When THEY Run Everything.
- Thread starter lonesomebob
- Start date
Well, I personally don`t have absolutely anything against Cyprus, Greece & co / individual people there, and i`m not rising up the WWIII but can`t take, without any reaction much more.
As a EU country, we pay now/soon their massive loans. They are already badly over indebtesnessed. Why? Simple as always; using too much money compared to income; needs more loan AND tight saving programs.
Feels bad; we try to keep our budgets in personal and national level in, some kind of, order.
Then Brussel tells us to pay hundred millions, or more to them, and we must quarantee loans too.
When we try to ask if can get our money back at some point, they are rioting becouse they don`t see any reason to drop their level of living.. Of course, why live poorer life when someone else is paying Your loans.
In shortly; if some countrys are using a lot of money for nothing but for higher level of life (lower taxes, higher paychecks etc.), EU:s solution is send more money and practically without any fear of pay it back.
Cyprus: condition for extra, big loan was small tax for bank accounts. 0% to under 20000 € accounts, over that; few persentage.
They have to show to EU they can save money, not just take a another new big money loan and use it as an income.
But NO, they said. And I say: open Your eyes! :furious: And maybe we have something already planned use for the our money, in here.
At the moment russians are running to Cyprus to lift their savings from local banks.
Wonder why they are keeping their, hmmm, "savings" in Cyprus, not in Russian Banks... :lipsrsealed:
Big, socialist governments with too much power. It is a global plague descending upon all of the free world. Its not your money, they decide how much of their money you get.
It's impressive that our country's citizens are being led like lambs to the slaughter by this administration with the EU examples right in front of us. 1st Greece, now Cyprus. Doubtful it will end there. Still, our govt feels the need to spend more and more of our money (all the while coddling a constituency with no or little skin in the game in order to secure their vote) and somehow they feel the US will be immune to these corrective forces. Either they're impressively naive or just feel they can kick the can down the street a little more. Damn scary...
Your veering towards virulent racism there by using the term "skin" when referring to anything the Regime is involved in, Buddy. ;~)
I think Cyprus needs to go down the line the Icelandics took. This world of bloated plurocrats and robber barons needs a good shake up.
Who is more guilty. The bank loaning someone money knowing they probably can't pay it back, or the person accepting that money knowing the same. Personally I think the bank as they are going in on a negative position with money that is not his own. The bankers and the politicians that allowed this to happen should all be held accountable the Icelandic way.
I wonder whether the EU was really thought out and set up properly. What we seam to have is the United States of Germany.
I can see where the EU has had a real benefit with the reduction of boarders for easier travel and trade, but when they start telling a country how to think and what to do I think that is going too far.
Who is more guilty. The bank loaning someone money knowing they probably can't pay it back, or the person accepting that money knowing the same. Personally I think the bank as they are going in on a negative position with money that is not his own. The bankers and the politicians that allowed this to happen should all be held accountable the Icelandic way.
I wonder whether the EU was really thought out and set up properly. What we seam to have is the United States of Germany.
I can see where the EU has had a real benefit with the reduction of boarders for easier travel and trade, but when they start telling a country how to think and what to do I think that is going too far.
Let's not forget that bankers were forced to make these loans, so that it would be "fair" for everyone.
Since you reside in N.Z., Tim, you may not be aware that, here in the U.S., the lefties running congress in 1977 passed a little masterpiece called the "CRA"..."Community Reinvestment Act"...wherein, as Bob pointed out, the banks were basically COMMANDED to make a home loan to anyone who could fog a mirror - or they'd have hell to pay. Well, they complied with unfettered zeal (because they KNEW Fannie and Freddie [Goggle them if not familiar] would take those bad loans off their hands). So, they created the "no down" home loans...the "interest only" loans...the "balloon payment" loans...the "variable interest" loans and on and on. The "qualifications " were FURTHER loosened in the early '90s during Clinton's 1st term - ALSO done by a lib run congress. The result, as you pointed out, Tim, was that people who K-N-E-W they could never pay off the loans they were taking out bought houses on speculation anyway figuring they could always sell their places "down the road" for a tidy profit because, obviously, home prices could only go UP. This resulted in a glut of unqualified buyers driving home prices ever upward until you-know-what finally hit the fan as a result of these 'spec' mortgages going into default...and the rest, as they say, is history.
