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Mortgage Crisis Caused By Anti-Racist Activism

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Re: Mortgage Crisis Caused By Anti-Racist Activism

#21

Post by wanorris »

dissenter wrote: post #19
far33d wrote: 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? Reme…

> 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.

No it's not. It's owned by Rupert Murdoch (also the owner of Fox News), and it's considered a conservative paper. The Daily News is a more liberal paper. Wikipedia confirms this, though I'm sure you could look for more definitive sources if you want to surf around.

Frankly, I would fully expect the Post to try to scapegoat liberal activist groups.

> 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.

The author is certainly qualified. On the other hand, it's apparent from reading his piece that (rightly or wrongly), he's had this axe to grind about redlining that has left him out of the mainstream consensus for quite a long time. It could be that this makes him uniquely qualified to make an assessment that no one else needs to hear, or it could mean that he's a kook that no one with any sense listens to.

Personally, I'm certainly not qualified to say that the article is wrong, because it may be 100% correct. However, I would like to see more evidence than the word of a guy who's been arguing a minority position for 15+ years in a newspaper that is not known for its commitment to balance.

Re: Mortgage Crisis Caused By Anti-Racist Activism

#22

Post by bilbo0s »

yummyfajitas wrote: post #14
bilbo0s wrote: 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 su…

That is EXACTLY my point. This article would have me believe that writing bad loans caused the credit crisis.

As a former quant, I can tell you that my belief is that the practice of improperly securing bundled debt is the cause of the credit crisis. When everyone began to realize that their risk analysis was off, they discovered that they held bonds or other more exotic instruments that were improperly hedged. The entire world asked for the same CDS's at the same time. That's when EVERYONE knew the game was up.

BTW, if you are a quant, or if you know your finance, I would be happy to explain why I believe the collapse in the bond market is caused by the asymmetric nature of a lot of the hedging that was going on. Or rather the total lack of hedging, and by implication, proper risk management. CDS's, CDO's and indeed derivatives in general are going to have their problems, but that is BECAUSE of improper securitization practices. We have a USD500 trillion, yes I said TRILLION, house of cards out there because of rampant misuse of these instruments. The mortgage bond market is just the place where the problems cropped up first.

I would be happy to listen to your explanation of how bad loans were the cause, but you will have to have a good explanation for two things. Firstly, explain why the bundles containing these loans were improperly secured in the first place, given that the lenders, according to the article you are citing, freely admit that they knew these to be bad loans? Could it be fiduciary negligence? Secondly, why is there so much trouble in the Jumbo market, (mortgages higher than USD417000), where CRA is not an issue at all, if CRA is the problem they are making it out to be?

I stand by my belief that fiscal negligence, and by implication, a failure to exercise the proper fiduciary duty to the companies, lies behind the collapse of ALL of these enterprises. If you have evidence to the contrary, submit it.

Re: Mortgage Crisis Caused By Anti-Racist Activism

#23

Post by rms »

bilbo0s wrote: post #22
yummyfajitas wrote: post #14

Earlier quoted context omitted.

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 su…

That is EXACTLY my point. This article would have me believe that writing bad loans caused the credit crisis. As a former quant, I can tell you that my belief is that the practice of improperly securing bundled debt is the cause of the credit crisis. When everyone began to realize that their risk analysis was off, they discovered that they held bonds or other more exotic instruments that were improperly hedged. The e…

Do the owners of forecloses houses have to sell them? Could they hold them indefinitely as investments or even rent them? And why don't they do this?

Re: Mortgage Crisis Caused By Anti-Racist Activism

#24

Post by bilbo0s »

rms wrote: post #23
bilbo0s wrote: post #22

Earlier quoted context omitted.

That is EXACTLY my point. This article would have me believe that writing bad loans caused the credit crisis. As a former quant, I can tell you that my belief is that the practice of improperly securing bundled debt is the cause of the credit crisis. When everyone began to realize that their risk analysis was off, they discovered that they held bonds or other more exotic instruments that were improperly hedged. The e…

Do the owners of forecloses houses have to sell them? Could they hold them indefinitely as investments or even rent them? And why don't they do this?

The owner of a foreclosed house becomes the bank, or more precisely, whoever the bank sold the bond to. In answer to your question, yes they can hold it, but there are a lot of very complicated reasons not to. They involve liquidity ratios and the like. So selling makes since in a great many instances. In short, what a bank, or financial institution does with it will depend on their fiscal position. Or it SHOULD. This mess has shown us that they can behave irrationally.

Re: Mortgage Crisis Caused By Anti-Racist Activism

#25

Post by xlnt »

wanorris wrote: post #21
dissenter wrote: post #19

Earlier quoted context omitted.

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? Reme…

> 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. No it's not. It's owned by Rupert Murdoch (also the owner of Fox News), and it's considered a conservative paper. The Daily News is a more liberal paper. Wikipedia confirms this, though I'm sure you could look for more definitive sources if you want to surf around. Frankly,…

Who cares who's "qualified" to say what? Is there a part of the article you feel is mistaken, and if so which part and why?

