Taibbi and York are both wrong. Taibbi is wrong--the derivatives would not have created any problem if it weren't for all the defaults, or anticipated defaults.

York is wrong and a liar. Only banks or bank affiliates (indirectly) are subject to the CRA. The worst crap was originated outside the banks--especially the outright predatory lending. Banks don't like to be associated with low subprime--they need decent community relations to attract municipal deposits, political support, etc.

My god, you and Matt are both fucking idiots. And proud of your ignorance.

"Phil Gramm, basically created the credit-default-swap market back in 2000." Fucking moron.

No, no, no. This kind of "knowledge" will work on the college campuses, but it's nothing but lies. It's fine for Obama to lie about "deregulation", but recognize that it's a lie, you idiot. It's meant for the auto worker in Ohio, not for the college educated. You're supposed to nod, but not believe.

Joe S.: Yes, Taibbi isn't right on that point, but he's less wrong than York is wrong. Most people suggest the derivatives market isn't the cause of the crisis - it's responsible for the severity of the crisis (I've read estimates that place the size of the CDS market between $45-60 trillion).

Ezra did make a good point the other day that this crisis isn't a vindication for Democrats (because the Gramm amendment Taibbi mentioned passed something like 95-0 in the Senate), but a vindication for liberals, more specifically those who decided it wasn't worth the cost to be taken care of politcally/p0wn3d by corporate interests.

My understnding of CDS - unfunded quasi-insurance that was singled-out for non-regulation and used to make the CDOs rate as higher quality by rating agencies in the tank.

the derivatives would not have created any problem if it weren't for all the defaults

The use of CDSs were applied to securities that should never have been packaged together under the existing assumptions. Because they represent the bigger dollar amount than the defaults themselves, and because they were applied to particularly risky investments irresponsibly, why can we not blame recognize them as the bigger problem?

[Y]ou and Matt are both fucking idiots

Stay classy Thomas. And while you're at it, point us toward the "lie".

go ahead, thomas, do explain it to us, please, pretty please with a cherry on top.

because over here i've got warren buffett and charlie munger (you may have heard of them) who opposed (in isolation) the gramm ammendment in real time and said, in real time and ever since, that the risks embodied here were enormous and would lead to disaster.

over there, i've got you, sneering.

meanwhile, no one made mortgage companies hand out mortgages on "liar loans," no one made investment banks package them up, no one made investment banks purchase them, no one made investment banks mark to (clearly flawed) models, no one made investment banks leverage up 30 to 1.

housing busts we've had before; the worst financial crisis since the depression obviously not. you think maybe the financial engineering had something to do with it?

lots of college grad-ju-ates do, but i guess we're all dumb.

Most people suggest the derivatives market isn't the cause of the crisis - it's responsible for the severity of the crisis

Would the mortgage defaults themselves have risen to the level of "crisis"? Based on the amount of leverage created by the CDS market on them, it seems like that would mean we're in a 100-fold crisis then.

I'm not a CDS expert but was Taibbi so wrong? Of course CDSs were around before 2000, but it seems like the CDS market as we know it today (or, maybe, as we knew it up until a month or so ago) was very different from what existed before the early 2000s. I'm not sure to what degree the deregulation that Gramm championed is responsible for that, but it seems like it might be a fairly large part of the cause.

No?