Bottom line? CONGRESS is to blame. Seriously. IT made the law that the banks and the "buyers" took legal advantage of. ('Course, there was some illegal stuff going on too, but, I've bloviated long enough.)
(The above is an abbreviated accounting, but, it's the real nuts and bolts of the whole mess none the less.)
Pat
Supporter
Is answer to the first question, you do not have to be a U.S. citizen to get food stamps. You only need to be here legally or have someone in your household that is.
Here is a Q&A that should answer your questions:
10 myths and facts about SNAP/Food Stamp benefits and immigrants - MassLegalHelp
My point is that illegals can and do benefit from the program at taxpayer expense. In fact in certain situations they are advantaged over U.S. citizens and those here legally.
Everything else being being equal, a low-income household with one or more illegal aliens in it, is more likely to get Food Stamps than a household with similar income with all members being U.S. citizens or otherwise legally present.
Let me give you an example. Suppose two families are SNAP eligible, both have equal incomes, but the one with an illegal alien member seems to get a larger allotment.
You may wonder, how is that possible?
The Food Stamp program is income-tested; if the household has too much income, nobody in it gets any Food Stamps. Generally if the household of four's gross income is less than $29,064, for example, it is, all else being equal, eligible for Food Stamps. If the household size is smaller, the cut-off is lower, and vice-versa. (The calculation of exact the size of the monthly allotment is too complex to be discussed here without another nasty e-mail complaint about my long winded Paddock Posts.)
So how does the U.S. Department of Agriculture define "income" in this setting?
There's the rub. The rule in 46 of the 50 states is that income made by those here illegally is NOT counted in the means testing for the SNAP benefits. So (for instance) one of the members is illegally present in a household of four. Then the gross income of the household is reduced by a fourth (the illegals's wages) for Food Stamp eligibility purposes. So, if there are two households with actual gross incomes of, say, $36,000 a year, each with four members, and one consists of nothing but legal residents, and one has one illegal plus three legals, this is how the eligibility would work out:
Four legals, with income of $36,000 a year – NOT eligible for Food Stamps.
Three legals + one illegal with household "income" calculated at $27,000 a year - BINGO – eligible for Food Stamps.
In addition to the question of eligibility vs. non-eligibility for Food Stamps of these mixed households, there is the question of the size of the monthly grant. According to an article in "The Kansas Reporter", one of the executives of the Kansas Department of Social and Rehabilitation Services (SRS) was quoted as saying:
"...As a result an ineligible household of four, on average, could bring in $908 more in income and qualify for the same food stamp benefits".
-Michelle Schroeder, SRS director of public policy
Now Jim, do you really think that everyone that benefits from the SNAP program is in the country legally?
Jeff Young
GT40s Supporter
Good lord that is about as stupid as it comes. I know it is BeckLimbaughHannity gospel but it is just wrong.
The CRA simply prevented "red lining" meaning banks couldn't deny loans based on racial/low income neighborhood border lines.
NO ONE forced banks to make any loans. NO ONE. Instead, what happened was your wonderful unrestricted market created a ton of home loan related products (you listed them above, BANKS created those) to make money of the "ever upward" housing market.
The irony of all this is that at its core, what you free marketistas at all costs people are arguing is that a LACK of regulation caused this mess. Partially true. More regulation would have helped, but the core problem was ......ding ding ding ding....GREED and folks trying to make as much money out of each mortgage as they could.
Odd. I figured Mr. Craik would tbe the 1st one to deny, deny, deny reality...not to mention launch the personal insults.
"The CRA simply prevented "red lining" meaning banks COULDN'T deny loans (HELLLLLLOOOOO?) based on racial/low income neighborhood border lines."
Exactly. These are part of the "fog-a-mirror" borrowers to which I referred. "Red Line" areas were red lined because the residents therein typically had no regular employment or decent credit histories..nor could they come up with a "standard" down pmt on a home. The CRA in fact did force banks to 'find a way' to make loans to people within those areas (as well as others) AS YOU YOURSELF JUST STATED. That's a F-A-C-T. Look it up.
"The CRA simply prevented "red lining" meaning banks COULDN'T deny loans (HELLLLLLOOOOO?) based on racial/low income neighborhood border lines."