Re: Mortgage Crisis Caused By Anti-Racist Activism

#26

Post by wanorris »

xlnt wrote: post #25
wanorris wrote: post #21

Earlier quoted context omitted.

> 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. No it's not. It's owned by Rupert Murdoch (also the owner of Fox News), and it's considered a conservative paper. The Daily News is a more liberal paper. Wikipedia confirms this, though I'm sure you could look for more definitive sources if you want to surf around. Frankly,…

Who cares who's "qualified" to say what? Is there a part of the article you feel is mistaken, and if so which part and why?

Well, for starters, the author's baseline claim that there was no factual basis for redlining, which he freely admits is the minority opinion in the matter.

More importantly, the claim that the government and the liberals hounded banks into offering subprime loans, and that it wasn't just the dollar signs in their eyes that made them do it.

These things may be true or may not, but I would like to see better evidence before I simply accept them as facts.

Re: Mortgage Crisis Caused By Anti-Racist Activism

#27

Post by dissenter »

wanorris wrote: post #21
dissenter wrote: post #19

Earlier quoted context omitted.

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? Reme…

> 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. No it's not. It's owned by Rupert Murdoch (also the owner of Fox News), and it's considered a conservative paper. The Daily News is a more liberal paper. Wikipedia confirms this, though I'm sure you could look for more definitive sources if you want to surf around. Frankly,…

> nypost ain't liberal

We would classify the the Village Voice as a very liberal paper, but send it to someone in Nebraska and they'll tell you it's pornography.

Political ideals may draw on universal principles, but the line of scrimmage is different in every district. Murdoch is a businessman first, and he likes to own news companies. He happens to prefer to play one side of the line of scrimmage. The combination means his mouthpieces say different things in different areas. In some areas they endorse Hillary Clinton for re-election to the senate...

I tried to sidestep this criticism, but I was wrong to even sound the terms. The point is that the NYPost doesn't usually run articles like this---otherwise I wouldn't have read it. This tidbit is so salacious it even got my attention.

> Wikipedia

Wikipedia indeed.

Re: Mortgage Crisis Caused By Anti-Racist Activism

#28

Post by wanorris »

dissenter wrote: post #27
wanorris wrote: post #21

Earlier quoted context omitted.

> 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. No it's not. It's owned by Rupert Murdoch (also the owner of Fox News), and it's considered a conservative paper. The Daily News is a more liberal paper. Wikipedia confirms this, though I'm sure you could look for more definitive sources if you want to surf around. Frankly,…

> nypost ain't liberal We would classify the the Village Voice as a very liberal paper, but send it to someone in Nebraska and they'll tell you it's pornography. Political ideals may draw on universal principles, but the line of scrimmage is different in every district. Murdoch is a businessman first, and he likes to own news companies. He happens to prefer to play one side of the line of scrimmage. The combination m…

> Wikipedia indeed.

If you're going to impeach what you believe to a a secondary source of questionable veracity, it might behoove you to use something other than baldfaced assertions yourself.

Re: Mortgage Crisis Caused By Anti-Racist Activism

#29

Post by yummyfajitas »

dissenter wrote: post #27
wanorris wrote: post #21

Earlier quoted context omitted.

> 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. No it's not. It's owned by Rupert Murdoch (also the owner of Fox News), and it's considered a conservative paper. The Daily News is a more liberal paper. Wikipedia confirms this, though I'm sure you could look for more definitive sources if you want to surf around. Frankly,…

> nypost ain't liberal We would classify the the Village Voice as a very liberal paper, but send it to someone in Nebraska and they'll tell you it's pornography. Political ideals may draw on universal principles, but the line of scrimmage is different in every district. Murdoch is a businessman first, and he likes to own news companies. He happens to prefer to play one side of the line of scrimmage. The combination m…

>He happens to prefer to play one side of the line of scrimmage.

Or at least prefers to play on the side he feels is an underserved market.

Most people want a news source that agrees with them. If a fact doesn't support your views, it must be a lie, right?

In the TV news market, this means that left wing types are split between CNN, CBS, NBC, etc. Murdoch figured this out, and right wing types all watch Fox.

Re: Mortgage Crisis Caused By Anti-Racist Activism

#30

Post by far33d »

pg wrote: post #18
far33d wrote: 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?

This article uses a classic diversion tactic - focus on a singular issue, which may have contributed, and attribute all of a complex issue to the single issue that fits the agenda.

No mention of how lending agencies, given incentives to close as many mortgages as possible, had no incentive to make sure those lenders could actually pay. The article gives no mention to how the Fed's lax monetary policy dropped interest rates and created a frenzy in housing that blocked a lot of people out unless they used non-traditional instruments.

The author doesn't say that the "anti-racist" policies are one factor (which may be true) but that these policies are the direct cause. As someone who purchased a home two years ago, I became personally aware of how low short-term interest rates combined with a housing frenzy that drove prices up over 20% a year can easily push a lot of people to get low-interest ARM mortgages instead of more stable 30yr mortgages.

I just think this article takes on a straw man because it suits an anti affirmative action agenda.

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