Actually Joe, Taibbi is more right then wrong in this dialogue, and as usual, the regressive is not only absolutely wrong, but also, typically using racism to justify his wrongheadedness. Essentially,only 20% of homes in this country are in foreclosure. And well over 60%(Even though I think this # is even higher, but because I am not researching to write this, I can't verify it currently.)of the home loans that had been pushed on people during this fiasco, were pushed to get ARM's when they were eligible for fixed rates. Now, more specifically, the concept of mortgage -backed securities did not really gain it's downward momentum until the investment banks were once again allowed to make money on them through gramm-blilely in 99'. Up until this time, there was a consequence to providing mortgages as risky propositions as the loan provider. i.e. traditional banks, felt the consequences directly. Banks still would be in that position, however, when investment banks were given the same ability to provide mortgages, without the consequences of the failure of the loan, as they could just roll the individual loan into a "security" and sell it off to the next bank while making "money" through the sale of said "security" then, they had every incentive to make the sale.Look Joe, it's actually really easy to assess blame. Just look at whose REALLY get hurt here. The people in the homes that are foreclosed or about to be and the American taxpayer who will have to pay back the loans that are being used to bail out these "financial institutions". Notice I didn't call them "banks" because their not. They are investment firms. The C.E.O's are'nt being punished.Their making out like real bandits. So with all this, who is REALLY to blame Joe?

g, non-idiots know that the market existed prior to the act, that it wasn't just Gramm's work, and that there were no regulations overturned, revoked, lessened, etc., by the act. So, pretty much the whole thing is a lie.

so, thomas, your official position is that warren buffet is an idiot.

maybe you should just stop digging.

what the gramm ammendment prevented was putting regulation on leverage into place. try to keep up.

Thomas, while CDSs have been around for a long time, around the time of deregulation, the market for them transformed from being insurance-like (which is what, nominally, they are) to being an avenue for speculation. Thus the market for CDSs has a very different character than it did pre-deregulation. Moreover, the notional size of the CDS market was apparently $180 billion in 1997 (the only number I can find) versus something like $40 trillion today. So I think it's fair to say that the CDS market as it exists today is something that came into existence after deregulation.

"My understnding of CDS - unfunded quasi-insurance that was singled-out for non-regulation and used to make the CDOs rate as higher quality by rating agencies in the tank. "

The first half is correct, the second less so. The main influence CDS in and of themselves had on the crisis was to turn it from an isolated but very painful credit crisis in a particular sector into a systemic crisis of credit risk, counterparty risk and unprecedented illiquidity.

The two principal mechanisms for this were -

a) CDS sold mainly by monolines (MBIA/Ambac etc) and other insurance companies to banks to hedge their large exposures to subprime. As a result of these CDS with AAA rated counterparties banks thought they had effectively risk free exposures and were happy to pile up enormous volumes relative to capital. When the underlying exposures, which were mainly AAA in themselves (regardless of the CDS) went bad, the monolines and insurance companies lost their ratings, which in turn caused the banks to recognise and write down their exposures, weakening their capital base and causing fears in the interbank lending market.

b) When all these troubles caused certain institutions to go under, the large volumes of CDS against those names (note, these CDS are different from the ones I was talking about in (a)) caused yet more worries about counterparty risk in the banking system. Who had Lehman exposure? How much? What would the recoveries be? All that uncertainty caused interbank lending to freeze up completely, precipitating the current phase of the crisis and the massive bailouts.

I don't know enough about the Gramm bill or the early history of CDS to say whether tighter regulation would have prevented the crisis from becoming quite so systemic and catastrophic. No regulation can prevent every crisis, but there's no doubt that CDS played a central role in the spread of this crisis.

I've got a feeling McCain is going to pepper his responses tonight with generous use of "fucking idiots" and "fucking moron."

What's he got to lose?

To clarify some points:

The sorts of CDS I talk about in (a), ironically enough, were basically viewed as insurance products by both parties. It was only from about 2005, when standardised documentation came in, that CDS of asset backed securities were widely used for "speculation" as commonly understood.

Conversely, the types of CDS I'm talking about in (b) were widely used before then for "speculation", both in index and single name form, as standardised documentation was available much earlier and the underlying markets were more transparent.

Let's get a few facts out of the way:
- York, as noted here, is pushing a right-wing nutjob fantasy. The racism is icing on the cake.
- Taibbi is funny, very funny. Still, he started with CDSs instead of CDOs. Sorry, Matt -- try again.
- delinquencies are nowhere near 20%, to say nothing of foreclosures; Q3 delinquency rate was over 6%, foreclosures around 4%. Those rates are high. 20% foreclosure rates would mean a depression.