Exactly. These are part of the "fog-a-mirror" borrowers to which I referred. "Red Line" areas were red lined because the residents therein typically had no regular employment or decent credit histories..nor could they come up with a "standard" down pmt on a home. The CRA in fact did force banks to 'find a way' to make loans to people within those areas (as well as others) AS YOU YOURSELF JUST STATED. That's a F-A-C-T. Look it up.
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Rep. Barney Frank (D-Mass.), the ranking Democrat on the House Financial Services Committee, said the administration's position is driven by concerns about the financial safety and soundness of the companies "to the exclusion of concern about housing." 2003
Discussion | Interactive Investor
That's right, Bush kept warning about the dangers of these loans, and Frank accused him of being more concerned about the health of the loan institutions instead of dead beat borrowers. And yet, ITS ALL BUSH'S FAULT, isn't it.
Discussion | Interactive Investor
That's right, Bush kept warning about the dangers of these loans, and Frank accused him of being more concerned about the health of the loan institutions instead of dead beat borrowers. And yet, ITS ALL BUSH'S FAULT, isn't it.
Jeff Young
GT40s Supporter
Wrong Larry. i've not only looked it up, I've litigated the issue. Redlining is the process of walling off areas by income level or race, and then not lending to anyone in those areas REGARDLESS of actual ability to repay.
You can start with the 2nd grade version of the definition here.
Redlining - Wikipedia, the free encyclopedia
You can start with the 2nd grade version of the definition here.
Redlining - Wikipedia, the free encyclopedia
Pat
Supporter
Wrong Jeff, I think you might benefit with a visit with the compliance officer of your local bank. Or I would refer you to the Fox News of the left, the "Villiage Voice" who would have an opinion other than your own. It has the catchy title, Andrew Cuomo and Fannie and Freddie How the youngest Housing and Urban Development secretary in history gave birth to the mortgage crisis
New York Andrew Cuomo and Fannie and Freddie - Village Voice
For the record, CRA Development Goals and related enforcement audits or the CRA evaluation of an institution's "Community Development Activity".
Banks took on risky loans or faced the wrath of CRA compliance agreements, demonstrations from SEIU, Rainbow Coalition, The National Community Reinvestment Coalition and my good friends at ACORN. In addition to providing these nonprofits with mortgage money to disburse, CRA allows those organizations to collect a fee from the banks for their services in marketing the loans. The Senate Banking Committee has estimated that, by the year 2000, as a result of CRA, $9.5 billion so far had gone to pay for services and salaries of the nonprofit groups involved.
Failure to meet with CRA "Development Activity" standards results in a CRA agreement, which is a compliance mandate that they increase their targeted lending or other activities in a designated community. The average agreement lasts FIVE years. The Federal Reserve studied a sample of these agreements and found they included the following: (Most agreements contained multiple pledges).
MONETARY PLEDGES (so much for no one made anybody do anything):
Mortgage-related 37.3%
Small business-related 68.6%
Minority-, women-owned businesses 23.5%
Community development 66.7%
Other 49.0%
SERVICE-RELATED PLEDGES
Mortgage technical assistance and counseling 45.1%
Small business technical assistance 17.6%
Branch-related 39.2%
Further, the market was not "unrestricted" Fannie and Freddie executives were paid massive bonus payments based on volume not quality. I wrote a lengthy piece on this a while back that you may wish to pull out of your treasured Veek scrapbook.
But don't take my word for it. The National Bureau of Economic Research that says, quite bluntly. that the CRA played a major role in the housing crash.
Authors Sumit Agarwal, Efraim Benmelech, Nittai Bergman, Amit Seru answer the title's question, "Did the Community Reinvestment Act (CRA) Lead to Risky Lending?," with the clear, "Yes, it did. ... We find that adherence to the act led to riskier lending by banks."
The full abstract reads:
Yes we can turned into yes, it did. THe authors used exogenous variation in banks’ incentives to conform to the standards of the Community Reinvestment Act (CRA) around regulatory exam dates to trace out the effect of the CRA on lending activity. Their empirical strategy compares lending behavior of banks undergoing CRA exams within a given census tract in a given month to the behavior of banks operating in the same census tract-month that do not face these exams. We find that adherence to the act led to riskier lending by banks: in the six quarters surrounding the CRA exams lending is elevated on average by about 5 percent every quarter and loans in these quarters default by about 15 percent more often. These patterns are accentuated in CRA-eligible census tracts and are concentrated among large banks. The effects are strongest during the time period when the market for private securitization was booming.
