Re: derivatives and credit default swaps
Wasn't trying to aim at you JRS. My comment was meant as a jab on the Gov. Seems everything they discuss gets screwed up or kicked down the road. If I offended you in any way I apologize.
krafty, what a short memory
If you would remember it WAS the Gov't that dictated that loans would be made to individuals without adequate finances to repay house loans. Barney Franks and the other outlaws on the committees that were the oversight committees, insisted that every person in the US was entitled to own his own home. It was this glut of home loans that pressured the housing market. When the honeymoon low interest rates reset to market values many realized they couldn't afford the houses they were sitting in. When they walked out of the house and quit repaying the loans, we had a housing crisis.
Re: derivatives and credit default swaps
Just my gut feeling, I guess. To many changes ahead in the next year. Helicopter bens retiring, President Obama has really taken a beating from the world over Syria, Petro dollar seems to be losing it's strength to move armies, Extremelly lackluster numbers on our economy. And then it is fall. Stock market just seems to have a history this time of year. I also think that with Debt cieling talks looming we have some folks who are gonna try to "pull back the curtain" and see what really is going on. Farmers really seem to have a disconnect from how the rest of our country is doing.
Re: krafty, what a short memory
Do you know of any one bank that was forced to lend to one specific customer that was not credit worthy? Just one is all you need. What government required was that lenders could no longer redline districts. For example heavily racial profiled developments were denied loans in those specific districts. What the law did was insist that banks must lend to credit worthy clients within those districts.
People still had to qualify for the loans. Now a little history about loan origination. People were wanting their own home. They have heard all the crappola about home appreciation. Home prices only go up and never go down. Plus theirs huge advantage to deducting the home mortgage expense. So they apply a loan to see if they are qualified.
Of course the realtor is anxious to sell to earn commissions. Often they work with a loan originator that processes the applications to see if the qualify. Manuy times they "adjust" the details so the buyer does qualify. If they don't qualify the loan arranger has wasted his time. No commission noorigination fees, no property inspection. No borrowers insurance etc.
Then comes the bank in there for their involvement and they are not overly concerned about payback ability because they are going to bundle the loans and sell them in the financial markets. And they pressure ratings companies to insure theyget AAA ratings.
None of them care too much about repayment ability as long as they get a signature on the app. And all of that is a scam system to assure high profits at someone elses expense. The poor gullible home buyer is convinced he is credit worthy and will gain value on his home and will enjoy the tax benefits of being a home buyer. Amazingly, he is assured that a mortgage company would never loan him money that he could not repay. Thus he was betting on a win win situation with a confident lender that assured him he was credit worthy.
Thus the scam is complete with the home buyer and the security investors both being taken for suckers with the loan originators and the banks responsible for criminal activity.
It' simply amazing that this example of raw capitalism at its worst andpeople try to lay the blame on the unsuspecting buyers and the federal government. Fraudulent activity by bankers and they blame it n the government. yet when government tries to enact legislation to limit fraudulant activity they are roundly opposed by GOP legislators. They don't want not stinking regulations that will **bleep** the fraud in the bud. No they would much prefer that the inventment banks be ableto cheat everyone and not have to pay those pesky taxes on their loot!