bailout that netted $700 billion from Congress — has been a wasteful mess.

Joe Cassano

Before the meltdown, few people had ever heard of credit-default swaps. They are insurance contracts — or, if you prefer, wagers — that a company will pay its debt. As a founding member of AIG's financial-products unit, Cassano knew them cold. In good times, AIG's massive CDS-issuance business minted money by essentially writing insurance against a financial Katrina. What were the odds? Those contracts were at the heart of AIG's downfall. So far, the U.S. has invested and lent $150 billion to keep AIG afloat.

Ian McCarthy

As CEO of Beazer Homes since 1994, McCarthy has become something of a poster child for worst builder behaviors. In 2007 the Charlotte Observer highlighted Beazer's aggressive sales tactics, including lying about borrowers' qualifications to help them get loans. The company has admitted that its mortgage unit violated regulations — like down-payment-assistance rules — at least as far back as 2000. It is cooperating with federal investigators.

Frank Raines

Raines was at the helm of Fannie Mae, the bastard offspring of politics and finance, when things really went off course. A former Clinton Administration Budget Director, Raines took over as CEO of Fannie in 1999. He left in 2004 with the company embroiled in an accounting scandal just as it was making big investments in the subprime mortgage securities that would later sour. Last year Fannie and rival Freddie Mac became wards of the state.

Kathleen Corbet

By slapping AAA seals of approval on even risky pools of loans, rating agencies helped lure investors into collateralized debt obligations (CDOs) that are now unsellable. Corbet ran the largest agency, Standard & Poor's, though Moody's and Fitch played by similar rules. These outfits are paid for their ratings by the bond issuer, an apparent conflict of interest that has not gone unnoticed, despite the agencies' denials. As one S&P analyst wrote in an e-mail, "[A bond] could be structured by cows and we would rate it."

Dick Fuld

The Gorilla of Wall Street, as Fuld was known, steered Lehman deep into the business of subprime mortgages, bankrolling lenders across the country that were making convoluted loans to questionable borrowers. Lehman even made its own subprime loans. The firm took those loans, whipped them into bonds and passed on to investors billions of dollars of what is now toxic debt. For all this wealth destruction, Fuld raked in nearly $500 million in compensation during his tenure as CEO, which ended when Lehman did.

Marion and Herb Sandler

In the early 1980s, the Sandlers' World Savings Bank became the first to sell a tricky home loan called the option ARM. And they pushed the mortgage, which offered several ways to back-load your loan and thereby reduce your early payments, with increasing zeal and misleading advertisements over the next two decades. The couple pocketed $2.3 billion when they sold their bank to Wachovia in 2006. But losses on World Savings' loan portfolio led to the implosion of Wachovia, which was sold under duress late last year to Wells Fargo.

Bill Clinton

He oversaw an era of great ­prosperity — and deregulation. ­Clinton ushered out the Glass-Steagall Act and signed the Commodity Futures Modernization Act, which exempted credit-default swaps from regulation. He also ­loosened housing rules, putting added pressure on banks to lend in low-income neighborhoods. None of it was an endorsement of permissive lending and risk-taking. But if you believe deregulation is to blame for our troubles, then Clinton earned a share too.

George W. Bush

From the start, the "ownership society's" No. 1 fan embraced deregulation and allowed federal oversight agencies to ease off on banks and mortgage brokers. True, he stumped for tighter controls over Fannie Mae and Freddie Mac and backed and signed the aggressively regulatory Sarbanes-Oxley Act after Enron blew up. But when SEC head William Donaldson tried to regulate hedge funds, he was blocked by Bush's advisers at the White House and quit. Plus, let's face it, the meltdown happened on Bush's watch.

Stan O'Neal

Merrill Lynch's CEO for nearly six years, ending in 2007, he guided the firm from its familiar turf — fee businesses like asset management — into the lucrative game of creating collateralized debt obligations, which were largely made up of subprime mortgage bonds. To provide a steady supply of the bonds — the raw pork for his booming sausage business — O'Neal allowed Merrill to load up on $41 billion of them. As the subprime market unwound, Merrill went into crisis, and Bank of America swooped in to buy it.

Wen Jiabao

If cheap credit was the crack cocaine of this crisis — and it was — then China was one of our primary dealers. Wen leads a China that is now the U.S.'s largest creditor, holding some $1.7 trillion in dollar-denominated debt. Its massive dollar holdings can be linked to determined efforts to control the value of the renminbi vs. the buck; China didn't want its currency to rise too rapidly against the dollar, in part because a cheap currency kept its export sector humming. And humming it was until U.S. demand cratered last fall.