Investors Business Daily does a very nice job of summarizing the nature of the pressure brought on lenders (that's IBD's most excellent graphic, above):
"We want your CRA loans because they help us meet our housing goals," Fannie Vice Chair Jamie Gorelick* beseeched lenders gathered at a banking conference in 2000, just after HUD hiked the mortgage giant's affordable housing quotas to 50% and pressed it to buy more CRA-eligible loans to help meet those new targets. "We will buy them from your portfolios or package them into securities."
She described "CRA-friendly products" as mortgages with less than "3% down" and "flexible underwriting."
From 2001-2007, Fannie and Freddie bought roughly half of all CRA home loans, most carrying subprime features with little regard to their credit quality.
Note that the authors of the study caution that their work here may actually understate the impact of the CRA. How? Because the study assumes that the major impact of CRA took place when banks were undergoing examination regarding their compliance with CRA goals. If banks found it difficult to shift gears in preparation for such exams, they may have altered their overall behavior to satisfy politicians and regulators. Or, as the authors put it in their conclusion, "If adjustment costs in lending behavior are large and banks can’t easily tilt their loan portfolio toward greater CRA compliance, the full impact of the CRA is potentially much greater than that estimated by the change in lending behavior around CRA exams."
The housing meltdown and the Great Recession. Something else for which you can thank the feds. Don't worry student loans are on the horizon.
*By the way, if the name Jamie Gorelick rings a bell, even though she had no previous training nor experience in finance, Ms Gorelick was appointed Vice Chairman of Federal National Mortgage Association (Fannie Mae) from 1997 to 2003. She served alongside former Clinton Administration official Franklin Raines (who served as White House budget director under President Bill Clinton). During that period, Fannie Mae developed a $10 billion accounting scandal. For her services, Ms Gorlick from 1998 to 2002 received a total of $26,466,834.00 in income.
Well, sir, Johnny Cochran "litigated" (so to speak) the 'issue' of O.J. Simpson too - and his twisting of the evidence to fit his desired view in that matter was just as wrong...'same was true regarding the jurors' view. But then, I suppose you'd likewise insist that the facts & evidence in that case warranted a "not guilty" verdict as well?
In the same vein, all these people chose to be wrong about Fannie & Freddie in light of all the facts in that matter:
[ame="http://www.youtube.com/watch?v=IyqYY72PeRM"]Democrats in their own words Covering up Fannie Mae, Freddie Mac scandal - YouTube[/ame]
More personal insults? Please...
You might reread Veek's post above...particularly this sentence: "The National Bureau of Economic Research that says, quite bluntly, that the CRA played a major role in the housing crash."
Does the NBER maybe need to read the "2nd grade version" of the definition of red lining too?
'Nuffa' this. 'Readers can decide for themselves who's right here.
Jeff Young
GT40s Supporter
The readers certainly can. But the experts already have. And you still have the basic definition of redlining wrong.