The current crisis is not due to delinquency rates, however high, nor in isolation to any of the real culprits (CDOs, NSROs, CDSs, regulators, politicians, bankers, investors, sundry misbehaving fiduciaries), but to a network cascade involving all of these and causing a run on the shadow banking system and a subsequent panic.

There are plenty of villains, including Gramm. Still, the real problem now is the run and the panic. Check your 19th-century US history for how those work.

That said, York deserved what he got, and more. It's time to sow the fields where they grow his type with salt and plow them under.

Yeah, I should be clear: CDS as such had relatively little to do directly with Bear or Lehman going down. AIG is another matter, though.

Ginger,

I am prepared to believe this:

(a) When the underlying exposures, which were mainly AAA in themselves (regardless of the CDS) went bad, the monolines and insurance companies lost their ratings

In the next line you write that the exposures were AAA themselves. I'll believe this too, but I don't understand why the were rated this way.

It seems to me that while there are many people at fault, the single biggest wrongdoer in this situation. My sense is that the rating agencies act as a non-governmental regulator (which is to say they punish/reward per the rating, which has dollar implications). By failing to rate properly, they ended up rewarding the irresponsibility. Thoughts on this?

To quote Taibbi to doubting Thomas:
"The CDS market, this market for credit default swaps that was created in 2000 by Phil Gramm's Commodities Future Modernization Act, this is now a $62 trillion market, up from $900 billion in 2000."

g, NSROs are absolutely at fault, but the cossacks work for the czar. It's those who bought garbage CDOs (not all were, of course, but too many by far) based mainly on ratings alone whom I blame more.

Still, if this means S&P and its friends end up with a big ol' black eye, it couldn't happen to nicer people.

Oh, so York doesn't know what a credit swipe is, so Taibbi whipped his ass in the debate, so blaming this crisis the Community Reinvestment Act is bullshit...

Matt still confused the New Republic with the National Review.

"In the next line you write that the exposures were AAA themselves. I'll believe this too, but I don't understand why the were rated this way."

Basically because they were at the top of the capital structure of a given deal, and losses are taken from the bottom. So even if you have an objectively bad pool of assets, if you have enough "subordination" below your exposure, your position is in theory very safe. Other people will have to be wiped out before you are touched at all. Of course the sizing of the subordiantion and the ultimate rating all depend on assumptions about default rates and timings, and loss severities. Those turned out to be very wrong. Hence the AAA rating and hence the problems.

"It seems to me that while there are many people at fault, the single biggest wrongdoer in this situation. My sense is that the rating agencies act as a non-governmental regulator (which is to say they punish/reward per the rating, which has dollar implications). By failing to rate properly, they ended up rewarding the irresponsibility. Thoughts on this?"

This is a very complicated issue - I've written many thousands of words on it over the last year, so forgive me if I simplify and don't touch on all the angles. Basically, the agencies themselves would strongly reject the argument that they perform a "regulatory" function, but in practice they do. They're embedded in the regulatory framework around the world (against their strenuous objections, to be fair to them), whether it's through investment guidelines or capital adequacy rules, and they effectively have an oligopoly. Consequently issuers who want wide, cheap distribution need a credit rating from one or more of a handful of agencies, who all use more or less the same analytical methods (that's one of the simplifications). But with the exception of a handful of products (mainly CPDOs and CDOs of mezzanine RMBS, where they really were dangerously negligent or much worse), I'm very reluctant to single out the rating agencies as "the single biggest wrongdoer".

Like I say, the rating of subprime RMBS was based on assumptions that were shared by almost everyone in the market, and which seemed conservative to many people based on what little relevant historical data there was. The people who have had to make the biggest writedowns were the people who were pushing the most deals, which hardly fits the institutional conspiracy argument (which is not to say there weren't bad actors at the institutional or indiviudal level). Furthermore, and it's more of a reason than an excuse, the best analysts at rating agencies were constantly poached by the banks, leaving rating agencies with inexperienced, overworked staff.

