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Old 02-15-2013, 01:48 PM   #28

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Originally Posted by Blart View Post
Anyone else shudder when they hear "common sense"?

State of the Union 2013: President Obama calls for 'common sense' solutions

Originally Posted by Rohirrim View Post
The CRA was the fire. What the banksters and Wall Street did was pour a thousand gallons of jet fuel on it. It's also instructive to look at the intent of these parties in this collapse. Frank and Dodd's intent was to create more affordable housing for Americans who couldn't afford it. The intent of those who created the derivatives market was to knowingly abuse the system to rake in wealth for themselves. Add LIBOR into the mix and what Frank/Dodd did is the flea on the elephant's ass.
The government's role went far farther than the CRA. The federal government invented mortgage-backed securies. And through implied taxpayer backing allowed tons of potentially bad debt to be given stellar ratings. The private market really had no choice but to follow suit or leave the market (especially when you factor in the CRA) But that's the mistake they made. They should have left the market, rather than follow federal insanity. Which was the practical effect after the crash anyway.

When it comes down to it, no bank has lost nearly as much cash on the housing crash as the Federal GSE's have. So it's a little ironic that some want to pin this whole problem on the private sector when in reality they were just following the federal government's blueprint.
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