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Mortgage Crisis Caused By Anti-Racist Activism

nypost.com

11–20 of 31 posts

Re: Mortgage Crisis Caused By Anti-Racist Activism

#11
post #3

I swear that I remember a quote from Greenspan saying that low interest rates would cause a housing bubble but I can't find it anymore. Anyone have any idea what I am thinking of?

I don't know if this what you're looking for, as Greenspan was not prognosticating, but speaking in hindsight.

"Greenspan said in an interview with Austrian magazine Format that low interest rates in the past 15 years were to blame for the house price bubble, but that central banks were powerless when they tried to bring it under control."

http://www.reuters.com/article/ousiv/idUSL2146624120070921

Re: Mortgage Crisis Caused By Anti-Racist Activism

#13
Where does education and personal responsibility come into play? Just because one qualifies for a loan doesn't mean one should enter into a loan, no matter what the means of qualification. It doesn't really matter if one qualifies by some government mandate or by the lender's willingness to accept more risk, responsibility still lies with the borrower to honestly analyze whether or not they will be able to make good. In my mind, the real failure lies with our nation's inability to educate it's citizens on how to manage their own finances effectively.

Re: Mortgage Crisis Caused By Anti-Racist Activism

#14
post #8

I have officially heard it all now. I knew that a lot of the 'handlers' of corporate bigwigs would have them out angling for a defense at the trials that are looking increasingly likely, but this one just reeks of desperation. The current mortgage crisis was fueled by a myriad of reasons, but believe me, the idea that billionaires were sitting around thinking about ways to get money into the hands of poor black guys…

The article doesn't claim that billionaires were "sitting around thinking about ways to get money into the hands of poor black guys was hardly one of them."

It claims that changes to the law, promoted by ACORN, made it legal to write bad loans.

A quick look at Wikipedia suggests that this might be the case:

>The [1995] revisions [to the Community Reinvestment Act] allowed the securitization of CRA loans containing subprime mortgages. The first public securitization of CRA loans started in 1997

http://en.wikipedia.org/wiki/Community_Reinvestment_Act#Chan...

NY Post or not, it appears correct. I also recommend reading this article (for a different reason):

http://www.paulgraham.com/disagree.html

Re: Mortgage Crisis Caused By Anti-Racist Activism

#19
post #12

i won't be using the NYPost for economic analysis, thank you very much.

OK, fair point, the NYPost is not the gold standard in economic analysis.

On the other hand

1. The author, Stan Liebowitz, is "the Ashbel Smith professor of Economics in the Business School at the University of Texas at Dallas"---not exactly unqualified to speak on the subject.

2. The New York Post may run a lot of salacious pieces, but how often does the NYPost run an overtly discriminatory and salacious piece?

Remember, this is the paper your New York workers read on the train on the way to work. That's about as mixed a bag as you can get. The New York Post, like every other New York paper, does its damnedest to appeal to the widest possible spectrum. The Post is a liberal paper. You can call it conservative, but only when you're comparing it to the NY Times. This makes the article interesting, and it should at least give you pause.

It's easy to take a snotty attitude against reading something like the Post, but the article, which admittedly isn't that great, raises an interesting point. In America we purposefully overlook a lot of things in the name of equality. In underwriting you don't want overlook anything.

The financial analysts who failed to analyze this situation are responsible for the crisis. So are the former home owners who defaulted on their loans. And the people who issued them those loans. But when good analysis is restricted by federal law, and bad analysis is incentivized, how much blame can you place on analysts before next placing it on legislation? Regardless of how much blame you assign to the legislation, you must now multiply that manyfold. This is a little thing that has made a big difference.

The point is that we have to ask ourselves what level of abstraction we are willing to force onto the notion of a person. Are we willing to turn so much of a blind eye that it throws us into economic recession?

This recession is likely to be mild, but deep recessions are a time of great uncertainty. You don't have to read very far back in history to learn that people tend to stop overlooking things when their pocketbooks are empty. Equality, in other words, is a luxury item, and like many of the things we enjoy in America, it's contingent on our economy not exploding.

Re: Mortgage Crisis Caused By Anti-Racist Activism

#20
post #18
post #12

i won't be using the NYPost for economic analysis, thank you very much.

I'm not saying this article is right, but can you point to something specific it says that you feel is incorrect?

Ouch. I guess this was one of those "intellectual" DH0's. I will put together a real response.
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