Investors were often shockingly negligent in their investment decisions - a) just because something is triple-A doesn't mean you're free from non-credit risks, and b) even people who were buying much lower rated notes did not have the analytical capability to model their performance.

Lenders, even ones who didn't depend on securitisation and the rating agencies, made the same bad decisions about underwriting standards and house prices.

Borrowers took floating rate mortgages with teaser rates little to no regard of the possiblity that they might not be able to refinance if rates went up.

Politicians (in the US anyway) ignored the risky lending practices being undertaken and the Fed exacerbated the buildup of leverage with cheap money.

There's plenty of blame to go around, far too much to pin most of it on the rating agencies. But it's worth noting that there is a somewhat similar subprime market and housing crash in the UK, but because of the experience of the 1992 crash, rating agency assumptions were much more conservative and there is much less worry among experts about losses on the RMBS (and you didn't see the same highly leveraged CDOs of RMBS). Even under pretty severe scenarios (eg 30% house price declines over two years, 20% default rates), most investment grade tranches will be intact. The point being that the same incentives applied in Europe but the assumptions were different, being based on recent experience of a very severe crash, leading to better structures.

Howard do you read anything other then Ezra?

Acorn had it’s own mortgage broker, from their website;

“Welcome to the Acorn Housing Affordable Loans, LLC website. We are a non-profit mortgage broker, committed to finding you an affordable, low-cost mortgage product that meets your individual circumstances and requirements.”

If banks didn’t partner with them or give out these loans they sued them in court, see;

http://www.lewrockwell.com/dilorenzo/dilorenzo125.html
A man named Bruce Marks became quite notorious during the last decade for pressuring banks to earmark literally billions of dollars to his organization, the "Neighborhood Assistance Corporation of America." He once boasted to the New York Times that he had "won" loan commitments totaling $3.8 billion from Bank of America, First Union Corporation, and the Fleet Financial Group. And that is just one "community group" operating in one city – Boston.
Banks have been placed in a Catch 22 situation by the CRA: If they comply, they know they will have to suffer from more loan defaults. If they don’t comply, they face financial penalties and, worse yet, their business plans for mergers, branch expansions, etc. can be blocked by CRA protesters, which can cost a large corporation like Bank of America billions of dollars.

The purpose of CRA was to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods,. Congress passed a law that said banks had to make these loans you can’t even start to argue that they weren’t forced to make liar loans.

Holy jesus, that was funny. A bit too in your face, in my opinion, but I guess York deserved it. Especially the "tick tick tick" part, as I'm sure York realized he was totally busted. He really WAS trying to do a bit of research during the debate. And it's one thing to do that when you're trying to find details to support your arguments, but it's obvious that York realized he had no clue what he was talking about and finally did the research he should have done back when the crisis first came out. And Taibbi totally called him on it. That's great.

Joe S. do you often just make shit up?

"York is wrong and a liar. Only banks or bank affiliates (indirectly) are subject to the CRA. The worst crap was originated outside the banks--especially the outright predatory lending. Banks don't like to be associated with low subprime"

Fed Division of Banking Supervision and Regulation Director Roger Cole said that the Fed is concerned about and is monitoring the mortgage market; that less than half of subprime loans came from federally regulated banks hardly clean hands.

Fannie and Freddie owned 1 trillion of the 3 trillion in subprime loans. THe banks and government where neck deep in this

Oops. That long Anonymous post of 1:50pm is me.

'Anonymous', you need to post here more often when Ezra brings up credit markets and his commenters tie themselves in knots of deeply misspecified failure to comprehend. That said, I think you give the NSROs too much of a pass.

While not regulated utilities, they are as you noted oligopolists. Their de facto Royal Charter in my book gives them a de facto fiduciary role. While fiduciaries have historically been able to hide behind the everyone-was-doing-it defense, that has never absolved them of culpability, just of narrow, legal liability.

