"Emancipate yourself from mental slavery, none but ourselves can free our mind.” - Bob Marley

Friday, December 12, 2008

CRA Myth Demolished - AGAIN

Barry Ritholtz demolishes the "CRA caused this" myth yet again. Some relevant snippets (the whole thing is a good read):

As the prior post on foreclosures shows, the concentration is mostly middle class and upper middle class white suburban neighborhoods...

California leads the nation in foreclosures. The state’s foreclosure activity was up 51% from a year ago. These are not CRA communities, they are what were hoped to be surburban bedroom communities east of the major cities (San Diego and L.A.)...

the Community Reinvestment Act required banks to make good faith attempts to loan the money back to its own depositors.

He mentions “in 1995 the Clinton administration added tough new regulations,” but omits any mentions that the Bush administration substantially watering down the act in 2004.

since Bear Stearns collapsed in March, there has been a veritable parade of bankers, mortgage originators, lenders, fund managers, and investment banks CEOs all testifying in Washington D.C. about the causes of the crisis. By some strange coincidence, not a single one blamed the CRA (Dick Fuld, CEO of Lehman Brothers was even asked about it). Not a one.

Why did 30 other countries, none of which have are covered by the CRA, have a remarkably similar housing boom and bust to the USA?

Barry is demolishing an Op-Ed in the NYT - once again, the blogosphere fixes what the MSM breaks.

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About Me

I'm a 57 year old geek. I voted Democratic for 20 years, because I disliked the Republicans more. But now, nobody really speaks for me. I'm for Guns, for more correct government regulation of the financial world, against illegal immigration and amnesty. (in 2008 I ended up voting Republican - too many questions about Obama, and voting against anybody who voted for TARP 1.) In 2010 I voted a stright republican ticket because the Democrats have completely lost their minds.