David Lereah

When the chief economist at the National Association of Realtors, an industry trade group, tells you the housing market is going to keep on chugging forever, you apply the discount. But Lereah, who held the position through early 2007, did more than issue rosy forecasts. In his 2005 book, Are You Missing the Real Estate Boom?, and elsewhere, he regularly trumpeted the infallibility of housing. Lereah grew concerned about the market in 2006, but consider his January 2007 statement: "It appears we have established a bottom."

John Devaney

Hedge funds played an important role in the shift to sloppy mortgage lending, and Devaney was one of the cheerleaders. By buying up mortgage loans, Devaney and other hedgies earned fat returns for a while, which encouraged mortgage outfits to make ever sketchier loans. Devaney knew some of those products were ugly; in early 2007, referring to option ARMs, he told Money, "The consumer has to be an idiot to take on those loans, but it has been one of our best-­performing investments."

Bernie Madoff

His alleged Ponzi scheme could inflict $50 billion in losses on society types, retirees and nonprofits. The bigger cost comes from the notion that Madoff pulled off an epic fraud right under the noses of regulators. Assuming it's all true, the banks and hedge funds that neglected due diligence were stupid and paid for it, while the "feeders" were reprehensibly greedy. But if in fact Madoff depantsed the regulators, exposing them as grossly incompetent, then this downturn is that much tougher to take.

Lew Ranieri

Meet the father of mortgage-backed bonds. In the late 1970s, the college dropout and Salomon trader coined the term securitization to name a tidy bit of financial alchemy in which loans were packaged and sold to institutional investors. It was a terrific idea, as it allowed banks to shed risk and make more loans. But as home ownership exploded in the early 2000s, the mortgage-bond business inflated Wall Street's bottom line. So the firms placed ever bigger bets on ever riskier varieties of these securities. You know the rest.

Burton Jablin

The programming czar at Scripps Networks, which owns HGTV and other lifestyle channels, never made a subprime loan. But his shows pumped air into the real estate froth by teaching us how to extract value from our homes. ­Designed to Sell, House Hunters and My House Is Worth What? created addicted ­audiences. So did shows like Flip That House (TLC) and Flip This House (A&E). No one on these shows ever seemed to lose a dollar, giving the housing game a little too much glamour and gusto.

Fred Goodwin

The face of overreaching bankers everywhere, Goodwin got greedy. More than 20 takeovers helped him transform the Royal Bank of Scotland (RBS) into a world beater after he assumed control in 2000. But he couldn't stop there. As the gloom gathered in 2007, Goodwin's mouth watered over a $100 billion takeover of Dutch rival ABN Amro, stretching RBS's capital reserves to the limit. The result: the British government last fall pumped $30 billion into the bank, which ­expects 2008 losses to be the biggest in U.K. corporate history.

Sandy Weill

Who decided banks had to be all things to all customers? Weill did. Starting with a low-end lender in Baltimore, he cobbled together the first great financial supermarket, Citigroup. Along the way, Weill's serial acquisitions, (Travelers, Smith Barney, etc.) and persistent lobbying shattered Glass-Steagall, the law that limited banks' ambitions. Rivals followed Citi. The swollen banks are one of the nation’s major economic problems. Solution? Back to banking. Citigroup is selling Smith Barney and other noncore assets.

David Oddsson

In his two decades as Iceland's Prime Minister and then as central-bank governor, Oddsson made his tiny country an experiment in free-market economics by privatizing three main banks, floating the currency and fostering a golden age of entre­preneurship. When the market turned ... whoops! Iceland's economy is now a basket case. The three banks, which were massively leveraged, are in receivership, GDP could drop 10% this year, and the IMF stepped in after the currency lost more than half its value. Nice experiment.

Jimmy Cayne

No Wall Street CEO seemed more asleep at the switch than Bear Stearns' Cayne. He left the office by helicopter for long golf weekends. He was regularly out of town at bridge tournaments and reportedly smoking pot. (Cayne denies the weed allegation.) Back at the office, Cayne's charges bet the firm on risky home loans. Two of its highly leveraged hedge funds collapsed in mid-2007. That was the beginning. Eventually, Bear was sold for less than the value of its office building. "I didn't stop it. I didn't rein in the leverage," Cayne later told Fortune.
Seems like a pretty good article to me. Anything people can find to disagree with? It's too bad so many Americans think Clinton was some kind of hard-left liberal. He really wasn't; his entire career was based on taking the Democratic Party sharply to the right in order to poach voters from the Republicans.
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Re: CNN: 25 people to blame for the financial crisis

Post by Gerald Tarrant »