That said, as I argue above, the cossacks work for the czar, and investors who bought NSRO-rated product were employing them, if indirectly. 'Shockingly negligent' corresponds well with my understanding of many buyers.

And props for slipping CPDOs into the mix. Those beasts looked slippery the moment they came out, and yet were huge sellers. I worried.

Anon 1:50,

Let me start by saying thanks. I hope you'll excuse me for my ignorance (not meant sarcastically).

Next, I want to understand the basic outline of your response to the first point. Are you saying that AAA products result from the creation of AA, A, etc. products? Is this subordination?

Finally, ok, you've convinced me about the ratings agencies not being the "biggest wrongdoers". However, they seem to be a sort of chokepoint within the system.

What I mean is that some kind of extra protection here would have been the most effect for the least amount of effort, no? Every other party (investors, lenders, borrowers...even politicians) seem vulnerable to a self-interested disregard of the realities of risks.

I guess this goes to the following point I think you are making, but would like clarification on:

Would a conservative change in the assumptions by ratings agencies, ala the UK experience you cite, been sufficient to protect us from this situation (despite the sundry and very powerful interests unwittingly pushing towards a crisis situation)?

If it would be sufficient (and if I stop caring about blaming anyone), would it be reasonable to suggest that the best approach to ensuring that this doesn't happen again is by addressing the rating agencies first?

Ginger,

Ditto on the oops. BTW do you have a website? I'd be interested in reading some of said thousands of words.

"Taibbi isn't right about everything -- either in this interview or in general -- "

Ahh, good old fashioned egregious sensible liberal bus throwing. Don't know why you feel like you have to qualify your support on Taibbi in this instance by distancing yourself from generally.

Are we to assume in the future that unless qualified thusly, you agree with the people you endorse on everything?

The order of blame, in my book, is as follows:

- Greenspan keeps rates too low too long.
- Fed fails to provide even basic regulation to the independent mortgage brokers.
- Rating agencies make the junk CDO products into triple-A gold.
- Normal bond insurance companies (players in the muni market) decide to issue tons of insurance via CDS.
- SEC overturns a rule allowing the five major investment banks to exceed a 12-1 leverage ratio.
- CDS market grows and grows with no one watching, and no one has any idea what could happen with the system in the case of a major set of defaults.

Incidentally, the Gramm bill does explicitly mention CDS instruments as part of the deregulation - so I suppose it's a question of semantics - it wasn't regulated before, so it can't be deregulated. This is true - but the bill also explicitly said the market can't be regulated.

Btw, some excellent comments here - as someone who lived in the CDS industry for a while, I think there are some very well written pieces. I'd mention: Anonymous (@1:50pm) and Ginger.

Oh, and people that believe the CRA caused this are not looking at the data.

Nate,

"Congress passed a law that said banks had to make these loans you can’t even start to argue that they weren’t forced to make liar loans."

Actually, the CRA was drafted in an attempt to prevent "redlining," a common practice pre-CRA, wherein banks would draw lines around (mostly) minority neighborhoods and refuse to service those areas by providing mortgage loans. This, naturally, created a progressively crumbling social/housing infrastructure.

Is it your position that the banks were required to give loans to anybody trying to buy in these areas? They couldn't qualify applicants in ANY way? Seriously?

Also, since ACORN is a mortgage broker, they must be in big, big, trouble, right?

"BTW do you have a website? I'd be interested in reading some of said thousands of words. "

Not as such. I write for a subscription only financial newspaper. You'll need a few thousand euros to read most of my writing, but I do comment frequently on Naked Capitalism, Brad DeLong's blog and Crooked Timber whenever my areas of coverage come up, which is a lot at the moment.

