patrick.net

You have to throw in the government transfers to the lowest quintile as that does not show up in any gov't stats. IOW the lowest quintile is a lot richer than the stats state.

indigenous says

mell says

He dismantled the middle-class

I don't see that, it is more of a liberal meme than fact.

Look at the tables on this page, I see no indication that the middle class is disappearing.

https://www.census.gov/hhes/www/income/data/historical/household/

As you know inequality is another matter, which certainly grew under O's watch, but economics is not a zero sum game.

Yeah it depends on how middle-class is defined. I usually refer to the wage-slaves, which are either upper middle-class or even considered upper class by some, but certainly they are much closer to the poor house then to the uber-wealthy. Those are disappearing, the lower middle-class which is often already government dependent is doing ok. That's not a sustainable model though.

mell says

Yeah it depends on how middle-class is defined. I usually refer to the wage-slaves, which are either upper middle-class or even considered upper class by some, but certainly they are much closer to the poor house then to the uber-wealthy. Those are disappearing, the lower middle-class which is often already government dependent is doing ok. That's not a sustainable model though.

The point is that the middle class is doing better than the past, those are the numbers...

This meme adversely taints many people's thinking.

The overarching driver of the world economy is the American economy, the most successful in history.

The Fed's QE amounts to 6% of the money supply, IOW the market will trump the Fed and even the government spending. Until 2030.

indigenous says

mell says

Yeah it depends on how middle-class is defined. I usually refer to the wage-slaves, which are either upper middle-class or even considered upper class by some, but certainly they are much closer to the poor house then to the uber-wealthy. Those are disappearing, the lower middle-class which is often already government dependent is doing ok. That's not a sustainable model though.

The point is that the middle class is doing better than the past, those are the numbers...

This meme adversely taints many people's thinking.

The overarching driver of the world economy is the American economy, the most successful in history.

The Fed's QE amounts to 6% of the money supply, IOW the market will trump the Fed and even the government spending. Until 2030.

They are doing worse if they are not receiving any government transfer money due to inflation and accumulated debt from education and rising taxes. If you want an economy that was doing well - albeit in unsustainable overdrive - you have to go back to the late 90s and the internet bubble. You don't see any of that today but they would show more irrational exuberance if they could.

mell says

They are doing worse if they are not receiving any government transfer money due to inflation and accumulated debt from education and rising taxes.

The tables are inflation adjusted. Don't know on the taxes.

mell says

If you want an economy that was doing well - albeit in unsustainable overdrive - you have to go back to the late 90s and the internet bubble. You don't see any of that today but they would show more irrational exuberance if they could.

It seems to me that all irrational exuberance is caused by central banks, I have even read that the tulip bubble was caused by them.

As you know, that is not a problem if the Fed does not meddle with it's cronies and the market.

But again the driver is the American economy almost twice the Chinese economy.

indigenous says

It seems to me that all irrational exuberance is caused by central banks, I have even read that the tulip bubble was caused by them.

That's BS. Everyone knows the tulip bubble was caused by the CRA

You mutts will not let go of the CRA thing, despite the fact that I have proved your ignorance over and over.

indigenous says

You mutts will not let go of the CRA thing, despite the fact that I have proved your ignorance over and over.

Your definition of proved doesn't match anyone else on the planet's definition of the word.

bob2356 says

Your definition of proved doesn't match anyone else on the planet's definition of the word.

indigenous says

bob2356 says

Your definition of proved doesn't match anyone else on the planet's definition of the word.

If you feel it's true than it must be true. After all if a butterfly flaps it's wings in america it COULD cause a typhoon in the pacific. I read that on a blog so it must be true.

BTW here is the explanation not that one of you mutts could be bothered to listen, if you are really interested read his book.

http://www.youtube.com/embed/A6ghZDMQaZo&list=UUsgWR55UyAiFarZYl1u1l9Q

BBTW did you ever read the great deformation that you claimed you would, what 9 months ago? The only thing I see you post is carping, snide remarks.

indigenous says

BTW here is the explanation not that one of you mutts could be bothered to listen, if you are really interested read his book.

Why is it that you have to post videos instead of simply offering an argument yourself? I don't have time to watch your idiotic videos....

"Why is it that you have to post videos instead of simply offering an argument yourself? I don't have time to watch your idiotic videos.."

Did you eat a lot paint chips as a kid?

If you really have a short attention span then just listen to 20 minutes to 22 minutes.

Or this:

Did the Community Reinvestment Act (CRA) Lead to Risky Lending?
Online access to NBER Working Papers denied, you have no subscription

Sumit Agarwal, Efraim Benmelech, Nittai Bergman, Amit Seru
NBER Working Paper No. 18609
Issued in December 2012
NBER Program(s): AP CF
Yes, it did. We use exogenous variation in banks' incentives to conform to the standards of the Community Reinvestment Act (CRA) around regulatory exam dates to trace out the effect of the CRA on lending activity. Our empirical strategy compares lending behavior of banks undergoing CRA exams within a given census tract in a given month to the behavior of banks operating in the same census tract-month that do not face these exams. We find that adherence to the act led to riskier lending by banks: in the six quarters surrounding the CRA exams lending is elevated on average by about 5 percent every quarter and loans in these quarters default by about 15 percent more often. These patterns are accentuated in CRA-eligible census tracts and are concentrated among large banks. The effects are strongest during the time period when the market for private securitization was booming.

