federal reserve says u.s. economy near full employment
- Thread starter dherd
- Start date
Some of it was entailed in that, but Mostly stemmed from Bill Clintons repeal of Glass-Steagal. Investing and loaning have proved to be problematic historically, as well as other later 90s decisions and 2004 SEC decisions.
I agree that the repeal of Glass-Steagal was wrong. But no bank was forced to make bad loans. Not a single one. Ultimately, the Great Recession was due to greed of the financial institutions.
You mean those that are backing Hillary Clinton Like Goldman Sachs etc.?
let me say something about "bill clintons repeal of glass stegal".
first of all the repeal of glass steagal was a top priority of
the republican party since it was passed by democrats in the
1930"s. they pushed hard for its repeal every single year at
every single opportunity.
republicans finally got it through by putting it into a budget bill which
had to be signed to avoid another republican govt shutdown. i assume
clinton signed it as a compromise to the budget bill. yes, he was wrong
to sign it but he nor any other democrat EVER advocated for its repeal.
finally eg ashes to glory and i defended glass steagal while every single one
of you conservatives on here argued that it should be repealed.
for you now to turn around 360 degrees and pretend it was all bill clintons
idea is utterly disgusting, but i must admit typical of all you conservatives.
first of all the repeal of glass steagal was a top priority of
the republican party since it was passed by democrats in the
1930"s. they pushed hard for its repeal every single year at
every single opportunity.
republicans finally got it through by putting it into a budget bill which
had to be signed to avoid another republican govt shutdown. i assume
clinton signed it as a compromise to the budget bill. yes, he was wrong
to sign it but he nor any other democrat EVER advocated for its repeal.
finally eg ashes to glory and i defended glass steagal while every single one
of you conservatives on here argued that it should be repealed.
for you now to turn around 360 degrees and pretend it was all bill clintons
idea is utterly disgusting, but i must admit typical of all you conservatives.
yes, it was nothing but Republicans despite the 90 to 8 "yes" vote in the Senate and the 362 to 57 "yes" vote in the House...
193 Dem's voted for it... 58 voted "no"
https://en.wikipedia.org/wiki/Gramm–Leach–Bliley_Act
and it was not "attached" to anything. the budget was approved on Nov. 20th. the GLBA was signed on Nov. 12. if Bill Clinton was "forced" to sign it in any way why would he defend it later? why wouldn't he throw congress under the bus?
Bill Clinton, as well as economists Brad DeLong and Tyler Cowen have all argued that the Gramm–Leach–Bliley Act softened the impact of the crisis.[35][36]
You and Greed are simply full of shit. Talking out your ass. This "link" is the speech/press release given by President Bill Clinton following the signing of the legislation. I've pulled a few excerpts demonstrating once again...just how blind libs tend to be.
Bill Clinton knew exactly what he was signing............and bragged about it.
The bolded section speaks directly to the CRA. The component of the law which "forced" banks to comply with govt mandates and write the (bad) loans, ultimately guaranteed by the GMA's.
http://www.presidency.ucsb.edu/ws/?pid=56922
Beginning with the introduction of an Administration-sponsored bill in 1997, my Administration has worked vigorously to produce financial services legislation that would not only spur greater competition, but also protect the rights of consumers and guarantee that expanded financial services firms would meet the needs of America's underserved communities---
Removal of barriers to competition will enhance the stability of our financial services system. Financial services firms will be able to diversify their product offerings and thus their sources of revenue. They will also be better equipped to compete in global financial markets
Both the Vice President and I have insisted that any financial services modernization legislation must benefit American communities by preserving and strengthening community reinvestment. I am very pleased that the Act accomplishes this goal. The Act establishes an important prospective principle: banking organizations seeking to conduct new nonbanking activities must first demonstrate a satisfactory record of meeting the credit needs of all the communities they serve, including low- and moderate-income communities. Thus, the law will for the first time prohibit expansion into activities such as securities and insurance underwriting unless all of the organization's banks and thrifts maintain a "satisfactory" or better rating under the Community Reinvestment Act (CRA). The CRA will continue to apply to all banks and thrifts, and any application to acquire or merge with a bank or thrift will continue to be reviewed under CRA
The Act's redomestication provisions could allow mutual insurance companies to avoid State law protecting policyholders, enriching insiders at the expense of consumers. We intend to monitor any redomestications and State law changes closely, returning to the Congress if necessary. The Act's Federal Home Loan Bank (FHLB) provisions fail to focus the FHLB System more on lending to community banks and less on arbitrage activities and short-term lending that do not advance its public purpose
Sen. Phil Gramm (R, Texas), Rep. Jim Leach (R, Iowa), and Rep. Thomas J. Bliley, Jr. (R, Virginia), the co-sponsors of the Gramm–Leach–Bliley Act.