"Are you saying that AAA products result from the creation of AA, A, etc. products? Is this subordination? "

Basically, yes. There's nothing that says you have to have a AA class below the AAA, but you need something (almost always - another simplification) and because of the economics it's usually AA, then A, then BBB and so on for as much risk as the sponsor is transferring. The actual ratings don't matter so much to the principle of the thing, it's just that each class protects the class above it (and all the classes above that) simply by virtue of its existence. Consequently you can get a very high rating no matter what the asset class, so long as you have enough subordination. The principle is in general sound, so long as you don't have too high correlation among the underlying assets, by which I mean the probability of default of one asset is not independent of the probability of default in the others. The more closely tied those probabilities are, the higher the correlation and the less effective the subordination. It doesn't matter how much subordination you have if you have a situation where if one asset defaults they all do, with zero recovery. You might as well have no subordination and get paid more. This was the fundamental problem with CDOs of ABS, and in particular mezz CDOs. Why the rating agencies and others thought the correlation was so low for BB rated RMBS I do not understand.

"Finally, ok, you've convinced me about the ratings agencies not being the "biggest wrongdoers". However, they seem to be a sort of chokepoint within the system.

What I mean is that some kind of extra protection here would have been the most effect for the least amount of effort, no? Every other party (investors, lenders, borrowers...even politicians) seem vulnerable to a self-interested disregard of the realities of risks. "

It probably wouldn't have hurt, but I don't agree it would have been the most effective. Like I say, the fundamental problem was false assumptions. No amount of regulation would prevent that, although arguably it could have captured some of the more egregious examples (eg the misrating of CPDOs) and mitigated some of the perverse incentives that permeate the financial industry.

And I think you underestimate the extent that rating agencies of all sorts are vulnerable to "self-interested disregard of the realities of risk". The really dangerous conflict of interest at the agencies wasn't the issuer-pay business model - that conflict is obvious and relatively easily policed. It was the motivation to expand ratings (and because of the way the market works, especially AAA ratings) to new products like subprime mortgages. Each new asset class represents a potential revenue stream, whether you're paid by issuers or investors, so there's a powerful incentive to rate products with little historical data.

Personally I think the single most effective piece of regulation would have been requiring investors in ABS (and indeed any complex security) to be able to demonstrate they have the capability to model and stress its performance/value independently of the rating agencies, something that is recommended on a voluntary basis in the recent "Corrigan report" and is being legislated by the European Commission for banks. It wouldn't have prevented people from making false assumptions and losing money on subprime, but it might have prevented the chaos that followed and then exacerbated the initial bout of rating downgrades and illiquidity. It wasn't so much that these bonds were downgraded that caused the crisis to be so bad - that is after all what you expect to happen in a housing crash. It's that far, far too many people bought them as trading assets without any real credit or fundamental value assessment, so they had no idea what a fair value was when they couldn't get a bid or quote. Now obviously that was not the only problem, but I do think it's the one where regulation would have been most effective, but until recently regulators have been very reluctant to mandate buy-side practices in detail. And with good reason, given what happened when they mandated certain ratings. Regulation is a tricky thing. Necessary, but full of unintended consequences.

I looked up that "Commodity Futures Modernization Act of 2000" thing that Taibbi was going on and on about.

Unless there's another one, the bill never became law.

So the whole argument was founded on BS in the first place.

Bilby - the bill was attached, at the last minute, to another bill. It is indeed law.

http://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000

"This act was incorporated by reference into H.R. 4577, an omnibus spending bill. It was passed by the 106th United States Congress and signed by President Bill Clinton on December 21, 2000; the legislation thus became law as a part of H.R. 4577 - Public Law 106–554, §1(a)(5)."

Ginger,

If you are still there I wanted to say thank you very much. I sincerely appreciate your time and effort in explaining this.

Not at all. There's a lot of misunderstanding and misunderstanding out there, and if we're going to fix this mess and produce decent legislation we need people to understand the mechanics of securitisation as much as possible.

Thanks, inthewoods. I see that now, but in that case was does Phil Gramm have to do with it? I looked up the action on HR 4577 bill and don't see his involvement.

