What caused our current economic crisis?

[ZAGGNUT1]

law professor Michael S. Barr, a Treasury Department official under President Clinton, stated that a Federal Reserve survey showed that affected institutions considered CRA loans profitable and not overly risky. He noted that approximately 50% of the subprime loans were made by independent mortgage companies that were not regulated by the CRA, and another 25% to 30% came from only partially CRA regulated bank subsidiaries and affiliates.

[ZAGGNUT1]

-in November 2009 that 55% of commercial real estate loans were currently underwater, despite being completely unaffected by the CRA.

-In a Bank for International Settlements (BIS) working paper, economist Luci Ellis concluded that "there is no evidence that the Community Reinvestment Act was responsible for encouraging the subprime lending boom and subsequent housing bust"

-----> RE-READ THE bottom of that page of the [CRA] community reinvestment act

[Decenium]

what da song be?

[ChristianIce]

I think that corporations own politicians, and thinking that they own half of them all on one side is naive.

I think also that you don't have to choose between the responsability of bad government OR bad free market, but ADD one responsability to the other.

Government made bad choices, banks took advantage and made profit out of it.

The history of "bad banking" is the same throughout history, they don't care who is in charge, cause MONEY is in charge all the time.

[torniai]

Not too many people interested in knowing how the government makes mistakes, takes our money to solve them and blame banks alone. LOL

[mikemay54]

genius!

[feelzthelove]

This economic crisis was manufactured by the powers of both parties. The current leaders of the Democratic party including Dodd and Pelosi, Frank, Obama and many others are tying up the loose ends. When they have the health care reform in the bag, the rest of the plan comes into play. Americans will be subjected to horrendous taxes and penalties. Our government will force us to pay for the debt. We will be at the mercy of our government and what kind of country will it be then?

[Scoforever]

The CRA was a very smal part of it though. The main causes were the fractional reserve banking system and low interest rates. Sometimes you even had negative interest rates.