Respective versions of the Financial Services Act were introduced in the U.S. Senate by Phil Gramm (Republican of Texas) and in the U.S. House of Representatives by Jim Leach (R-Iowa). The third lawmaker associated with the bill was Rep. Thomas J. Bliley, Jr. (R-Virginia), Chairman of the House Commerce Committee from 1995 to 2001.
During debate in the House of Representatives, Rep. John Dingell (Democrat of Michigan) argued that the bill would result in banks becoming "too big to fail." Dingell further argued that this would necessarily result in a bailout by the Federal Government.[8]
The House passed its version of the Financial Services Act of 1999 on July 1, 1999, by a bipartisan vote of 343–86 (Republicans 205–16; Democrats 138–69; Independent 0–1),[9][10][note 1] two months after the Senate had already passed its version of the bill on May 6 by a much-narrower 54–44 vote along basically-partisan lines (53 Republicans and 1 Democrat in favor; 44 Democrats opposed).[12][13][14][note 2]
When the two chambers could not agree on a joint version of the bill, the House voted on July 30 by a vote of 241–132 (R 58–131; D 182–1; Ind. 1–0) to instruct its negotiators to work for a law which ensured that consumers enjoyed medical and financial privacy as well as "robust competition and equal and non-discriminatory access to financial services and economic opportunities in their communities" (i.e., protection against exclusionary redlining).[note 3]
The bill then moved to a joint conference committee to work out the differences between the Senate and House versions. Democrats agreed to support the bill after Republicans agreed to strengthen provisions of the anti-redlining Community Reinvestment Act and address certain privacy concerns; the conference committee then finished its work by the beginning of November.[16][17] On November 4, the final bill resolving the differences was passed by the Senate 90–8,[18][note 4] and by the House 362–57.[19][note 5] The legislation was signed into law by President Bill Clinton on November 12, 1999.[20]
Last edited:
That doesn't refute one think that was said earlier
Sen. Phil Gramm (R, Texas), Rep. Jim Leach (R, Iowa), and Rep. Thomas J. Bliley, Jr. (R, Virginia), the co-sponsors of the Gramm–Leach–Bliley Act.
Respective versions of the Financial Services Act were introduced in the U.S. Senate by Phil Gramm (Republican of Texas) and in the U.S. House of Representatives by Jim Leach (R-Iowa). The third lawmaker associated with the bill was Rep. Thomas J. Bliley, Jr. (R-Virginia), Chairman of the House Commerce Committee from 1995 to 2001.
