tag:blogger.com,1999:blog-17232051.post7140789348263962525..comments2024-03-18T22:32:52.802-04:00Comments on Noahpinion: Did risky mortgage lending cause the financial crisis?Noah Smithhttp://www.blogger.com/profile/09093917601641588575noreply@blogger.comBlogger106125tag:blogger.com,1999:blog-17232051.post-7613614220913084222013-02-22T15:52:02.234-05:002013-02-22T15:52:02.234-05:00Terrible logic in this blog post.
To say that the...Terrible logic in this blog post.<br /><br />To say that the CRA had nothing to do with the housing bubble because it was created in the 1970s is like saying the Fed had nothing to do with the recession of 2008 because it was created in 1913.<br /><br />Or, it is like saying that the US wasn't responsible for the invasion of Iraq in 2003 because the US was created in 1776 and they didn't invade Iraq in 1776.<br /><br />Why do people read this drivel?Georgenoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-57290504756746851662013-01-09T04:07:40.457-05:002013-01-09T04:07:40.457-05:00Mortgage rates continued to inch lower on average ...Mortgage rates continued to inch lower on average after rising to the maximum points since September at the end of previous week. There were no significant market moving proceedings following the move, but rather, rates markets are simply consolidating after last week's fast-paced changes.<br /><a href="http://mortgagenews2.com/mortgage-rates/" rel="nofollow"><b>mortgage rates</b></a>Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-2362394689001179072012-12-29T15:10:46.069-05:002012-12-29T15:10:46.069-05:00Noah, You might be knowledgeable on econ, but have...Noah, You might be knowledgeable on econ, but have missed items to consider & are short on facts about mortgages, relative to the "bubble crash," which you avoided. The fact that the CRA had no major problems for 30 years is insignificant & inapplicable (ceteris paribus? hellno!).<br /><br />Your beginning lines mis-state the recession causes, instead being secondary.<br /><br />The high default rates on over-priced homes created the recession.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-26390998603424398212012-12-20T04:37:00.631-05:002012-12-20T04:37:00.631-05:00I admire the valuable information you offer in you...I admire the valuable information you offer in your articles. I will bookmark your blog <a href="http://www.bharatbook.com/market-research-reports/automobiles-market-research-report/car-finance-uk-january-2012.html" rel="nofollow">Car Finance - UK - January 2012</a>Market Research Reportshttps://www.blogger.com/profile/01338849502816267355noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-66651444907593272912012-12-18T01:36:03.287-05:002012-12-18T01:36:03.287-05:00They did business the normal way and now you are t...They did business the normal way and now you are telling them this "normal" way doesn't work for my election winning chances so you have to change them. <a href="http://www.yasabe.com/es/" rel="nofollow">Sección Amarilla</a><br />Anonymoushttps://www.blogger.com/profile/09988824537426226265noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-70377580004641608822012-12-17T20:15:35.998-05:002012-12-17T20:15:35.998-05:00Repeat after me: (repeating after Bill Black)
ACC...Repeat after me: (repeating after Bill Black)<br /><br />ACCOUNTING CONTROL FRAUD<br />ACCOUNTING CONTROL FRAUD<br />ACCOUNTING CONTROL FRAUD<br />...MaysonicWriteshttps://www.blogger.com/profile/15191812487437295702noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-3884686363421628652012-12-15T17:28:09.653-05:002012-12-15T17:28:09.653-05:00There is not much people at your IQ level can do a...<i>There is not much people at your IQ level can do anyway.</i><br /><br />Well, I guess persuading the likes of you is beyond knuckleheads like Noah and Krugman. <br /><br />You could at least adopt a screen name so we'll know to sit up and pay attention when you're ready to grace us with your wit & wisdom.mattskihttps://www.blogger.com/profile/07936264188400397646noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-19823771145398812112012-12-14T00:10:46.290-05:002012-12-14T00:10:46.290-05:00Dude Stop kidding yourself. It is ok. We are all b...Dude Stop kidding yourself. It is ok. We are all biased in some way. But most people give data some respect even when it challenges their bias. But not the low IQ liberals. The argument started with the data in the paper. When you did not like what the data was saying you said Oh Well the data is only for 1999 to before the crisis. Once you realized an 8 year period exactly prior to the crisis matters especially because of the special expanding of laws by the Clinton government to ease all sorts of lending you cried Well Correlation is not causation. <br /><br />I mean how can you even keep a straight face with that kind of obvious bias in your heads. No correlation 100% proves any causation. We all know that. But each piece of strong evidence increases the possibility of causation. In the end you look at more history, use your logic and begin the see the world for what it is. Not what you want it to be. You want to think of the world as the rich being greedy and wanting to break laws all the time. You do not want to see the world as simply people's natural responses to the laws the Government makes. You do not want to think Government's interference with the natural order as being bad for the long term. You want to live in Utopia because that is all that your brain allows you to comprehend. And I completely get that. It's ok. There is not much people at your IQ level can do anyway.