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we have the debt load but those underlying issues and the banks collapsing from our banking system structure and the products and methods used back then are over and done . multi layered cdo's are gone , the banks are funded and have money they can't give away and the credit swap bets are under control and not a las vegas betting parlor leveraged to the top .
we will always have different issues setting things off and historically it is always something different whether oil related , political or banking system related. the fact we have debt as a country has not been much of an issue . we have always had debt since world war 2 and prosperity .
We (almost) paid off the debt back in 1836. We'll never do it again, and the only real point of it at the time was to make good on the nation's promise to itself to repay every penny that had been borrowed to finance the Revolutionary War. Yes, the nation was born of debt.
These days, the debt is far more what others have chosen to invest. Most note-holders simply do not want their money back, no matter what hair-on-fire outsiders may think of the situation.
As for CDO's, they are still around. The fault in their gross misuse lay with the amoral and untethered greed of cowboy capitalists allowed to run amok.
Yes, but it was the lowering of lending standards in the mid-90s that were the catalyst. While the wording of the CRA wasn't materially changed, it was the aggressiveness of the regulators that mattered.
More fairy tales. CRA was passed in 1977 and established that institutions taking federal deposit insurance had an affirmative obligation to meet the credit needs as well as the depositary needs of the communities they served. Prior to Clinton, there had been no enforcement of this at all. Clinton suggested that if banks wanted favorable reviews of their applications for acquisitions or for newly available interstate banking operations, they'd better have a positive CRA review to point to. Such positive reviews did not presume that any loan at all would be made. It was enough that banks made serious efforts to find qualified borrowers. Of course, once that started, a gold mine was discovered, as half of new CRA borrowers were qualified at prime terms and nearly all the rest at Alt-A. It's easy to make money lending to such people and that's exactly what happened. CRA portfolios of the 1990s were more profitable than industry averages. CRA was both good policy and good business.
I have been looking at some incredibly interesting TV Shows (on Youtube) about the economic crisis in 2008.
Without TARP and other bailouts it seemed to me that our country would have gone into a deep depression and the stock market which funds business, pensions, retirements, etc. would have crashed even further. There would have been even more panic and no credit and maybe runs on the banks and no money in the ATM.
That is how I see it. I would like to hear from the people who think that there should have been no bailout and how it would have shaked out without TARP and other programs.
After all the whining from conservatives about how government intervention during the depression inhibited recovery and compared it to the crash of '08 I would have done absolutely nothing.
You want a free market and government to butt out of your business? Get your butts back on your corporate jets and figure it out on you own.
They should of let it crash. That way big corps and banks that made bad decisions would of went belly up, the businesses that didn't make bad decisions and others with money would of had a tremendous amount of opportunity to pick up the pieces, expand, produce, etc......
We would of been much better off in the end and recovered faster. Now, we just have a bunch of big corps and banks who feel no matter what they do the government will always bail them out.
I don't disagree with your premise. Where I see the problem however is here: American's no longer have the stomach or the will to endure very hard times. As a nation we have grown too soft and no longer have the "pull ourselves up by the boot strap" mentality. We simply want it given to us. This will ultimately be our downfall.
More fairy tales. CRA was passed in 1977 and established that institutions taking federal deposit insurance had an affirmative obligation to meet the credit needs as well as the depositary needs of the communities they served. Prior to Clinton, there had been no enforcement of this at all. Clinton suggested that if banks wanted favorable reviews of their applications for acquisitions or for newly available interstate banking operations, they'd better have a positive CRA review to point to. Such positive reviews did not presume that any loan at all would be made. It was enough that banks made serious efforts to find qualified borrowers. Of course, once that started, a gold mine was discovered, as half of new CRA borrowers were qualified at prime terms and nearly all the rest at Alt-A. It's easy to make money lending to such people and that's exactly what happened. CRA portfolios of the 1990s were more profitable than industry averages. CRA was both good policy and good business.
Again, you don't know what you're talking about. The Clinton administration pushed the envelope on lending, expecting banks to ignore time-honored best practices such as taking income into account. Again, I'm pretty sure you have no direct experience in this area, just scouring the internet for what journalist fits your preconceived view. You know, journalists who didn't see the bubble expanding either. Funny how few of them actually did.
Okay, scuttle off once again and find another article that agrees with you, written by yet another propagandist shill who never saw the inside of a bank.
Again, you don't know what you're talking about. The Clinton administration pushed the envelope on lending, expecting banks to ignore time-honored best practices such as taking income into account. Again, I'm pretty sure you have no direct experience in this area, just scouring the internet for what journalist fits your preconceived view. You know, journalists who didn't see the bubble expanding either. Funny how few of them actually did. Okay, scuttle off once again and find another article that agrees with you, written by yet another propagandist shill who never saw the inside of a bank.
Your persistent personal attacks carry no weight at all. Neither do the errors of your ahistorical rants and allegations. These serve only to underscore the weakness of your case. Meanwhile, neither CRA nor any other law, rule, policy, or court decision required any lender to extend credit to any borrower who was not fully qualified for it.
Your persistent personal attacks carry no weight at all. Neither do the errors of your ahistorical rants and allegations. These serve only to underscore the weakness of your case. Meanwhile, neither CRA nor any other law, rule, policy, or court decision required any lender to extend credit to any borrower who was not fully qualified for it.
In other words, you've got nothing. No experience in the industry, no experience in government. Just the ability to ignore facts that don't fit your tidy little narrative. I have thirty years experience in the business and you are just another keyboard warrior.
In other words lets impoverish everyone because businesses of all sizes wouldn't exist without the banking system we have. Basically becomes the guy with the land to farm to feed himself backed up with some really big guns wins. Yep, great idea.
I think yu misses my point. Perhaps I didn't make it clearly enough.
There are now, and there were then, plenty of banks who had not bet the farm on illicit Mortgage Backs and Derivatives trying to hit home runs. There are plenty of banks with capital, systems and personnel to provide for the needs of existing, and new businesses. The Paulson argument, which I believe to be false, was that the sun would not come p tomorrow if we didn't bail out the large, money center banks, to which Goldman had sold massive credit insurance. When those banks went under, so would Goldman, and being Hanks Firm, he wasn't about to let that happen.
I can't comment on the guy with the farm and the guns. He may be an important citizen, but his gun is useless against broader society, and one guy can't possibly grow enough to feed a thousand people, let alone 300,000,000.
Had the money that we put into zombie banks been used to fund existing, high quality banks, of which there are many with comparable facilities to any of the money center banks at the time, we would have eliminated the scourge that has dragged on the economy for a decade and been able to resume high quality growth more quickly, with less risk, and greater results.
In simple terms, you grow a lot more fruit by fertilizing healthy plants than you do by trying to revive plants which are dead.
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