During debate in the House of Representatives, Rep. John Dingell (Democrat of Michigan) argued that the bill would result in banks becoming "too big to fail." Dingell further argued that this would necessarily result in a bailout by the Federal Government.[8]
The House passed its version of the Financial Services Act of 1999 on July 1, 1999, by a bipartisan vote of 343–86 (Republicans 205–16; Democrats 138–69; Independent 0–1),[9][10][note 1] two months after the Senate had already passed its version of the bill on May 6 by a much-narrower 54–44 vote along basically-partisan lines (53 Republicans and 1 Democrat in favor; 44 Democrats opposed).[12][13][14][note 2]
When the two chambers could not agree on a joint version of the bill, the House voted on July 30 by a vote of 241–132 (R 58–131; D 182–1; Ind. 1–0) to instruct its negotiators to work for a law which ensured that consumers enjoyed medical and financial privacy as well as "robust competition and equal and non-discriminatory access to financial services and economic opportunities in their communities" (i.e., protection against exclusionary redlining).[note 3]
The bill then moved to a joint conference committee to work out the differences between the Senate and House versions. Democrats agreed to support the bill after Republicans agreed to strengthen provisions of the anti-redlining Community Reinvestment Act and address certain privacy concerns; the conference committee then finished its work by the beginning of November.[16][17] On November 4, the final bill resolving the differences was passed by the Senate 90–8,[18][note 4] and by the House 362–57.[19][note 5] The legislation was signed into law by President Bill Clinton on November 12, 1999.[20]
Sen. Phil Gramm (R, Texas), Rep. Jim Leach (R, Iowa), and Rep. Thomas J. Bliley, Jr. (R, Virginia), the co-sponsors of the Gramm–Leach–Bliley Act.
Respective versions of the Financial Services Act were introduced in the U.S. Senate by Phil Gramm (Republican of Texas) and in the U.S. House of Representatives by Jim Leach (R-Iowa). The third lawmaker associated with the bill was Rep. Thomas J. Bliley, Jr. (R-Virginia), Chairman of the House Commerce Committee from 1995 to 2001.
During debate in the House of Representatives, Rep. John Dingell (Democrat of Michigan) argued that the bill would result in banks becoming "too big to fail." Dingell further argued that this would necessarily result in a bailout by the Federal Government.[8]
The House passed its version of the Financial Services Act of 1999 on July 1, 1999, by a bipartisan vote of 343–86 (Republicans 205–16; Democrats 138–69; Independent 0–1),[9][10][note 1] two months after the Senate had already passed its version of the bill on May 6 by a much-narrower 54–44 vote along basically-partisan lines (53 Republicans and 1 Democrat in favor; 44 Democrats opposed).[12][13][14][note 2]
When the two chambers could not agree on a joint version of the bill, the House voted on July 30 by a vote of 241–132 (R 58–131; D 182–1; Ind. 1–0) to instruct its negotiators to work for a law which ensured that consumers enjoyed medical and financial privacy as well as "robust competition and equal and non-discriminatory access to financial services and economic opportunities in their communities" (i.e., protection against exclusionary redlining).[note 3]
The bill then moved to a joint conference committee to work out the differences between the Senate and House versions. Democrats agreed to support the bill after Republicans agreed to strengthen provisions of the anti-redlining Community Reinvestment Act and address certain privacy concerns; the conference committee then finished its work by the beginning of November.[16][17] On November 4, the final bill resolving the differences was passed by the Senate 90–8,[18][note 4] and by the House 362–57.[19][note 5] The legislation was signed into law by President Bill Clinton on November 12, 1999.[20]
Bill Clinton KNOWINGLY, WANTED ALL OF THIS!!!!!!!
(pay attention to this part in your reply DTARD...THIS IS CRITICAL)
......as well as "robust competition and equal and non-discriminatory access to financial services and economic opportunities in their communities" (i.e., protection against exclusionary redlining)
Democrats agreed to support the bill after Republicans agreed to strengthen provisions of the anti-redlining Community Reinvestment Act
(the provision of the law DEMS demanded be included that would ultimately require banks loan to unqualified buyers in the future. The provision that promised banks they could package and sell those mortgages to the govt guaranteed GMAs)
What some of you utopian dreamers seem to forget is Glass Steagal repeal BY ITSELF didn't create the bad loans---- the Mortgage Backed Securities---the Credit Default Swaps---- the real estate bubble. The COMMUNITY REINVESTMENT ACT provision and its increased influence within the law DID.
