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I never claimed they did combine commercial and investment banking. The significance is important because as investment banks they are not covered by the government affordable housing mandates.
What is your point with the above statement?
Just what I said. They all failed and they didn't combine commercial with investment banking either. Mainly the partial repeal of Glass- Steagal had nothing to do with it.
Quote:
Originally Posted by WilliamSmyth
The largest buyers of subprime by far, not even close, were banks not covered by the CRA.
This is incorrect and I do not know why it is repeated.
"The Act mandates that all banking institutions that receive Federal Deposit Insurance Corporation (FDIC) insurance be evaluated by Federal banking agencies to determine if the bank offers credit (in a manner consistent with safe and sound operation as per Section 802(b) and Section 804(1)) in all communities in which they are chartered to do business."
Which banks do NOT have FDIC insurance?
btw Goldman Sachs is FDIC insured.
Quote:
Originally Posted by WilliamSmyth
No threats were required for investment banks to buy subprime because it was extremely profitable for them to do so. Think about it.
I did and I showed proof in the very same post you replied to.
"But as banks expanded their deposit bases and other businesses, they often found that they were at risk of regulators discovering they had fallen behind in making CRA loans.
One way of addressing this problem was buying the loans in the secondary market. Mortgage companies like Countrywide began to serve this entirely artificial demand for CRA loans. Countrywide marketed its loans directly to banks as a way for them to meet CRA obligations."
"Regulators threatened that if the mortgage companies didn't step up to the plate by relaxing lending standards they would be brought under the CRA umbrella and required to do so.
Clinton administration pressuring nonbank lenders to make more loans to poor minorities or they'd seek to extend CRA regulations to all mortgage makers."
Quote:
Originally Posted by WilliamSmyth
If the the government came to you and said to you that must engage in this legal activity where you personally are making millions of dollars a year your response would be what? Oh, how horrible I must make a couple of million.
Like how I pointed out all the money paid to Jamie Gorelick for bypassing the free market?
"Gorelick, who left the Clinton Justice Department in 1997 to work for Fannie Mae CEO Franklin Raines, was paid $26,466,834 in salary, bonuses, performance pay and stock options from 1998 to 2003, according to the Report of the Special Examination of Fannie Mae (2006), conducted by the Office of Federal Housing Enterprise Oversight."
"Just by way of reference, in 2002, 21 senior Fannie Mae executives received over $1 million each.
So you agree it wasn't the free market as government coerced lenders. Thank you for admitting that.
Crony capitalism strikes again.
Just what I said. They all failed and they didn't combine commercial with investment banking either. Mainly the partial repeal of Glass- Steagal had nothing to do with it.
This is incorrect and I do not know why it is repeated.
"The Act mandates that all banking institutions that receive Federal Deposit Insurance Corporation (FDIC) insurance be evaluated by Federal banking agencies to determine if the bank offers credit (in a manner consistent with safe and sound operation as per Section 802(b) and Section 804(1)) in all communities in which they are chartered to do business."
Which banks do NOT have FDIC insurance?
btw Goldman Sachs is FDIC insured.
Are you aware that Goldman Sachs changed their organization in Sept 2008?
https://dealbook.nytimes.com/2008/09/21/goldman-morgan-to-become-bank-holding-companies/
Goldman Sachs and Morgan Stanley, the last two independent investment banks, will become bank holding companies, the Federal Reserve said Sunday night, a move that will fundamentally alter the landscape of Wall Street. The move alters one of the models of modern Wall Street, the independent investment bank, soon after the federal government unveiled the biggest market intervention since the New Deal. It heralds new regulations and supervision of previously lightly regulated investment banks, as well as an end to the outsize paychecks that helped shape the image of the chest-thumping Wall Street banker.
FDIC applies to commercial deposit taking institutions and not investment banks.
Since 2008 there are no free major free standing investment banks. The
Quote:
Originally Posted by Loveshiscountry
I did and I showed proof in the very same post you replied to.
"But as banks expanded their deposit bases and other businesses, they often found that they were at risk of regulators discovering they had fallen behind in making CRA loans.
One way of addressing this problem was buying the loans in the secondary market. Mortgage companies like Countrywide began to serve this entirely artificial demand for CRA loans. Countrywide marketed its loans directly to banks as a way for them to meet CRA obligations."
"Regulators threatened that if the mortgage companies didn't step up to the plate by relaxing lending standards they would be brought under the CRA umbrella and required to do so.
Clinton administration pressuring nonbank lenders to make more loans to poor minorities or they'd seek to extend CRA regulations to all mortgage makers."
Like how I pointed out all the money paid to Jamie Gorelick for bypassing the free market?