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-91611505861779890742012-12-13T14:54:33.217-05:002012-12-13T14:54:33.217-05:00They never audited all the loans because they felt...They never audited all the loans because they felt that tranching and relying on past behavior was adequate. In retrospect that was a mistake, but at the time it may not have been as clear.<br /><br />This is not to say that the fact that the issuers of a bond pay for the rating may not create perverse incentives. At the same time, the agencies need to balance pleasing their customers with maintaining their reputation, without which they wouldn't have customers Who would bother to obtain a rating from an agency that is not respected by bond markets? Of course, their agencies would care more about their reputation if there was more competition. Unfortunately, the government has created an opligopoly by assigning the status of "Nationally recognized statistical rating organization". Since only three agencies were NRSO according to the government, collusion was easier. I think the SEC should seriously consider making the entrance of rating agencies in the market easier!CAnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-6943399107652283922012-12-13T14:19:57.995-05:002012-12-13T14:19:57.995-05:00What if markets WERE pricing risky assets correctl...What if markets WERE pricing risky assets correctly, by assuming that CRA mortgates would ultimately be on the governments tab? Which they are (Fanny, Fed etc)<br /><br />There is reason to believe some of the larger broker dealers saw it this way.<br /><br />just saying...Davydehttps://www.blogger.com/profile/15161743272166194930noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-17948813433854987862012-12-13T12:26:05.947-05:002012-12-13T12:26:05.947-05:00Clarification: If you criticize the government fo...Clarification: If you criticize the government for lack of regulatory oversight that I am fully on board with.mattskihttps://www.blogger.com/profile/07936264188400397646noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-6053642824815805502012-12-13T02:10:05.078-05:002012-12-13T02:10:05.078-05:00The claim that you could mix together a bunch of m...The claim that you could mix together a bunch of mortgages with X% default rate and get "AAA" paper was based on the assumption that mortgage defaults were UNCORRELATED.<br /><br />Which was bogus, because obviously all mortgages in a given area will tend to default at once. But it was the excuse used.Nathanaelnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-2931680428459394122012-12-13T02:08:31.614-05:002012-12-13T02:08:31.614-05:00The ratings agencies knew they were rating junk as...The ratings agencies knew they were rating junk as AAA... but they were paid by the banks (inherent conflict of interest) and the banks threatened to withdraw their payments (go to the competitor) if the ratings agencies didn't do what the banks asked. <br /><br />To be fair to the ratings agencies, Fitch and Best usually refused to rate the securitized junk. S&P and Moody said "Sure, AAA, how much do you want to pay for that?"<br /><br />Yep, collusion. The root of the thievery was in operations like Countrywide, which infected all of the major banks, but there were a lot of other organizations bribed to go along, including title insurers and ratings agencies and of course regulators and politicians. Bill Black has the best description: "Criminogenic environment"Nathanaelnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-25735307014687668882012-12-13T02:03:20.726-05:002012-12-13T02:03:20.726-05:00Risky mortgage lending -- and indeed, fraudulent m...Risky mortgage lending -- and indeed, fraudulent mortgage "lending" in many cases -- was *fraudulently misrepresented* as "AAA bonds" by certain bankers for the purposes of their own profits. They also appear to have been running frauds in several other directions. <br /><br />If you've been following Naked Capitalism for a few years, or read any Bill Black, you'll realize that criminality was epidemic in certain "banks" like Countrywide, and it spread to all of the megabanks.Nathanaelnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-14856578942363786442012-12-12T23:52:40.957-05:002012-12-12T23:52:40.957-05:00By going through the article it is clear that mort...By going through the article it is clear that mortgage lending is not financial crisis. the same sort of services is provded by many service provider by providing mortgage with low risk or without risk.one of the service provider is Hamilton Rowe.<br /><br />Visit us :http://www.hamiltonrowe.com/ Anonymoushttps://www.blogger.com/profile/10757808604882652528noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-73354547611294242842012-12-12T21:10:12.527-05:002012-12-12T21:10:12.527-05:00You should use more caps, it'll impress us wit...You should use more caps, it'll impress us with your omniscience even more so.