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What, no thread on the banks?


Robert J

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The argument that the government pressured mortgage companies into giving low-income people home loans is bullshit.

Amen.

No, it's not BS. The government definitely did. I just don't think that it played a significant role in what was ultimately, for a while, an extremely profitable industry.

Guy

Why not BS? I'd really like to know.

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The argument that the government pressured mortgage companies into giving low-income people home loans is bullshit.

Amen.

No, it's not BS. The government definitely did. I just don't think that it played a significant role in what was ultimately, for a while, an extremely profitable industry.

Guy

Why not BS? I'd really like to know.

Chuck, Jim and Bruce, I read on Digg late last night that Larry Kudlow made the same point I was making about this govt coercion on CNBC's Morning Joe Show yesterday.

As I see it, this was simply a case of a politican (Clinton) paying back a constituency without whose help he wouldn't have been elected (the blacks). As far as I know, this has been going on since the days of Andrew Jackson. I see it as politics as usual rather than some sinister racial deal.

I suspect, though, that the problem in this case was that not only were the blacks able to take advantage of the new easier credit standards, but also speculators and house flippers; thereby significantly increasing the number of people who obtained loans who shouldn't have.

I see another factor that I haven't heard any of the talking heads talk about, but one which I have been railing about for two decades. A huge number of Americans were looking at their homes as an investment. And with the consistent increase in real estate values since ca. 1945, people came to see the investment as one that couldn't lose.

So they would agree to any price. I have heard commentators this week say that people bought "too much house" as if they were being extravagant. In fact, I think that the value of modest homes has been far too high.

As I see it, a home is a consumer good, not an investment. And anybody who thinks that an investment is a can't-lose proposition is a fool.

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