Monday, September 22, 2008

More "conservative" Incoherence: Poor people broke Wall Street

From this incoherent airhead: A link to this deranged, ranting piece of shit.

The Wall Street meltdown was caused by US liberal politicians forcing banks to loan money to poor people.

That's right. But go ahead, read it again: The Democratic Party, those champions of pure, unadulterated socialism, FORCED the most powerful financial entities on Wall Street to destroy their balance sheets, and loan money to poor people in the subprime markets with the Community Reinvestment Act (CRA) to the extent that they were driven into bankruptcy. The po' widdle Wall Street giants cried and wailed but there was nothing they could do. In a country like the United States, capitalism simply can't defend itself against the power of socialist ideas.

The only problem with Mark Levin's thesis is that it isn't a thesis. It's complete and utter crap. But what can you expect from a brainless psychopath whose claim to fame is being an advisor to the incompetent and criminal Reagan administration, and Chief of Staff to sleaze-bag Edwin Meese?

The facts, facts, facts, are that the vast majority of subprime loans had little or nothing to do with the CMA:

Problem is, half of the subprime loans came from mortgage companies with no CRA involvement at all. Another 25%-30% came from companies with very little CRA exposure. For those who left their abacus at home, that's 80% of the loans which were fully or largely outside CRA jurisdiction. More than that, the non-CRA mortgage firms made subprime loans at twice the rate of CRA -covered firms.

The might be hard to understand, so I'll try to repeat for the sake of clarity: 80 percent of the subprime loans were made by institutions with little or nothing to do with CRA legislation.

Once again, the right-wing scans desperately and pathetically for any fucking excuse to escape their own responsibility.

This little quote from commondreams points to the main culprit:

In 1999, President Clinton signed the Financial Services Modernization Act, which tore down Glass-Steagall's reforms by removing the walls separating banks, securities firms and insurers.

A generation ago, banks, credit unions and S&Ls issued home mortgages that they retained on their books as an asset. The lenders had a stake in receiving full repayment of the loans from creditworthy borrowers.

But in recent years, mortgages began to be sold to firms that cobbled the loans together to create mortgage-backed securities, or mortgage bonds. Loans to the least creditworthy borrowers carried
the highest risk but gave the highest returns, so banks and other institutional investors bought loads of them.

Did'ja get that Levin? Shut-up!! I'm trying to educate you!! Nobody forced those "investors" to load-up on junk! They did it themselves, thanks to the bipartisan miracle of deregulation of the financial sector.

*Except make billions of dollars peddling garbage to the world.

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