But Experts Agree: The CRA Did Not Cause The Financial Crisis
Financial Crisis Inquiry Commission: "The CRA Was Not A Significant Factor In Subprime Lending Or The Crisis." In its final report, submitted in January 2011, the Financial Crisis Inquiry Commission concluded:
The Commission concludes the CRA was not a significant factor in subprime lending or the crisis. Many subprime lenders were not subject to the CRA. Research indicates only 6% of the high cost loans - a proxy for subprime loans - had any connection to the law. Loans made by CRA-regulated lenders in the neighborhoods in which they were required to lend were half as likely to default as similar loans made in the same neighborhoods by independent mortgage originators not subject to the law. [The Financial Crisis Inquiry Report, January 2011]
Federal Reserve: "We Find Little Evidence That Either the CRA Or The GSE [Government-Sponsored Enterprise] goals played a significant role in the subprime crisis." In an August 3 report, Federal Reserve economists Robert Avery and Kenneth Brevoort concluded:
We find little evidence that either the CRA or the GSE goals played a significant role in the subprime crisis. Our lender tests indicate that areas disproportionately served by lenders covered by the CRA experienced lower delinquency rates and less risky lending. Similarly, the threshold tests show no evidence that either program had a significantly negative effect on outcomes. [Federal Reserve, 8/3/11]
Krugman: The CRA "Was Irrelevant To The Subprime Boom." In a June 3, 2010, post on his New York Times blog, Nobel Prize-winning economist Paul Krugman pointed out, "The Community Reinvestment Act of 1977 was irrelevant to the subprime boom, which was overwhelmingly driven by loan originators not subject to the Act." [The New York Times, 6/3/10]
Bernanke: The CRA Was Not "At The Root Of, Or Otherwise Contributed In Any Substantive Way To, The Current Mortgage Difficulties." In a November 25, 2008, letter, Federal Reserve chairman Ben Bernanke stated: "Our own experience with CRA over more than 30 years and recent analysis of available data, including data on subprime loan performance, runs counter to the charge that CRA was at the root of, or otherwise contributed in any substantive way to, the current mortgage difficulties." [Federal Reserve, 11/25/08]
Most Subprime Mortgages Not Issued By Institutions Under CRA. In a paper published on the website of the Federal Reserve Bank of San Francisco, Michigan law professor Michael Barr stated that as of 2005, "Only 25 percent of subprime loans were made by banks and thrifts, and the Federal Reserve reports that only six percent of subprime loans were CRA-eligible." ["Community Reinvestment Emerging from the Housing Crisis," Michael S. Barr, accessed 10/11/11]
SF Reserve Bank's Yellen: "tudies Have Shown That The CRA Has Increased The Volume Of Responsible Lending To Low- And Moderate-Income Households." Janet Yellen, president and CEO of the Federal Reserve Bank of San Francisco, in a March 2008 speech criticized efforts to blame CRA lending for weaknesses in the mortgage market, stating:
There has been a tendency to conflate the current problems in the subprime market with CRA-motivated lending, or with lending to low-income families in general. I believe it is very important to make a distinction between the two. Most of the loans made by depository institutions examined under the CRA have not been higher-priced loans, and studies have shown that the CRA has increased the volume of responsible lending to low- and moderate-income households. We should not view the current foreclosure trends as justification to abandon the goal of expanding access to credit among low-income households, since access to credit, and the subsequent ability to buy a home, remains one of the most important mechanisms we have to help low-income families build wealth over the long term. [Federal Reserve Bank of San Francisco, 3/31/08]
Slate's Gross: "The Notion That The Community Reinvestment Act Is Somehow Responsible For Poor Lending Decisions Is Absurd." In an October 7, 2008, Slate article, Daniel Gross, a business columnist for Newsweek and author of Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation, wrote that "the notion that the Community Reinvestment Act is somehow responsible for poor lending decisions is absurd" and added, "[L]ending money to poor people and minorities isn't inherently risky. There's plenty of evidence that in fact it's not that risky at all." Gross further explained, "On the other hand, lending money recklessly to obscenely rich white guys ... can be really risky. In fact, it's even more risky, since they have a lot more borrowing capacity." [Slate, 10/7/08]
But Experts Agree: The CRA Did Not Cause The Financial Crisis
Financial Crisis Inquiry Commission: "The CRA Was Not A Significant Factor In Subprime Lending Or The Crisis." In its final report, submitted in January 2011, the Financial Crisis Inquiry Commission concluded:
The Commission concludes the CRA was not a significant factor in subprime lending or the crisis. Many subprime lenders were not subject to the CRA. Research indicates only 6% of the high cost loans - a proxy for subprime loans - had any connection to the law. Loans made by CRA-regulated lenders in the neighborhoods in which they were required to lend were half as likely to default as similar loans made in the same neighborhoods by independent mortgage originators not subject to the law. [The Financial Crisis Inquiry Report, January 2011]
