>I've read it. Did you?

Yes.

>It's interesting that you think that the fed isn't part of >govt and that repealing Glass-Steagall isn't either. Also, >the ratings monopoly is also a govt creation. (Yes, folks >could consider other things, but their ratings determine >what counts for "assets" for regulated entities.)

When did I ever say that the Fed isn't part of the government or that repealing G-S doesn't matter? And the rating agencies were definitely part of the problem. But here's the problem - your basic argument is that the government promoted subprime mortgages. For evidence, you cite a document which purports to say that banks and mortgage companies were forced to lend, thus causing the subprime bubble.

This idea, of course, isn't backed up by the data (as I've shown). Now if you want to move the goal posts and talk about G-S, or the Fed, I'm all ears - they definitely contributed to the subprime bubble. But the idea that the government forced banks and mortgage companies to make loans is just crap.

In fact, it is the lack of government regulation that really caused the bubble. If the Fed had just required confirmation of income, then the bubble would have been stopped in its tracks - but Greenspan refused to make the modifications. When Obama came in, it was among the first regulations put into place.

>Most items in the list in that article have govt's >fingerprints all over it, and it's hardly complete. For >example, it ignores fannie and freddie, the various >efforts to encourage home ownership, and the like.

Again, you have not presented evidence that Fannie and Freddie caused the subprime bubble. They were, in fact, losing marketshare during the bubble, while Wall Street took over the function of securitization. Are Fannie and Freddie messed up? Yes, but they didn't cause the subprime bubble.

>Are you really arguing that regulated entities don't >follow the rules? >If so, you don't get to argue that different rules would >have made a difference.

Of course I can - it's called enforcement. Some laws are enforced, other are effectively ignored. So it's a combination of both rules + enforcement. Witness the SEC not enforcing rules on Wall Street banks. Just today, a judge rejected the settlement offer from the SEC to Citibank, while pointing out that Citibank has repeatedly broken the law, and yet the SEC had not done anything about it - even though they knew Citibank had broken the law. Under Bush, the SEC become a toothless entity - it's gotten somewhat better under Obama, but it is still a captured agency in my mind.

Are you seriously claiming that mortgage lenders ignored the nondiscrimination enforcement threats? You remember them - there was an offered safe harbor for making subprime loans. There were also demonstrations against lenders that weren't offering enough minority loans - do you really think that they had no effect on enforcement?

Note - I didn't say that there was one cause, so it's unreasonable to suggest otherwise. I'm pointing out that the subprime aspect is directly traceable to a series of govt policies.

No I'm saying that the lenders needed no government encouragement at all - they were making the loans because they were making money hand over fist. Simple. The government didn't force them, greed did.

Are you arguing that Countrywide made all of their so-called liar-loans based on the threat of government sanction? If yes, what percentage of loans were forced, by the government, under enforcement threat? Where's your data?

Since I can't reply any more to the thread:

>Govt had a big part in making things so that so that subprime loans made money.

So you're no longer arguing that the government forced banks and mortgage companies to lend?

>The standards for regulated assets, which is what banks really need, are established by govt. Those standards favored Fannie and Freddie. Those standards also rely on govt-chosen rating agencies.

Yes, they are set, but it was a lack of regulation that caused the problems, not too much regulation. Those standards had nothing to do with Fannie and Freddie. The government rating agencies is completely separate issue.

>As to the "encouragement", W was the "ownership" president, so he was looking for ways to encourage lending.

Again, are you no longer saying that the government forced lenders to lend?

Govt had a big part in making things so that so that subprime loans made money.

The standards for regulated assets, which is what banks really need, are established by govt. Those standards favored Fannie and Freddie. Those standards also rely on govt-chosen rating agencies.

As to the "encouragement", W was the "ownership" president, so he was looking for ways to encourage lending.

> So you're no longer arguing that the government forced banks and mortgage companies to lend?

Not at all.

The govt actions to make subprime profitable merely meant that there wasn't as much reason to say "i'm not sure that this makes sense".

Very different assertion from saying that the government forced them to lend via a policy which used discrimination as its basis. I'll take it that you've given up on that point?

As I said, no.

Govt said that if your loan portfolio doesn't contain enough loans to certain people, you'll be shut down.

Govt then tried to make those loans make economic sense.

Yes, some folks arguably would have made those loans otherwise, but some wouldn't.

So if it had such a big impact, it should be easy to show data to support such a claim. Where is your data?

And you're attempting to move the goal posts once again here - by merging the two categories. Face it, you have zero evidence to back up the idea that the government actually EVER forced a bank or mortgage company to make loans. Trying to now say "the govt then tried to make these loans make economic sense" is just a junk argument.