Andylusion
Platinum Member
Actually the tipping point was in 2004-2006 when Bush enacted his 'ownership society' where he promised to put millions more people into their on homes. And three years after fully enacting his policy, Bush plunged the country into recession when the bottom dropped out of the housing market
Subprime mortgage crisis - Wikipedia
A proximate cause was the rise in subprime lending. The percentage of lower-quality subprime mortgages originated during a given year rose from the historical 8% or lower range to approximately 20% from 2004 to 2006, with much higher ratios in some parts of the U.S. A high percentage of these subprime mortgages, over 90% in 2006 for example, were adjustable-rate mortgages.[4] These two changes were part of a broader trend of lowered lending standards and higher-risk mortgage products
The problem happened 2004-2006 before the democrats took over congress in 2007. So blaming the democrats is as stupid an argument as i've ever heard.
The filthy ass CRA Democrat bill to put government pressure on the lenders to give credit to people that normally would not qualify was the root cause of the disaster. Then in 2007 we had Barney Queerboy as chairman of the Finance committee, which provided oversight. What could possibly go wrong? On top of that the government gave assurances that if anything did go wrong then they would cover the lenders with bailouts, which is exactly what happen.
No Moon Bat. That collapse in 2007 was caused by the Democrat' idea of social justice to lend money to people that neither had the means or the ability to pay it back. Those chickens came home to roost and combine that with the incompetent Democrat oversight and that created the disaster.
All you have to do to connect those dots is to look at the government pressure that was used by the CRA to create lax lending practices, the Democrats taking over Congress in 2007 and the bailouts. Dirty government. You can blame Bush for not stopping the CRA when he had a Republican Congress but the much bigger blame goes to the Democrats for creating the mess with the stupid CRA and mismanaging it in the Congressional oversight committees.
Bullshit. The CRA was NOT the cause of the housing bubble. De-regulation meant that Wall Street could make far more money on sub-prime mortgages than conventional mortgages and Goldman Sachs went on a sub-prime spree, packaging the high risk loans into derivatives which they sold for further profit.
Republicans have bent over backwards to pin this on Carter and Clinton pointing out that lame duck Clinton signed the legislation de-regulating the banks, passed by a Republican Congress and Senate, and Carter signed the original CRA. But it wasn't the CRA, and it wasn't Freddie or Fanny Mae, it was Goldman Sachs, Wall Street, and the Republicans that did it.
There was no "deregulation," dumbass.
The Gramm Leach Bliley Act of 1999.
First, the GLB Act of 1999, can't be used to explain a sub-prime bubble that started in 1997.
Second, the GLB Act did nothing..... let me repeat that and make it absolutely clear.... NOTHING..... that had any effect either way on the sub-prime lending, or the vast majority of institutions involved.
If the GLB Act had not been passed.... there is not one aspect of the sub-prime crash that would have changed. Not one. Not even one.
The only connection between GLB Act, and the sub-prime mortgage crash, is one that the left, generally denies.
The Act made all mergers between banks, be required to meet CRA standards before they could be approved.
So if a Bank wanted to do a merge, they had to meet lending standards to minorities and special interest groups.
Gramm had maintained that he did not want anything in the bill that would expand the application of the Community Reinvestment Act because it was, he said, unnecessarily burdensome to banks. He had sought a provision that would exempt thousands of smaller banks from the law.
But the White House found that provision unacceptable and had its own ideas about community lending. It wanted the legislation to prevent any bank with an unsatisfactory record of making loans to the disadvantaged from expanding into new areas, like insurance or securities.
The White House had insisted that the President would veto any legislation that would scale back minority-lending requirements.
Agreement Reached on Overhaul of U.S. Financial System
In effect, the GLB Act INCREASED regulations on banks.But the White House found that provision unacceptable and had its own ideas about community lending. It wanted the legislation to prevent any bank with an unsatisfactory record of making loans to the disadvantaged from expanding into new areas, like insurance or securities.
The White House had insisted that the President would veto any legislation that would scale back minority-lending requirements.
Agreement Reached on Overhaul of U.S. Financial System
Beyond this, the GLB Act had nothing to do with the crash whatsoever.
The only even attempt to claim a connection, is allowing Insurance,Retail, Commercial, and investment banks to merge.
The problem is, the vast majority of the banks that failed... didn't do that. So they would not have been affected, had the GLB Act never existed.
AIG was only an insurance company. GLB Act did not affect them either way.
Bear Stearns was an investment bank. GLB Act did not affect them either way.
Country Wide was an investment bank. GLB Act did not affect them either way.
Indymac was only Retail. GLB Act did not affect them either way.
Lehman Brothers was only an investment bank. GLB Act did not affect them either way.
Without spending the next 6 pages listing each bank failure, the vast majority were all single business corporations, that would not have been affected by GLB Act at all. Nothing would have changed.
By the way, neither Europe nor Canada, has never had the restrictions on banks, that GLB Act removed.