"Gorelick, who left the Clinton Justice Department in 1997 to work for Fannie Mae CEO Franklin Raines, was paid $26,466,834 in salary, bonuses, performance pay and stock options from 1998 to 2003, according to the Report of the Special Examination of Fannie Mae (2006), conducted by the Office of Federal Housing Enterprise Oversight."
"Just by way of reference, in 2002, 21 senior Fannie Mae executives received over $1 million each.
So you agree it wasn't the free market as government coerced lenders. Thank you for admitting that.
Crony capitalism strikes again.
Have you ever bothered to check out the bonuses and salaries that are earned by investment bankers, workers at credit rating agencies, AIG financial products division or mortgage originators. It dwarfs the bonus being paid at the GSEs.
The people involved in securitizing subprime mortgages were making millions a year. The vast majority of the subprime market was non-GSE and were not covered by the CRA or any other government housing mandates.
BTW this wasn't a US only phenomenon, financial institutions around the world believed they had discovered a way to take the risk out of investing in subprime mortgages and other assets.
Goldman Bonuses Will Break Record -- Analysts - Business Insider
Based on analysts' earnings forecasts for 2009, Goldman Sachs Group Inc. is on track to pay out as much as $20 billion this year, or about $700,000 per employee. That would be nearly double the firm's $363,000 average last year, and slightly higher than the $661,000 for the average Goldman employee in fiscal 2007, according to analyst estimates reviewed by The Wall Street Journal.
https://www.wsj.com/articles/SB123707854113331281
American International Group Inc. will pay $450 million in bonuses to employees in its financial products unit. That division was at the heart of AIG's collapse last fall, which compelled the U.S. government to provide $173.3 billion in aid to keep it running.
Are you aware that Goldman Sachs changed their organization in Sept 2008?
https://dealbook.nytimes.com/2008/09/21/goldman-morgan-to-become-bank-holding-companies/
Goldman Sachs and Morgan Stanley, the last two independent investment banks, will become bank holding companies, the Federal Reserve said Sunday night, a move that will fundamentally alter the landscape of Wall Street. The move alters one of the models of modern Wall Street, the independent investment bank, soon after the federal government unveiled the biggest market intervention since the New Deal. It heralds new regulations and supervision of previously lightly regulated investment banks, as well as an end to the outsize paychecks that helped shape the image of the chest-thumping Wall Street banker.
FDIC applies to commercial deposit taking institutions and not investment banks.
Since 2008 there are no free major free standing investment banks. The
Sept 2008 we already had the crash so what you posted was after the fact.
Quote:
Originally Posted by WilliamSmyth
Have you ever bothered to check out the bonuses and salaries that are earned by investment bankers, workers at credit rating agencies, AIG financial products division or mortgage originators. It dwarfs the bonus being paid at the GSEs.
The people involved in securitizing subprime mortgages were making millions a year. The vast majority of the subprime market was non-GSE and were not covered by the CRA or any other government housing mandates.
BTW this wasn't a US only phenomenon, financial institutions around the world believed they had discovered a way to take the risk out of investing in subprime mortgages and other assets. Goldman Bonuses Will Break Record -- Analysts - Business Insider
Based on analysts' earnings forecasts for 2009, Goldman Sachs Group Inc. is on track to pay out as much as $20 billion this year, or about $700,000 per employee. That would be nearly double the firm's $363,000 average last year, and slightly higher than the $661,000 for the average Goldman employee in fiscal 2007, according to analyst estimates reviewed by The Wall Street Journal.
https://www.wsj.com/articles/SB123707854113331281
American International Group Inc. will pay $450 million in bonuses to employees in its financial products unit. That division was at the heart of AIG's collapse last fall, which compelled the U.S. government to provide $173.3 billion in aid to keep it running.
Coercion is coercion and crony capitalism hurts the economy.
Bailouts paid bonuses for failing. The bailouts rewarded failure.
When one gets away from the free market, bad things happen.
A good example of what was occurring everywhere. Sherry Hunt was a VP at Citigroup responsible for reviewing mortgages from outside lenders. She red flagged the mortgages phony tax forms, phony appraisals and missing signatures but her bosses ignored her findings. She was a whistleblower and Citigroup was fined $150B for their misdeeds and she was awarded $31M.
Their actions had nothing to do with government regulation, it was greed for subprime mortgages.
Quote:
Hunt’s team was responsible for protecting Citigroup from fraud and bad investments. She and her colleagues inspected loans Citi wanted to buy from outside brokers and lenders to see whether they met the bank’s standards. The mortgages had to have properly signed paperwork, verifiable borrower income and realistic appraisals.
Citi would vouch for the quality of these loans when it sold them to investors or approved them for government mortgage insurance.
Investor demand was so strong for mortgages packaged into securities that Citigroup couldn’t process them fast enough. The Citi stamp of approval told investors that the bank would stand behind the mortgages if borrowers quit paying
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