Ezra clipped the next line:

"M.T.: Thanks. Note, folks, that the esteemed representative of the New Republic[sic] has no idea what the hell a credit default swap is. But he sure knows what a minority homeowner looks like."

And that's the point here.

Just to be clear, since the relevant part of the transcript isn't quoted here, Taibbi said this:

I mean, his onetime campaign co-chair and top economic adviser, Phil Gramm, basically created the credit-default-swap market back in 2000. Why shouldn't he get hammered on the financial crisis?

I can see Gramm is listed as one of the consponsors of S.3283, but see nothing of his involvement with HR 4577.

Bilby - as it says on the Wikipedia page:

"The Commodity Futures Modernization Act of 2000 has received criticism for the so-called "Enron loophole," 7 U.S.C. §2(h)(3) and (g), which exempts most over-the-counter energy trades and trading on electronic energy commodity markets. The "loophole" was drafted by lobbyists for Enron working with senator Phil Gramm[3] seeking a deregulated atmosphere for their new experiment, "Enron On-line."[4]"

Also from that same page:

"The companion bill (S.3283) was introduced in the Senate on Dec. 15th, 2000 (The last day before Christmas holiday) by Sen. Richard Lugar (R-IN) and cosponsored by Sen. Peter Fitzgerald (R-IL) Sen. Phil Gramm (R-TX) Sen. Chuck Hagel (R-NE) Sen. Thomas Harkin (D-IA) Sen. Tim Johnson (D-SD) and never debated in the Senate."

The "loophole" was drafted by lobbyists for Enron working with senator Phil Gramm

Don't forget a shout-out to Mrs. Gramm in this context--formerly in charge of commodity regulation; subsequently a member of the Enron Board . . .

And let's not forget, this was added *at night* on "the last day before the Christmas holiday" to a multi-thousand page omnibus bill. That's something to keep in mind when Broder-types point out the omnibus bill it was attached to passed 95-0...

Thom Jeff I’m familiar with red lining and wouldn’t argue CRA’s original intent. That being said CRA is another perfect example of what happens with you take 500+ idiots lock them in a building and let them write laws. They have no comprehension of the effects their legislation will have.

Yes I am saying banks where forced to make these loans without being allowed to apply the same underwriting guidelines they would anywhere else. Are you really so naïve as to claim charges of racism and redlining even begin at the individual level and not at the macro results? Companies are sued when they don’t employee a % of minorities not when one specific person is not hired. Banks where fined or mergers blocked when a % of their loans weren’t to inner city borrowers not when 1 individual was denied a loan. If you don’t know this you are sadly deficient in understanding of our legal/regulatory/and financial systems.

When you live off the government teat like ACORN you’re never in trouble unless the teator decides to stop feeding you. ACORN surprisingly with this latest round of voter/Registration Fraud just might have managed to accomplish that.

Nate, as usual, you show just how much of an uninformed ass you are. ACORN has been around for 38 years doing essentially the same thing that it is doing now. That being, registering low-to moderate income AMERICAN citizens to vote. The vast majority of that time without government assistance. They aren't going anywhere but up. You regressive idiots can attack the poor and working-class people, minority or otherwise, but they ain't going anywhere. They WILL be represented. Further, if it is your supposition that the CRA is to blame for this current mortgage mess, even though anyone with half-a-brain should be able to do the requisite research and have the requisite rationality to know that a law passed in 1978 would not have such dire first-time consequences 30 years later. But sorry, I forgot with whom I'm replying to.Anyway Nate, you keep wollowing in you FAUX NEWS ( And of course, this term is attributed loosely.) influenced mental miasma. The jig is up. You and your ilk are on the way to fringe foundry where you have always belonged. Have fun with the rest of your bigoted has-beens. America is getting ready to move into it's multicultural, multi-ethnic, progressive moving, future. BACK TO 1880 HEATHEN!