I'm going to quibble about Wen Jiabao's place on the list. Just because the US used cheap credit badly doesn't mean cheap credit is a problem. If the cheap lending had been used to fund 100's of new nuclear reactors, or awesome inner city schools, or boot-strap our way into space, or countless other things, we'd have no complaints about China's trade manipulations. I don't know who else I'd put on the list in his place, but the gift that China gave the US in cheap abundant credit could have been wisely used; the failure to do that isn't China's fault. Surely there's another American somewhere who had a hand in our profligacy that can take Chairman Wen's place.
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Re: CNN: 25 people to blame for the financial crisis

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Gerald Tarrant wrote:I'm going to quibble about Wen Jiabao's place on the list. Just because the US used cheap credit badly doesn't mean cheap credit is a problem. If the cheap lending had been used to fund 100's of new nuclear reactors, or awesome inner city schools, or boot-strap our way into space, or countless other things, we'd have no complaints about China's trade manipulations. I don't know who else I'd put on the list in his place, but the gift that China gave the US in cheap abundant credit could have been wisely used; the failure to do that isn't China's fault. Surely there's another American somewhere who had a hand in our profligacy that can take Chairman Wen's place.
You could probably look at all of the Republicans involved in the "Contract with America" that began early in Clinton's term and forced him to move further to the right in order to stabilize his power base.
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Re: CNN: 25 people to blame for the financial crisis

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Well then, why quibble with his lessers, lets start with Newt Gingrich as a decent replacement for Chairman Wen.
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Re: CNN: 25 people to blame for the financial crisis

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Another name just popped into my mind: Ross Perot.

People forget that while Reagan pushed this whole tax cut and deregulation dogma, its critics still had power as late as 1992. George HW Bush called it "Voodoonomics" and was able to win the presidency after all, and conservatives were arguing that his tax increases were prudent measures that were required in order to control the deficit.

But Ross Perot dealt a body-blow to those critics, and by the time the "Contract with America" began, the entire conservative movement had swung wholeheartedly into the "tax cuts forever, don't worry be happy" camp. It became anathema to the conservative movement to ever tell anyone to tighten their belts, for any reason.
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Re: CNN: 25 people to blame for the financial crisis

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I think the moment at which anything like honest conservatism died was when George H W Bush failed to win re-election in 1992. But the combination with Ross Perot's vote drain might have been the quintessential combination (especially considering Clinton's plurality, it means he robbed some of the would-be Democrat voting pool).
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Re: CNN: 25 people to blame for the financial crisis

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Ross Perot famously said that a government should be run like a business. Without debating the merits of that particular assertion, I'll say this: the people seemed to receive his message in the sense that they now view the government as a business, and themselves as its customers.

How do you treat a business? You demand the lowest possible price, and the greatest possible service. And you don't particularly care if the business is losing money, because that's not your problem. Even if the business is on the verge of bankruptcy, you would expect "great deals", and in fact, you'd probably expect even better deals than normal.

The problem is that this works in the business world because if the business fails, you just shrug and go to one of its competitors. The people have not woken up to the fact that it does not work for government, because if the government fails, we're all fucked.
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"It's not evil for God to do it. Or for someone to do it at God's command."- Jonathan Boyd on baby-killing

"you guys are fascinated with the use of those "rules of logic" to the extent that you don't really want to discussus anything."- GC

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"Viagra commercials appear to save lives" - tharkûn on US health care.

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Re: CNN: 25 people to blame for the financial crisis

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When I read this title, I was immediately reminded of a line from the Simpson movie:
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Re: CNN: 25 people to blame for the financial crisis

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Darth Wong wrote:Ross Perot famously said that a government should be run like a business. Without debating the merits of that particular assertion, I'll say this: the people seemed to receive his message in the sense that they now view the government as a business, and themselves as its customers.

How do you treat a business? You demand the lowest possible price, and the greatest possible service. And you don't particularly care if the business is losing money, because that's not your problem. Even if the business is on the verge of bankruptcy, you would expect "great deals", and in fact, you'd probably expect even better deals than normal.

The problem is that this works in the business world because if the business fails, you just shrug and go to one of its competitors. The people have not woken up to the fact that it does not work for government, because if the government fails, we're all fucked.
Is that really what Ross Perot meant? It always seemed to me that he meant government should generate a profit, or at least have a balanced budget. Of course, I was a teenager in 1992, so I could be oversimplifying.

