All Forums > General Discussion > Non-Sports > Obama: Worst President Ever?
11/7/2013 10:15 AM

Didn't the economy crash, in part, because loans were given to people who had no means to pay them?   If so, I'm pretty sure that started under Clinton. 

11/7/2013 10:25 AM
Posted by MikeT23 on 11/7/2013 10:15:00 AM (view original):

Didn't the economy crash, in part, because loans were given to people who had no means to pay them?   If so, I'm pretty sure that started under Clinton. 

Pretty sure it was under regulated banks giving the loans. Not Clinton (or Bush).
11/7/2013 10:33 AM
Posted by bad_luck on 11/7/2013 10:26:00 AM (view original):
Posted by MikeT23 on 11/7/2013 10:15:00 AM (view original):

Didn't the economy crash, in part, because loans were given to people who had no means to pay them?   If so, I'm pretty sure that started under Clinton. 

Pretty sure it was under regulated banks giving the loans. Not Clinton (or Bush).
Are you familiar with the Community Reinvestment Act?    Rewritten by Clinton in the early/mid 90s to put pressure on banks to loan to low income individuals.

11/7/2013 10:40 AM
But, to be fair, I'm not saying that was the only problem.    Plenty of people making buckets of money during the dot.com era were buying Ferraris and 30m houses that went way beyond their means if there was a "correction".     Just wondering how many banks said "**** it.   Clinton says loan 150k to someone making 20k.  Why shouldn't we loan 30m to a guy bringing in 100k a week?"
11/7/2013 11:29 AM
Posted by MikeT23 on 11/7/2013 10:33:00 AM (view original):
Posted by bad_luck on 11/7/2013 10:26:00 AM (view original):
Posted by MikeT23 on 11/7/2013 10:15:00 AM (view original):

Didn't the economy crash, in part, because loans were given to people who had no means to pay them?   If so, I'm pretty sure that started under Clinton. 

Pretty sure it was under regulated banks giving the loans. Not Clinton (or Bush).
Are you familiar with the Community Reinvestment Act?    Rewritten by Clinton in the early/mid 90s to put pressure on banks to loan to low income individuals.

I am. But almost all subprime lenders weren't subject to CRA regulation (only banks were subject to the law, most subprime loans were made by other types of lenders). The bad loans weren't made because of government pressure. The bad loans were made because Wall Street really wanted the loans.
11/7/2013 11:29 AM
Posted by MikeT23 on 11/7/2013 10:40:00 AM (view original):
But, to be fair, I'm not saying that was the only problem.    Plenty of people making buckets of money during the dot.com era were buying Ferraris and 30m houses that went way beyond their means if there was a "correction".     Just wondering how many banks said "**** it.   Clinton says loan 150k to someone making 20k.  Why shouldn't we loan 30m to a guy bringing in 100k a week?"
I think zero banks used that reasoning.
11/7/2013 11:31 AM
You should read The Big Short.
11/7/2013 12:15 PM
Posted by bad_luck on 11/7/2013 11:29:00 AM (view original):
Posted by MikeT23 on 11/7/2013 10:40:00 AM (view original):
But, to be fair, I'm not saying that was the only problem.    Plenty of people making buckets of money during the dot.com era were buying Ferraris and 30m houses that went way beyond their means if there was a "correction".     Just wondering how many banks said "**** it.   Clinton says loan 150k to someone making 20k.  Why shouldn't we loan 30m to a guy bringing in 100k a week?"
I think zero banks used that reasoning.

Why not?  If the gov't will bail you out on defaults, isn't a big money loan more lucrative?

11/7/2013 12:19 PM
Posted by bad_luck on 11/7/2013 11:29:00 AM (view original):
Posted by MikeT23 on 11/7/2013 10:33:00 AM (view original):
Posted by bad_luck on 11/7/2013 10:26:00 AM (view original):
Posted by MikeT23 on 11/7/2013 10:15:00 AM (view original):

Didn't the economy crash, in part, because loans were given to people who had no means to pay them?   If so, I'm pretty sure that started under Clinton. 

Pretty sure it was under regulated banks giving the loans. Not Clinton (or Bush).
Are you familiar with the Community Reinvestment Act?    Rewritten by Clinton in the early/mid 90s to put pressure on banks to loan to low income individuals.

I am. But almost all subprime lenders weren't subject to CRA regulation (only banks were subject to the law, most subprime loans were made by other types of lenders). The bad loans weren't made because of government pressure. The bad loans were made because Wall Street really wanted the loans.
The bad loans were made because (a) the Clinton Administration encouraged that such loans be made, and (b) people were stupid enough to take out loans they couldn't possibly afford.

I may have mentioned this before, but I'll mention it again.  When my wife and I were shopping for our current house in 1996, we were "pre-approved" for a mortgage that was around $175k more than we felt confortable spending,  Had we been stupid and went with a much larger and more expensive house, there is around a 0% chance that we would have been able to afford to still be there.
11/7/2013 12:31 PM (edited)
Posted by tecwrg on 11/7/2013 12:19:00 PM (view original):
Posted by bad_luck on 11/7/2013 11:29:00 AM (view original):
Posted by MikeT23 on 11/7/2013 10:33:00 AM (view original):
Posted by bad_luck on 11/7/2013 10:26:00 AM (view original):
Posted by MikeT23 on 11/7/2013 10:15:00 AM (view original):

Didn't the economy crash, in part, because loans were given to people who had no means to pay them?   If so, I'm pretty sure that started under Clinton. 

Pretty sure it was under regulated banks giving the loans. Not Clinton (or Bush).
Are you familiar with the Community Reinvestment Act?    Rewritten by Clinton in the early/mid 90s to put pressure on banks to loan to low income individuals.

I am. But almost all subprime lenders weren't subject to CRA regulation (only banks were subject to the law, most subprime loans were made by other types of lenders). The bad loans weren't made because of government pressure. The bad loans were made because Wall Street really wanted the loans.
The bad loans were made because (a) the Clinton Administration encouraged that such loans be made, and (b) people were stupid enough to take out loans they couldn't possibly afford.

I may have mentioned this before, but I'll mention it again.  When my wife and I were shopping for our current house in 1996, we were "pre-approved" for a mortgage that was around $175k more than we felt confortable spending,  Had we been stupid and went with a much larger and more expensive house, there is around a 0% chance that we would have been able to afford to still be there.
Your a) is completely wrong.

Almost all subprime loans were made by companies not subject to CRA regulation. There was no law putting pressure on (or encouraging) them to make subprime loans.

Yes, people were stupid enough to take loans they couldn't afford. Most of those people were punished for their stupidity when they lost their home. But there was a huge Wall Street demand for loans and it was on the banks to underwrite the loans in a smart way. They failed to do so.

 
11/7/2013 12:35 PM
Will you ever admit that the Democratic party has any fault in any thing?  
11/7/2013 12:41 PM
Reid, Pelosi and Obama can strangle kittens on primetime TV, and BL would try to spin it in a positive light.
11/7/2013 12:43 PM
The economy crashed because of 'greed'. The fed, the banks, and those that signed for mortgages they could not afford are all equally guilty. Arguing over which party is at fault here is pointless.
11/7/2013 12:45 PM

Howard Dean is the only Dem that would do that.

11/7/2013 12:46 PM
Posted by moy23 on 11/7/2013 12:43:00 PM (view original):
The economy crashed because of 'greed'. The fed, the banks, and those that signed for mortgages they could not afford are all equally guilty. Arguing over which party is at fault here is pointless.
I wasn't really blaming anyone.   Just pointing out that Clinton opened some doors to bad loans that had been locked shut. 
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