21 Nov 2022 5:48 am
Wow! Still pimping the Comminoty Reinvestment Act as the cause of the 2008 investment banking driven meltdown.FOS » 20 Nov 2022, 4:05 pm » wrote: ↑ wrong. the primary cause of the recession was alterations of the community reinvestment act, which FORCED banks to give loans to black people, even if they had bad credit.
if banks were allowed to deal with credit scores objectively, then their high risk adventures probably would have worked fine.
The banks were forced to loan money to poor folks by the government.
Banks...mostly mortgage bankers and associated mortgage brokers were like a pack of hyenas at a wildebeest carcass. They couldn't write that mortgage paper, and that variable rate refinancing paper, and collect those bloated fees fast enough. Nobody forced them to do ****.
What caused the 2008 meltdown was the development of investment banking derivative products made up of all sorts of loan paper, a large part of which was sub-prime mortgage paper bundled and sold as paper that was rated A by Standard and Poor's and Moody's. When most of it wasn't anywhere near real A rated quality paper. Where did the money coming from that the investment bankers used to buy all this paper for their new derivative products? It was borrowed, leveraged at rates of 40:1 and more of borrowed money vs actual bank capital dollars. And when the home mortgage foreclosure rate doubled (from 1% to 2%, yes...when Lehman and Bear Stearns went belly up, 98% of American home mortgages were still above water), the banks were too extended to manage it and went under.
The Community Reinvestment Act has always been a conjob excuse for the 2008 bank meltdown. The real cause for it was Republican driven deregulation of the banking, and investment banking industry.
One last thing...Robert Kiyosaki is a sociopathic grifter. Zimbabwe dollars?