This provision (championed by Bill Clinton and Dems) set the stage for what George W Bush would later inherit......(since libs are all about excusing what new presidents inherit). A ticking time bomb of over leverage and economic turmoil. Had AlGore won the election(s), he too would have experienced this mortgage market implosion. It was inevitable.
Wrong
the law will for the first time prohibit expansion into activities such as securities and insurance underwriting unless all of the organization's banks and thrifts maintain a "satisfactory" or better rating under the Community Reinvestment Act (CRA).
In other words, "make loans regardless of ability to pay back, or lose the satisfactory rating which will authorize your business to legally operate.
I've posted the data, including how the requirements for making sub prime loans increased, during the Clinton administration. I've posted links to the Greenspan/Clinton press conference where they stated their goal was to increase home ownership to over a 70% level. I've posted links to the detailed history of the continuing weakening of underwriting standards within Freddie and Fannie, even showing that they speficially provided banks and mortgage companies with the computer program they had to use when underwriting credits. The government actually took banks out of the decision process.
Let's see the government law that forced financial institutions to give bad loans..........
If banks refused to do 50% of their loan volume (started at 35%, but they kept raising it) in LMI loans (low to moderate income), three things happened:
1. They would be barred from participating in the new reforms, namely being able to incorporate investment and insurance businesses into their operations.
2. Freddie and Fannie would not buy their conventional mortgages. As you may, or may not, know, banks rarely hold residential mortgages on their own books because, while historically safe, they offer very low yields relative to other types of lending. If they can not sell these mortgages, it chokes their capital on low yielding assets, significantly restricting ROA and ROI.
3. They were subject to fines if they missed their minimum CRA baselines, which couldn't be met without the LMI loans.
So was there a law that said they had to do LMI? No. However, there were policies put in place, as outlined above, that made not doing them extremely harmful to the business and the company's goal of generating a return for their investors. Think of it like this, there's no law that says you can't build a coal fired power plant, but if you do they are going to bankrupt you. See how the government can make that threat genuine even without a law?
Additionally, they had no reason not to do them and were even offered incentives to do so. The GMAs were guaranteeing purchase of the loans as long as they were underwriting on the software provided, so no matter how bad the loan the bank wasn't positioned for any loss, they just made the spiff off each loan originated. So when you say "we'll significantly hurt your business if you don't do it, but significantly reward you if you do" then what do you think was going to happen?
1. They would be barred from participating in the new reforms, namely being able to incorporate investment and insurance businesses into their operations.
2. Freddie and Fannie would not buy their conventional mortgages. As you may, or may not, know, banks rarely hold residential mortgages on their own books because, while historically safe, they offer very low yields relative to other types of lending. If they can not sell these mortgages, it chokes their capital on low yielding assets, significantly restricting ROA and ROI.
3. They were subject to fines if they missed their minimum CRA baselines, which couldn't be met without the LMI loans.
So was there a law that said they had to do LMI? No. However, there were policies put in place, as outlined above, that made not doing them extremely harmful to the business and the company's goal of generating a return for their investors. Think of it like this, there's no law that says you can't build a coal fired power plant, but if you do they are going to bankrupt you. See how the government can make that threat genuine even without a law?
Additionally, they had no reason not to do them and were even offered incentives to do so. The GMAs were guaranteeing purchase of the loans as long as they were underwriting on the software provided, so no matter how bad the loan the bank wasn't positioned for any loss, they just made the spiff off each loan originated. So when you say "we'll significantly hurt your business if you don't do it, but significantly reward you if you do" then what do you think was going to happen?
Oh, one other point. Making LMI loans is not a bad thing, but what happened is that they ran out of acceptable LMI customers. In order to keep making conventional loans (remembering that for every "regular loan" they made they had to make a LMI loan) they had to keep dropping underwriting standards and increasing loan to value. Remember hearing about things like interest only loans, negative amortization loans, 125% loans, no income verification, etc.? That was all about finding more "qualified" LMI customers to meet quotas. It was all known, and encouraged by the government and their GMAs.