I'm surprised Ronald Reagan - King of Ballooning Debt - isn't on that list.
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Re: CNN: 25 people to blame for the financial crisis

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It isn't what Perot intended, but it's a predictable consequence of what he promoted. His highly successful publicity campaign about running government like a business naturally led to people thinking of government like a business: the sort of entity that you buy goods and services from. The only problem is that the consumer-business relationship is like a pair of gay toppers: both parties are constantly trying to buttfuck each other.
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"It's not evil for God to do it. Or for someone to do it at God's command."- Jonathan Boyd on baby-killing

"you guys are fascinated with the use of those "rules of logic" to the extent that you don't really want to discussus anything."- GC

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"Viagra commercials appear to save lives" - tharkûn on US health care.

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Re: CNN: 25 people to blame for the financial crisis

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What, no mention of Gordon Brown or Milton Friedman? Although as in the other thread, Margaret Thatcher shares alot of teh blame, since like Reagan, she set the rot in many years ago.
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Re: CNN: 25 people to blame for the financial crisis

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Saying China has no responsibility for the present economic mess is almost like saying a mortgage lender has no responsibility for the rate of foreclosures. Certainly, one would hope that the U.S. government would spend their borrowed money more wisely than the average homeowner, but at the very least China has a responsibility to its own economy. Swiftly falling exports and rising unemployment suggest that the strategy of encouraging exports (by buying dollars and lending them back to us) was carried to excess. I can understand if Chinese leaders feel that their trust in U.S. economic management has been betrayed, but as lenders they had a duty to be skeptical, which they abandoned in favor of swiftly rising GDP.

There are many people who could be added to that list, but I wouldn't remove Wen Jiabao.
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Re: CNN: 25 people to blame for the financial crisis

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Gerald Tarrant wrote:I'm going to quibble about Wen Jiabao's place on the list. Just because the US used cheap credit badly doesn't mean cheap credit is a problem. If the cheap lending had been used to fund 100's of new nuclear reactors, or awesome inner city schools, or boot-strap our way into space, or countless other things, we'd have no complaints about China's trade manipulations. I don't know who else I'd put on the list in his place, but the gift that China gave the US in cheap abundant credit could have been wisely used; the failure to do that isn't China's fault. Surely there's another American somewhere who had a hand in our profligacy that can take Chairman Wen's place.
Just like the American consumer, China is an enabler. If they didn't buy all those US T-bills & agency bonds, America would not be able to run its Ponzi debt financing schemes. If the US is an alcoholic, US consumers & China are the friends who keep going to the liquor store to buy him more booze.

Also, I'm shocked "helicopter" Ben Bernanke isn't on the list. He's carried over the policies of Greenspan and cranked them up to warp speed, and along with Hank Paulson he's carried out failed policies which are unconstitutional and outright illegal, not to mention highly damaging to everyone in the US who isn't one of their "favoured partners". Hank & Ben should be in jail. For the rest of their lives.
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Re: CNN: 25 people to blame for the financial crisis

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You forgot Barney Frank, who held off increased oversight of Fannie Mae etc until the whole thing collapsed in a cratered mess which triggered this entire mess.
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Re: CNN: 25 people to blame for the financial crisis

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MKSheppard wrote:You forgot Barney Frank, who held off increased oversight of Fannie Mae etc until the whole thing collapsed in a cratered mess which triggered this entire mess.
That idiot too. He voted for and handed out the bailout funds with no strings attached (it even said so in the bill), and then wonders why the bankers stuffed $70 billion into their offshore bank accounts. That's what bankers do when you give them free money, moron.
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Re: CNN: 25 people to blame for the financial crisis

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J wrote:That idiot too.
I love how that article goes:

"True, he stumped for tighter controls over Fannie Mae and Freddie Mac" regarding Bush, and completely leaves out Frank, who completely derailed any attempt to tighten regulations on them.
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Re: CNN: 25 people to blame for the financial crisis

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Big Orange wrote:What, no mention of Gordon Brown or Milton Friedman? Although as in the other thread, Margaret Thatcher shares alot of teh blame, since like Reagan, she set the rot in many years ago.
I wonder about Friedman. He was not an anarchist; it is my understanding that he believed the economy should be regulated chiefly through the use of monetary policy. For example, if he had his way, the money supply would have remained essentially constant, or grown at a constant rate. I think that if that'd been the case, the easy credit boom couldn't have happened; I could be wrong, though.