And this:

At the same time, political movements promoting home ownership and income transfers to the poor in the form of subsidies for home ownership gained wider support. Community activist groups such as the Association of Community Organizations for Reform Now (ACORN) that had long advocated lowering lending standards to those in poor, and often black, neighborhoods found a champion in newly elected President Clinton. Under Clinton, the Community Reinvestment Act (CRA) was strengthened and Fannie and Freddie where mandated to increase the number of subprime mortgages on their books or that they guaranteed. To do so, they dramatically lowered their mortgage lending standards for everyone (3 percent down payments, no documents of income, etc.).

In exchange for lowering their mortgage standards, the GSEs – by then privately owned – were exempted from normal capital standards and implicitly guaranteed by the government – made explicit when they were later declared bankrupt. In July of 1999, President Clinton bragged that: “Over 95 percent of the community investment … made in the 22 years of that [CRA] law have been made in the six and a half years that I have been in office.”3

The final plank in this tawdry story – which was much nastier than summarized here – was the need for the Federal Reserve to approve bank mergers and acquisitions on the basis, in part, of an assessment of the acquiring bank’s performance in achieving CRA goals of increased subprime lending. Banks joined with the likes of ACORN in order to expand such lending, in exchange for which such organizations supported the banks’ merger and acquisition applications.

It is acceptable to invest in riskier assets if banks increase their capital cushion appropriately. In the days of largely unregulated banking and no deposit insurance, banks held capital of 40 to 50 percent of their assets in order to convince depositors that they were safe. But today’s regulated banks were able to manipulate their mortgage business (via the GSEs and securitization) to avoid any regulatory requirements to increase capital. Bank shareholders were willing to go for the expected higher, but riskier, return and creditors were willing to let them because of deposit insurance and the expectation of a government (tax payer) bailout if things went wrong, as they subsequently did.

The government could not require banks to increase their capital against riskier mortgages without undermining its policy of promoting (subsidizing) those mortgages, a conflict of interest with devastating consequences.

The otherwise inexplicable collapse in lending standards and the financial crisis that followed is explained by the economic rent sharing collaboration between political groups like ACORN, the government, the GSEs, and the emerging megabanks to promote home ownership among those previously unable to qualify for a mortgage. The government and its political supporters achieved their political objectives via mortgage subsidies without adding line items to the Federal budget, until the bailouts were needed. Fannie and Freddie gained huge profits for a while, and high salaries and employment for political friends, backstopped by government guarantees.4 Megabanks achieved (bought) the Fed’s approval of their merger goals while shifting the risks onto the taxpayers. Is that sleazy or what? It is called crony capitalism to distinguish it from the real thing.

http://www.compasscayman.com/cfr/2014/10/31/Charles-Calomiris-and-Stephen-H--Haber--Fragile-By-Design-/

And 45 minutes later, here is Bob's response:

http://www.youtube.com/embed/Re72di5phM0

So Tat:

indigenous says

We find that adherence to the act led to riskier lending by banks: in the six quarters surrounding the CRA exams lending is elevated on average by about 5 percent every quarter and loans in these quarters default by about 15 percent more often. These patterns are accentuated in CRA-eligible census tracts and are concentrated among large banks. The effects are strongest during the time period when the market for private securitization was booming.

Excellent--so please explain how this 5% increase in lending in ONLY the CRA-eligible census tracts led to the housing bubble.

Focus on how it caused housing prices to rise in non-CRA areas where the bubble was most prevalent.

indigenous says

The otherwise inexplicable collapse in lending standards and the financial crisis that followed is explained by the economic rent sharing collaboration between political groups like ACORN, the government, the GSEs, and the emerging megabanks to promote home ownership among those previously unable to qualify for a mortgage.

lol--how is it explained? Why did a program designed to help low income families in specific red-lined areas cause private institutions not regulated by the CRA to make risky loans in non-redlined areas? Help me out with that question.

indigenous says

So Tat:

My thoughts exactly. Hard to believe there are still people out there that believe the CRA had anything to do with the housing bubble.

Read what I posted it explains very well. In a nutshell it has to do with a culture being setup by the Fed to prove that a bank was a "good citizen" which the banks spent a couple trillion dollars on which fomented these citizen groups to get in on the free money. The CRA was a seminal agency to this end.

The other factor is that if the banks lowered their standards for one group they had to lower it for all groups

And another factor is that the government would pickup any loses from these type loans. So there was no danger to the bankers losing.