That gets you to the basic flaw in the whole push by Clinton to increase home ownership rates. Forever (figuratively) home ownership has been in the low 60s%. That has proven to be the natural equilibrium between people that want to own a home and can afford to do so. By artificially trying to push that higher, you are naturally bringing in sub standard borrowers. It's not surprising that after this foolish plan, home ownership rates are right back to where they always were.
That gets you to the basic flaw in the whole push by Clinton to increase home ownership rates. Forever (figuratively) home ownership has been in the low 60s%. That has proven to be the natural equilibrium between people that want to own a home and can afford to do so. By artificially trying to push that higher, you are naturally bringing in sub standard borrowers. It's not surprising that after this foolish plan, home ownership rates are right back to where they always were.
http://cdn.theatlantic.com/static/mt/assets/business/assets_c/2010/11/homeownership rate 2010-q3-36160.php
Image wouldn't post, so gave you the link. The current number is 62.9%. See the bubble the plan caused? The plan was doomed to failure the day it started.
"So was there a law that said they had to do LMI? No." THAT'S CORRECT
And if the CRA forced you to make bad loans, then why is it that
none of the 300+ mortgage originators that imploded were depository banks covered by the CRA?
And if the CRA forced you to make bad loans, then why is it that
none of the 300+ mortgage originators that imploded were depository banks covered by the CRA?
On the other hand I wouldn't provide you with false information on how the cabinets are built.
Trying to change the argument again, how surprising.
By "mortgage originators" I assume you mean mortgage brokers who, as you pointed out, are not financial institutions. Your request was, show me a law that forced FINANCIAL INSTITUTIONS to make bad loans. You have always blamed this on the "Banks" and after being shown to be completely wrong, have moved your argument to non financial institution related mortgage brokers? Yeah, those guys are kind of scummy, blame them all you want, even though they were only able to do what they did because the GMAs were buying their paper.
Thank you for finally admitting that it wasn't the banks. I will agree with you that the investment firms and mortgage brokerage firms acted unethically.
you have to be COMPLETELY out of touch to think anything
other than banks and mortgage companies were ACTIVELY SEEKING OUT NEW LOANS.
you have to be a total living in an underground bunker with no tv radio newspapers or movies to believe what you are
posting.
EVERYONE - EVERYWHERE except maybe banks and mtg co's freely and openly acknowledge the fact that there
were liars loans which the banks never checked credit, were forcing bond rating agencies to falsify ratings. there
were cases where dogs actually got mortgages.
you are a total and i mean total idiot.
other than banks and mortgage companies were ACTIVELY SEEKING OUT NEW LOANS.
you have to be a total living in an underground bunker with no tv radio newspapers or movies to believe what you are
posting.
EVERYONE - EVERYWHERE except maybe banks and mtg co's freely and openly acknowledge the fact that there
were liars loans which the banks never checked credit, were forcing bond rating agencies to falsify ratings. there
were cases where dogs actually got mortgages.
you are a total and i mean total idiot.
Had banks denied loans they were at risk of being deemed non-compliant under the CRA regardless of the borrowers credit level.
Mortgage originators are either mortgage brokers or mortgage bankers. The point is no financial institutions were forced to give bad loans. When you try blaming the cra, it's important to consider none of those banks out of 300 or so that imploded were under the cra.
Last edited:
You're going to have to explain to me what you are trying to say with that comment. Are you saying a bank such has National City Bank, which was collapsed and was absorbed by PNC, was not subject to the Community Reinvestment Act? If that's your contention, please explain why you believe this to be a fact.
So, the entire 8 years of Bush was a big miss. Not a single month did the employment gains for a month manage to hit 140,000.
http://www.factcheck.org/2012/06/obamas-economic-sleight-of-hand/
Yes, this is a little older but we know where Greed bases much of his opinion on. "Inherited" excuses.
Factcheck always seems to be a favorite link for him as well.
Yes, this is a little older but we know where Greed bases much of his opinion on. "Inherited" excuses.
Factcheck always seems to be a favorite link for him as well.
Similar threads