<br /><br />Your argument is entirely a priori, which explains your disinterest in facts.mattskihttps://www.blogger.com/profile/07936264188400397646noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-82077152034802801672012-12-12T20:55:32.826-05:002012-12-12T20:55:32.826-05:00So at least in the long run the misrating did not ...<i>So at least in the long run the misrating did not pay off </i><br /><br />Of course it didn't. But that hardly cuts against the idea that there was collusion between the ratings agencies and the securitizers. Indeed the creators of the product used high powered lawyers to intimidate lowly agency employees into giving the AAA stamp they coveted because it meant a sure and easy sale. How you can implicate the government is a little baffling.mattskihttps://www.blogger.com/profile/07936264188400397646noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-35489294929360563662012-12-12T16:32:30.998-05:002012-12-12T16:32:30.998-05:00The answer was to make it profitable by slicing an...The answer was to make it profitable by slicing and dicing them and shorting it, selling it to to each other to further hide that MERS was a farce and that the assessments were a sham to keep prices inflated, and hide the toxic hot potato in long prospectuses to be dumped eventually on those who trusted that large Investment firms would never sell them junk... Angelinanoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-54475673073398523682012-12-12T16:21:46.902-05:002012-12-12T16:21:46.902-05:00It was collusion and blinkers-on denial for greeds...It was collusion and blinkers-on denial for greeds sake just as it was with Madoff...<br /><br />If a huge investment firm like Goldman is buying and selling this crap and also has mortgage servicers (it sold that part as it was being investigated for other fraud they got hand slapped for) then of course it was collusion.<br /><br />Greed ensured Mers took over for proper documents and mortgage notes going through the process and ensured no one signature. The list of complicit are those who gained from day one... from the home assessors right on up. I n Florida it was like a mob run enterprise! And yet few were charged...Angelinanoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-9159348367149541752012-12-12T16:10:12.877-05:002012-12-12T16:10:12.877-05:00For a more quantitative discussion of this topic, ...For a more quantitative discussion of this topic, see the extensive comments to Tyler Cowen's post on Marginal Revolution:<br /><br />http://marginalrevolution.com/marginalrevolution/2012/12/did-the-community-reinvestment-act-cra-lead-to-risky-lending.html<br />Steve Sailerhttps://www.blogger.com/profile/11920109042402850214noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-81912101360154867362012-12-12T16:05:01.434-05:002012-12-12T16:05:01.434-05:00It's an interesting point in a general sense. ...It's an interesting point in a general sense. But I think you can safely argue that there were huge quantities of investment products that were mis-rated by the ratings agencies according to their own stated risk evaluation models. If they aren't rated properly, they aren't priced properly, therefore they're mispriced.MaxUtilitynoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-77285349492125907812012-12-12T15:34:54.134-05:002012-12-12T15:34:54.134-05:00Here, ratings companies
http://www.huffingtonpos...Here, ratings companies<br /><br /><br />http://www.huffingtonpost.com/william-k-black/the-two-documents-everyon_b_169813.html<br /><br />Short term gains<br /><br />http://www.ritholtz.com/blog/2011/12/fannie-and-freddie-fantasies/<br /><br />Black knows. He helped in the S&L prosecutions.EMichaelhttps://www.blogger.com/profile/14473050281754520240noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-20525172972314213432012-12-12T15:12:20.836-05:002012-12-12T15:12:20.836-05:00Yes. Laughing at your own jokes is supposedly a go...Yes. Laughing at your own jokes is supposedly a good way to de stress. Especially after a bout of cognitive dissonance. It works well to get your brain back to its original level of understanding or confusion whichever way you like it.<br /><br />And the answer to your question is Yes. Anything which is a public good and people have the freedom to use it reasonably freely then sure Why not. But I think that will have to be ONE BIG CAR. But surely there are opportunity costs, the same money could be used to build better things. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-25403074047238839212012-12-12T15:08:12.316-05:002012-12-12T15:08:12.316-05:00Cause the child has to see the paper to know the f...Cause the child has to see the paper to know the facts. Even the ratings firms never audited all of the loans, just a portion. <br /><br />Cause investors and insurers rely on the ratings firms and the reps and warranties from the banks. <br /><br />You discount short term profit motives overriding long term results. In almost every single case, the short term profit was considered more important. EMichaelhttps://www.blogger.com/profile/14473050281754520240noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-89232268761793590822012-12-12T14:35:57.407-05:002012-12-12T14:35:57.407-05:00So if the government buys EVERYONE a car then it i...So if the government buys EVERYONE a car then it is all good? Ha ha, sorry, I couldn't resist.CAnoreply@blogger.com