Federal Reserve: "We Find Little Evidence That Either the CRA Or The GSE [Government-Sponsored Enterprise] goals played a significant role in the subprime crisis." In an August 3 report, Federal Reserve economists Robert Avery and Kenneth Brevoort concluded:
We find little evidence that either the CRA or the GSE goals played a significant role in the subprime crisis. Our lender tests indicate that areas disproportionately served by lenders covered by the CRA experienced lower delinquency rates and less risky lending. Similarly, the threshold tests show no evidence that either program had a significantly negative effect on outcomes. [Federal Reserve, 8/3/11]
Krugman: The CRA "Was Irrelevant To The Subprime Boom." In a June 3, 2010, post on his New York Times blog, Nobel Prize-winning economist Paul Krugman pointed out, "The Community Reinvestment Act of 1977 was irrelevant to the subprime boom, which was overwhelmingly driven by loan originators not subject to the Act." [The New York Times, 6/3/10]
Bernanke: The CRA Was Not "At The Root Of, Or Otherwise Contributed In Any Substantive Way To, The Current Mortgage Difficulties." In a November 25, 2008, letter, Federal Reserve chairman Ben Bernanke stated: "Our own experience with CRA over more than 30 years and recent analysis of available data, including data on subprime loan performance, runs counter to the charge that CRA was at the root of, or otherwise contributed in any substantive way to, the current mortgage difficulties." [Federal Reserve, 11/25/08]
Most Subprime Mortgages Not Issued By Institutions Under CRA. In a paper published on the website of the Federal Reserve Bank of San Francisco, Michigan law professor Michael Barr stated that as of 2005, "Only 25 percent of subprime loans were made by banks and thrifts, and the Federal Reserve reports that only six percent of subprime loans were CRA-eligible." ["Community Reinvestment Emerging from the Housing Crisis," Michael S. Barr, accessed 10/11/11]
SF Reserve Bank's Yellen: "
There has been a tendency to conflate the current problems in the subprime market with CRA-motivated lending, or with lending to low-income families in general. I believe it is very important to make a distinction between the two. Most of the loans made by depository institutions examined under the CRA have not been higher-priced loans, and studies have shown that the CRA has increased the volume of responsible lending to low- and moderate-income households. We should not view the current foreclosure trends as justification to abandon the goal of expanding access to credit among low-income households, since access to credit, and the subsequent ability to buy a home, remains one of the most important mechanisms we have to help low-income families build wealth over the long term. [Federal Reserve Bank of San Francisco, 3/31/08]
Slate's Gross: "The Notion That The Community Reinvestment Act Is Somehow Responsible For Poor Lending Decisions Is Absurd." In an October 7, 2008, Slate article, Daniel Gross, a business columnist for Newsweek and author of Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation, wrote that "the notion that the Community Reinvestment Act is somehow responsible for poor lending decisions is absurd" and added, "[L]ending money to poor people and minorities isn't inherently risky. There's plenty of evidence that in fact it's not that risky at all." Gross further explained, "On the other hand, lending money recklessly to obscenely rich white guys ... can be really risky. In fact, it's even more risky, since they have a lot more borrowing capacity." [Slate, 10/7/08]
Back on message, "Deposits above 100,000 euros in both banks, which are not guaranteed under EU law, will be frozen and used to resolve Laiki's debts and recapitalize Bank of Cyprus through a deposit/equity conversion.
The raid on uninsured Laiki depositors is expected to raise 4.2 billion euros, Eurogroup chairman Jeroen Dijssebloem said."
Cyprus reaches last-minute deal on 10 billion euro bailout | Reuters
Liberals in my country talk often of raiding people's savings as well. :~)
The raid on uninsured Laiki depositors is expected to raise 4.2 billion euros, Eurogroup chairman Jeroen Dijssebloem said."
Cyprus reaches last-minute deal on 10 billion euro bailout | Reuters
Liberals in my country talk often of raiding people's savings as well. :~)
Ohhhhhh, and now Spain gets into the action!
"The restructuring terms announced by the FROB will impose losses of up to 61% at Spain's largest nationalized banks. At Bankia SA, BKIA.MC -38.65% the largest of the institutions and the only one that is publicly traded, shareholders will be nearly wiped out and junior bondholders will lose around 30% of their original investment."
Spain Brings the Pain to Bank Investors - WSJ.com
Comrades unite! The Revolution is NOW!
"The restructuring terms announced by the FROB will impose losses of up to 61% at Spain's largest nationalized banks. At Bankia SA, BKIA.MC -38.65% the largest of the institutions and the only one that is publicly traded, shareholders will be nearly wiped out and junior bondholders will lose around 30% of their original investment."
Spain Brings the Pain to Bank Investors - WSJ.com
Comrades unite! The Revolution is NOW!
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