As far as the stuff on the list about the Glass-Steagall Act's overturn - weren't commercial banks underwriting securities because of a loophole in the law as early as the 1980s?
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Re: CNN: 25 people to blame for the financial crisis

Post by Illuminatus Primus »

MKSheppard wrote:
J wrote:That idiot too.
I love how that article goes:

"True, he stumped for tighter controls over Fannie Mae and Freddie Mac" regarding Bush, and completely leaves out Frank, who completely derailed any attempt to tighten regulations on them.
A crisis like this would've happened without all the involvement by Fannie and Freddie, or even with their books being not quite as bad. The GOP myth that the Community Reinvestment Act was a major or THE MAJOR contributor is just that - a myth. CRA-regulated mortgages performed better or the same as non-CRA ones. This was not caused by excessive interference by government in the free market. It was caused by unrealistic expectations of the performance of the free market, and cynical self-serving aggravating policies enacted by plutocrats and short-term thinkers in government.
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Re: CNN: 25 people to blame for the financial crisis

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Illuminatus Primus wrote:CRA-regulated mortgages performed better or the same as non-CRA ones.
Do you have a source for this?
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Re: CNN: 25 people to blame for the financial crisis

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This is a very US-centric list. There are lots of bankers and politicians from Asia and Europe missing from this list. This is a global problem - not just an American one. No mention of Gordon Brown?
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Re: CNN: 25 people to blame for the financial crisis

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Ubiquitous wrote:This is a very US-centric list. There are lots of bankers and politicians from Asia and Europe missing from this list. This is a global problem - not just an American one. No mention of Gordon Brown?
How many of these people were just following America's lead, though?
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Re: CNN: 25 people to blame for the financial crisis

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Surlethe wrote:
Illuminatus Primus wrote:CRA-regulated mortgages performed better or the same as non-CRA ones.
Do you have a source for this?
Wikipedia wrote:In the February 2008 House hearing, law professor Michael S. Barr, a Treasury Department official under President Clinton,[67][34] stated that a Federal Reserve survey showed that affected institutions considered CRA loans profitable and not overly risky. He noted that approximately 50% of the subprime loans were made by independent mortgage companies that were not regulated by the CRA, and another 25% to 30% came from only partially CRA regulated bank subsidiaries and affiliates. Barr noted that institutions fully regulated by CRA made "perhaps one in four" sub-prime loans, and that "the worst and most widespread abuses occurred in the institutions with the least federal oversight". According to Janet L. Yellen, President of the Federal Reserve Bank of San Francisco, independent mortgage companies made risky "high-priced loans" at more than twice the rate of the banks and thrifts; most CRA loans were responsibly made, and were not the higher-priced loans that have contributed to the current crisis.[69]
The second claim is substantiated here. Many links can be followed from the cited portion in the article.
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Re: CNN: 25 people to blame for the financial crisis

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My only comment in on the "American Consumer" bit: they're an entire population, not just one person. I'm not saying that people in the USA do not have a mayor hand in the crisis, but the list should be about 25 persons personally responsible about the recession, not entire populaces.
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Re: CNN: 25 people to blame for the financial crisis

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Surlethe wrote: I wonder about Friedman. He was not an anarchist; it is my understanding that he believed the economy should be regulated chiefly through the use of monetary policy. For example, if he had his way, the money supply would have remained essentially constant, or grown at a constant rate. I think that if that'd been the case, the easy credit boom couldn't have happened; I could be wrong, though.
Milton Friedman didn't seem to be quite as loony as Rand, but he was still to a certain extent anti-government and pro-greed as this YouTube clips highlights.
As far as the stuff on the list about the Glass-Steagall Act's overturn - weren't commercial banks underwriting securities because of a loophole in the law as early as the 1980s?
But as far back as then Reaganomics was being pushed ahead.
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Re: CNN: 25 people to blame for the financial crisis

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Big Orange wrote:
Surlethe wrote: I wonder about Friedman. He was not an anarchist; it is my understanding that he believed the economy should be regulated chiefly through the use of monetary policy. For example, if he had his way, the money supply would have remained essentially constant, or grown at a constant rate. I think that if that'd been the case, the easy credit boom couldn't have happened; I could be wrong, though.
Milton Friedman didn't seem to be quite as loony as Rand, but he was still to a certain extent anti-government and pro-greed as this YouTube clips highlights.
I'll watch it when I get home. There are some unifying aspects of libertarianism - the insistence that money made is money deserved, for instance - that you'll find in both Rand and Friedman (interestingly, lolbertarians all think that Friedman is not really a libertarian because he acknowledges that government and some paternalistic policies are necessary). If you want to learn more straight from the horse's mouth, as it were, I recommend Capitalism and Freedom, by Friedman, if you can stomach reading an exposition about a philosophy with which you disagree.
As far as the stuff on the list about the Glass-Steagall Act's overturn - weren't commercial banks underwriting securities because of a loophole in the law as early as the 1980s?
But as far back as then Reaganomics was being pushed ahead.
True. The point is that banks were securitizing loans through Fannie and Freddie well before Glass-Steagall was overturned; apparently, they found a loophole in the law.
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