The deficit is going down

[BlueStreak]

Originally Posted by whell

Isn't every loan that a bank makes a gamble?

Yes, but that don't mean it's okay to get stupid with it.

Dave

[whell]

Originally Posted by BlueStreak

Yes, but that don't mean it's okay to get stupid with it.

Dave

Sure. And the same business priorities to generate return business, build assets, and maintain a stable portfolio of risk dictates a bank's actions on the securities side of the business.

[bobabode]

What it boils down to is the removal of Glass Steagal and the protection it guaranteed to the regular banking customer was that the treasury ended up being raided by the scumbags on Wall St. when the shit hit the fan in 2008. Guess who got hurt? The same regular schmoe's who found all their taxes gone up in smoke. Explain to me why there are no funds left to maintain basic infrastructure. To pay for education. Firefighters. Police. Then the idiots on the right claim it's the unions that are bleeding us. WTF is that.

[Oerets]

Originally Posted by whell

Isn't every loan that a bank makes a gamble?

"The Glass-Steagall Act separated the powers of commercial and investment banking, which insured that banks would not take too much risk with depositors' money. After the repeal of Glass-Steagall, greed won out over prudence and banks did indeed take too much risk with their depositors' money. Between 1999 and 2008, Wall Street became less like the fabled financial district and more like the Las Vegas Strip. Even the regulation that still existed didn't seem to be working."
http://bizfinance.about.com/od/curre...ial_Crisis.htm


Allowing the banks to get so big that they can bring down the economy is never a good thing. Now they are even bigger for the next time. Because I see no real reason not to believe there will not be another one.



Barney

[CarlV]

Originally Posted by Oerets

Now they are even bigger for the next time. Because I see no real reason not to believe there will not be another one.



Barney

+1

Not an effing thing has been done to prevent next time.


Carl

[whell]

Originally Posted by bobabode

What it boils down to is the removal of Glass Steagal and the protection it guaranteed to the regular banking customer was that the treasury ended up being raided by the scumbags on Wall St. when the shit hit the fan in 2008. Guess who got hurt? The same regular schmoe's who found all their taxes gone up in smoke. Explain to me why there are no funds left to maintain basic infrastructure. To pay for education. Firefighters. Police. Then the idiots on the right claim it's the unions that are bleeding us. WTF is that.

Nah, regular shmoes who didn't allow themselves the temptation of over-reaching on mortgages they probably knew they couldn't afford while gambling on an already inflated real estate market were the ones that got hurt.

Why was the real estate market in inflated? Cheap money and a mortgage industry pressured by the Feds to make loans to folks would couldn't afford to pay them back.

Before we take another look at Glass - Steagal, let's get rid of the leftist tool that really greased the skids for this mess: the Community Reinvestment Act.

http://articles.businessinsider.com/...mortgage-rates

[Oerets]

Originally Posted by whell

Nah, regular shmoes who didn't allow themselves the temptation of over-reaching on mortgages they probably knew they couldn't afford while gambling on an already inflated real estate market were the ones that got hurt.

Why was the real estate market in inflated? Cheap money and a mortgage industry pressured by the Feds to make loans to folks would couldn't afford to pay them back.

Before we take another look at Glass - Steagal, let's get rid of the leftist tool that really greased the skids for this mess: the Community Reinvestment Act.

http://articles.businessinsider.com/...mortgage-rates

One of the problems is those of us who were smart with our money and did not cause the problems are now paying for the ones who made the mess.
How can regulations that prevented calamities up to the point of removal be blamed for the fall that occurred?
The reason the loans were made was for the fees the banks were making period. As long as home prices were going up the system worked for the banks it was smooth sailing. The banks knew exactly what they were doing. Knowing all the time when it hit the fan the government would foot the bill.





Barney

[Bigerik]

I wish the righties, or at least those overly enamoured with a dream of a free market, would wake up to the reality that there is an incredible imbalance of power and knowledge between the banks and the regular guy investor. John Q Public didn't have a clue that the time they got approved for the big mortgage, someone in the system was gaming them to make a quick buck. And building a house of cards that would bury the little guy.

I know I have said this before, but how is a little guy, who maybe takes out one mortgage in his whole life, supposed to understand a mortgage document pages long, that has been poured over by an army of the banks lawyers, and written in a way that makes it nigh onto indecipherable to that same little guy?

[merrylander]

Originally Posted by whell

Nah, regular shmoes who didn't allow themselves the temptation of over-reaching on mortgages they probably knew they couldn't afford while gambling on an already inflated real estate market were the ones that got hurt.

Why was the real estate market in inflated? Cheap money and a mortgage industry pressured by the Feds to make loans to folks would couldn't afford to pay them back.

Before we take another look at Glass - Steagal, let's get rid of the leftist tool that really greased the skids for this mess: the Community Reinvestment Act.

http://articles.businessinsider.com/...mortgage-rates

It has been amply documented that mortgage brokers and lender fudged the details (read facts) on many, many loan applications. Given our mortgage system they took their "points" ($$$$$) and ran. The resulting securitzed mortgages then turned into derivatives cause the meltdown.


The CRA did not say that they had to be crooked, it was really aimed at the practice of red lining. Our mortgage system is what you free marketers like to call a moral hazard, the miracle is that it did not happen sooner.

[merrylander]

Originally Posted by whell

Isn't every loan that a bank makes a gamble?

Yeah but folks tend to get careless when gambling with other people's money. Especially if they know the FDIC will cover their bets.