tag:blogger.com,1999:blog-9430835.post9105628709725841049..comments2024-03-19T02:31:02.140-07:00Comments on Steve Sailer: iSteve: The Subprime Fiasco: "Predatory Lending" or "Predatory Securitizing?"Unknownnoreply@blogger.comBlogger11125tag:blogger.com,1999:blog-9430835.post-17294699928357146792009-04-21T19:47:00.000-07:002009-04-21T19:47:00.000-07:00Anonymous says:
"if you can use a single wad of ca...Anonymous says:<br />"if you can use a single wad of cash repeatedly to generate an unlimited stream of worthless mortgage securities to sell to suckers, well, now you've got a criminal enterprise worthy of respect!"<br /><br />Fractional-reserve banking uses a single wad of cash to generate a much larger wad of cash, but that fractional reserve places a limit on how big the larger wad is.<br /><br />Until some genius figures out a way around the rules, <A HREF="http://arxiv.org/pdf/0904.1426v1" REL="nofollow">by using securitizing to get around the reserve limits, and turn a limited money-generating process into an unlimited one</A>.Anthonyhttps://www.blogger.com/profile/12389602137217799305noreply@blogger.comtag:blogger.com,1999:blog-9430835.post-61756253139910523802009-04-20T21:22:00.000-07:002009-04-20T21:22:00.000-07:00And, ultimately, everyone just assumed that if the...And, ultimately, everyone just assumed that if the loans went South, they would be covered by the Federal Government -- which is all-knowing and all-wise in its regulations of lending and use of taxpayer money. And it never would inflate the dollar to cover its spending. Never. Really.John Seilerhttps://www.blogger.com/profile/03795977089953532965noreply@blogger.comtag:blogger.com,1999:blog-9430835.post-64551530532999544252009-04-20T12:19:00.000-07:002009-04-20T12:19:00.000-07:00You're right on both counts, Clem. BTW, I wasn't b...You're right on both counts, Clem. BTW, I wasn't being, you know, serious.Jim Ohttps://www.blogger.com/profile/01912710881278409532noreply@blogger.comtag:blogger.com,1999:blog-9430835.post-3955566479974322682009-04-20T10:14:00.000-07:002009-04-20T10:14:00.000-07:00Okay, Maybe The Community Reinvestment Act Is A Pr...Okay, Maybe The Community Reinvestment Act Is A Problem (BAC)<br /> <br /><br />The effect that the Community Reinvestment Act (CRA) on the housing is one of the touchier questions in the financial crisis debate. The act was designed to encourage more minority lending, and though it doesn't require banks to lend out to shaky borrowers, banks make certain CRA commitments in order to get regulatory approval for acquisitions.<br /><br />A possible effect of this is that banks wishing to grow via acquisition end up with an outsize volume of these commitments.<br /><br />So what's the effect at national banking giant Bank of America (BAC).<br /><br />On the company's conference call, CFO Joe Price said the CRA book accounts for 7% of the total in residential mortgages, but 24% of the losses.<br /><br />That alone doesn't put all the problem on the CRA' shoulders, but obviously the losses in this portfolio are way out of proportion.<br /><br /><br />http://tinyurl.com/df5so8Pat Shuffnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-58488251361588547012009-04-20T08:46:00.000-07:002009-04-20T08:46:00.000-07:00Well then copyright it!In the U.S., anything you w...<I>Well then copyright it!</I>In the U.S., anything you write is <A HREF="http://en.wikipedia.org/wiki/United_States_copyright_law#Registration_of_copyright" REL="nofollow">automatically copyrighted</A> at its moment of creation.<br /><br />You also can't copyright titles; but maybe if Steve wrote and published a book with only those <I>two words</I> in it, and anyone else tried to use them, he could <I>try</I> to claim copyright infringement (of the entire text).<br /><br />I'm just sayin'....<br /><br />(I don't think you could <A HREF="http://en.wikipedia.org/wiki/Trademark" REL="nofollow">trademark</A> the phrase either, unless you started using it in a business/product context. Then again, I'm not a lawyer....)clemhttp://www.hiplikeme.comnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-74176730813956965722009-04-20T08:38:00.000-07:002009-04-20T08:38:00.000-07:00I thought this was obvious! It's a very strange s...I thought this was obvious! It's a very strange scam that starts out with me taking a big wad of cash out of my pocket and handing it to you, in the hope that I will be able to get back something more valuable from you in the future. Scams don't work that way. Scams work by you giving a big wad of cash to me, right now, and me giving you something worthless in return.<br /><br />So the idea of predatory lending in a traditional sense really doesn't make much sense. Banks that hold loans aren't going to give their money to people they expect to lose it. It would be cheaper to just buy the damn houses outright! But if you can use a single wad of cash repeatedly to generate an unlimited stream of worthless mortgage securities to sell to suckers, well, now you've got a criminal enterprise worthy of respect!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-65295778864149537602009-04-20T08:10:00.000-07:002009-04-20T08:10:00.000-07:00The reason this occurred is not (not that I sugges...The reason this occurred is not (not that I suggest you are saying this) that all investors are complete buffoons, including institutional investors. The reason is that rating agencies stamped many of these things with AAA ratings. You have previously identified the real culprit here, and that is that nobody was willing to say "hey, housing is a bubble. Stop investing in it and securities related to it." The whole housing prices haven't dropped since the GD was a compelling argument to people drunk on the notion of bags of money. <br /><br />Keep in mind that these players are the most sophisticated out there. Thus, another important aspect of the situation is that compensation incentives encouraged employees to engage in creating and selling these securities, even in if they--being on the ground--knew they were probably over-rated by the rating agencies. As you state, top managers never got the picture that lower level managers had because the lower level people had no reason to pass the information up.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-34406406587141738792009-04-19T21:21:00.000-07:002009-04-19T21:21:00.000-07:00"what do you say to the libertarian argument that ..."what do you say to the libertarian argument that state-sanctioned predatory lending is ultimately more humanistic than forced poverty .." <br /><br />Get out of here! Is that really a libertarian argument? They're getting weirder by the day if so.<br /><br />I keep getting the feeling that libertarians listened carefully to the lefts caricature of the evil capitalists and said to themselves, "Hey, that's what we should be!". It's lucky for them that the left never accused capitalists of eating their own young, or they'd feel obligated to do that as well.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-52842062951395537392009-04-19T20:11:00.000-07:002009-04-19T20:11:00.000-07:00Steve, what do you say to the libertarian argument...Steve, what do you say to the libertarian argument that state-sanctioned predatory lending is ultimately more humanistic than forced poverty or borrowing from the local ethnic Tony Soprano?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9430835.post-66995250762026337112009-04-19T18:17:00.000-07:002009-04-19T18:17:00.000-07:00They securitized me a mickey.They securitized me a mickey.agnostichttps://www.blogger.com/profile/12967177967469961883noreply@blogger.comtag:blogger.com,1999:blog-9430835.post-7889808444929207642009-04-19T17:54:00.000-07:002009-04-19T17:54:00.000-07:00Well then copyright it!Well then copyright it!Jim Ohttps://www.blogger.com/profile/01912710881278409532noreply@blogger.com