Read the material, I'm not your teacher, do the work...

indigenous says

Read what I posted it explains very well. In a nutshell it has to do with a culture being setup by the Fed to prove that a bank was a "good citizen" which the banks spent a couple trillion dollars on which fomented these citizen groups to get in on the free money. The CRA was a seminal agency to this end.

So, how did it apply to the savings and loans that weren't subject to CRA at all??

And how did giving loans to underqualified folks in affluent neighborhoods give the "good citizen" proof?

Obviously you're not the teacher, I'm trying to show you why you and your BS sources are 100% incorrect.

"So, how did it apply to the savings and loans that weren't subject to CRA at all??"

Now I remember why I have you on ignore...

indigenous says

"So, how did it apply to the savings and loans that weren't subject to CRA at all??"

Now I remember why I have you on ignore...

Because you lose every debate?

"Because you lose every debate?"

No because I have a policy not to argue with idiots.

I will not respond any more as I'm going to my happy place.

indigenous says

"Because you lose every debate?"

No because I have a policy not to argue with idiots.

I will not respond any more as I'm going to my happy place.

Enjoy.

indigenous says

Did the Community Reinvestment Act (CRA) Lead to Risky Lending?

Online access to NBER Working Papers denied, you have no subscription

Sumit Agarwal, Efraim Benmelech, Nittai Bergman, Amit Seru

NBER Working Paper No. 18609

Issued in December 2012

NBER Program(s): AP CF

indigenous says

Yes, it did. We use exogenous variation in banks' incentives to conform to the standards of the Community Reinvestment Act (CRA) around regulatory exam dates to trace out the effect of the CRA on lending activity. Our empirical strategy compares lending behavior of banks undergoing CRA exams within a given census tract in a given month to the behavior of banks operating in the same census tract-month that do not face these exams. We find that adherence to the act led to riskier lending by banks: in the six quarters surrounding the CRA exams lending is elevated on average by about 5 percent every quarter and loans in these quarters default by about 15 percent more often. These patterns are accentuated in CRA-eligible census tracts and are concentrated among large banks. The effects are strongest during the time period when the market for private securitization was booming.

This means exactly nothing. It's a paragraph from a paper no on can see. Post a link to the whole paper so we can see what the terms mean and what the research is. Otherwise it's a joke.

indigenous says

And 45 minutes later, here is Bob's response:

Sorry some of us have lives.

bob2356 says

Post a link to the whole paper so we can see what the terms mean and what the research is. Otherwise it's a joke.

Simply copy and paste the text into google. The others are linked. Which substantiates it more than you mutts have ever substantiated anything on the subject.

The only thing I remember is AF posting something anecdotal from one of his coworkers.

Obama can't magically fix everything man. He is a president, not a miracle worker.

indigenous says

bob2356 says

Post a link to the whole paper so we can see what the terms mean and what the research is. Otherwise it's a joke.

Simply copy and paste the text into google.

Doesn't work, all that comes up is the same 1 paragraph. Since it works so well for you post the link.

indigenous says

The others are linked.

Yes, and just like last time they don't do anything but say the moon is made of green cheese. No research of any kind, No footnotes, No sources, No links. No data. No methodology. Nothing, nada. Just I feel it's true so it must be true. I can see why these appeal to you a lot.

Like I said your definition of prove is certainly unique, quite unlike anyone else's in the known universe.

Here is the link to the website for the book fragile by design:

http://press.princeton.edu/titles/10177.html

indigenous says

Here is the link to the website for the book fragile by design:

http://press.princeton.edu/titles/10177.html

That's nice, if you've read it then you should be able to lay out your arguments without cutting and pasting the review off a website.

We were talking about the NBER paper cut and paste. A single paragraph with zero context means nothing. Except to you, where if PROVES beyond a doubt.

bob2356 says

That's nice, if you've read it then you should be able to lay out your arguments without cutting and pasting the review off a website.

Bullshit, I'm not that interested to read a book on the banking industry in the world.

I got the gist of it by listening to the podcast, hell 2 minutes covers the main point, from about 20 to 22.

https://www.youtube.com/watch?v=A6ghZDMQaZo

Besides I have laid it out in my own words in the above posts...

There are no feelings about it, just the facts.

Unlike you, I have solidly backed my argument up...

indigenous says

Unlike you, I have solidly backed my argument up...

I'm not even sure you know how to make an argument, much less back it up.

http://research.stlouisfed.org/wp/2012/2012-005.pdf

finehoe says

http://research.stlouisfed.org/wp/2012/2012-005.pdf

Fuck you here is a link with 30 pages of yik yak.

Where they say:

"Although we find evidence that the GSEs bought significant quantities of subprime securities, our
results indicate that these purchases were not directly related to affordable housing mandates"

They are missing the point I'm making in that the standards were raised across the board.

They are also missing the point that the CRA indirectly created more lending to unqualified people across the board, because there was no risk for the bankers, as the government tacitly and by implication of the system, "fragile by design", removed risk by backstopping any such loans.

The reason the banks did this, beside the obvious reason to make more money, was to further grow and centralize banking.