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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: i-node who wrote (562475)	4/22/2010 9:47:49 PM
From: combjelly	Respond to of 1575596

"Except it isn't a lie." Sure it is a lie. If for no other reason, the vast majority of that bad paper was written by lenders who didn't fall under the CRA. "This is an idiotic claim." It is reality. It may be idiotic, I suppose, but... " The loans went bad because they were made to unqualified individuals. Period," Well, duh. Never claimed differently. Loans were given out with no credit checks or anything. And, why not? They were bundled into other securities and sold off. "Not because there was a secondary market for the paper or because it could be "insured" with derivatives" Umm, i-node, that is precisely what I am talking about. You are grossly mis-informed if you think the two things weren't linked. And that they were at the heart of the crisis. It is this way. There was no risk in making a loan. For someone like Goldman Sachs, there were plenty of reasons to make loans despite the qualifications of the borrower. They got the fees for making the loans. They didn't take any risk because they bundled and sold them as securities, taking a fee there. If they thought a particular bundle was at risk for default, they bought a CDS so they could profit when it went bust. So they made money at every step and couldn't lose. Which they didn't. "The only way CRA can be defended is out of total ignorance." No, the CRA can be defended because they had a lower default rate, or at least until employment fell off the cliff. I don't know what happened then. And that most of the bad paper was written by companies who didn't fall under the requirements of the CRA. The crisis started with companies who didn't have anything to do with the CRA, so the CRA cannot be held responsible for their woes. Despite your handwaving. Look, if you want to discuss this, at least get some education about what actually happened instead of you just making shit up.