Comments on: FDIC Chairman Sheila Bair on CRA: NOT Guilty

By: BG

BG — Sat, 06 Dec 2008 01:40:16 +0000

Yeah, that’s right! We need to get rid of anyone who makes a god-damn lick of sense!!

This nation is nothing but a bunch of fucking idiots!! And you think all of this was brought down because of CRA? What a bunch of dumb-asses. Haven’t you figured out anything yet??

Or are you a part of the scheme looking for any cover you can find to cover your asses? We are not idiots out here. We know WTF is going on!! You bastards dream up your little GD schemes but don’t have the balls to admit it when you are caught red-handed. You are a bunch of greedy bastards! Even have the audicity to ask for the tax-payers to bail your sorry asses out!! Go fuck yourself!!

You are lucky you are not in jail right this moment for what you greedy fucks have done to this Country!!

Leave Shelia Bair alone. She speaks the truth!!

By: ben22

ben22 — Fri, 05 Dec 2008 22:19:16 +0000

this probably means that Bair will be out of her positions before the end of 2009, that’s my prediction. She’s making too much of the wrong kind of noise for someone at that post. It’s a shame because she’s of course correct.

By: RiskAverseAlert

RiskAverseAlert — Fri, 05 Dec 2008 22:14:57 +0000

Bill Ackman for all intents and purposes made the same case as Sheila Bair in her closing remark... The Charlie Rose Show 11.11.08

By: DeDude

DeDude — Fri, 05 Dec 2008 18:21:11 +0000

twshore; OK I shall accept your and the hedge funds claim that this particular thing was created exclusively to help fulfilling CRA requirements and that idiot bankers who can’t see that it is pure s**t may end up buying it, rather than fulfilling their CRA requirement with sound and solid lending of affordable loans to poor people. However, in the big picture, the question must be how big a contribution to a problem is CRA. Barry had a great piece about that a few days ago: http://www.ritholtz.com/blog/2008/12/kroszner-cra-the-mortgage-crisis/ where he had a link to a speech by Krozner: http://www.federalreserve.gov/newsevents/speech/kroszner20081203a.htm that told us their studies had found: “Only 6 percent of all the higher-priced loans were extended by CRA-covered lenders to lower-income borrowers or neighborhoods in their CRA assessment areas” (and nobody can say how many of those were actually giver to comply with CRA and how many were just given for the same “to pig-out-on-the-poor-suckers” reasons that the other 94% were given. The studies also showed that: “less than 2 percent of the higher-priced and CRA-credit-eligible mortgage originations sold by independent mortgage companies were purchased by CRA-covered institutions”. Meaning that you just avoided being part of the unlucky 2%, but you were lucky enough to have observed and been able to report on this extremely rare phenomenon. Again remember that since they cannot document the actual motivation of those buying the paper; the 2% (like the above 6%) are absolute maximums of the CRA induced piece of the trouble. It may also be that the CRA institutions purchased their 2% of the problem paper for the same “to pig-out-on-the-poor-suckers” reasons that the other 98% were purchased by non-CRA buyers. Quite frankly my pissing in the Mississippi river may have contributed to the great flooding of 1994, but nobody discussing the cause of that flood would think that it was worth mentioning.

By: bernandoo

bernandoo — Fri, 05 Dec 2008 18:18:44 +0000

perhaps this will jog people’s memory:

http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&scp=1&sq=fannie%20mae%20bill%20clinton&st=cse

By: karen

karen — Fri, 05 Dec 2008 17:52:28 +0000

Well, if CA hadn’t passed Prop 8, we would already be on our way out of the housing crisis.

http://www.funnyordie.com/videos/c0cf508ff8/prop-8-the-musical-starring-jack-black-john-c-reilly-and-many-more-from-fod-team-jack-black-craig-robinson-john-c-reilly-and-rashida-jones

By: twshore

twshore — Fri, 05 Dec 2008 17:43:41 +0000

Dedude, you don’t buy it b/c you don’t understand it. I’m not going to sit here and waste three paragraphs explaing non-bank mezz financing and orgination. The banks are taking most of the risk. Yes, they are going to lose money. THAT’S THE ENTIRE POINT. No, it’s not illegal. They know exactly what they’re doing and so do the guys originating the loans.

The hedge fund doesn’t “own” anything…they will get paid a boatload of fees.

And yes…CRA is the only reason the deal exists. They’re quite upfront about this.

And lastly, don’t go badgering and disparaging people you don’t know about their ability to comprehend or understand a deal. My p&l this year…..positive (a lot of it from shorting BS commerical RE and LBO deals). How’s yours?

By: DeDude

DeDude — Fri, 05 Dec 2008 17:35:05 +0000

twshore; Why do you think that hedgefund originally bought the c**p they were trying to unload on you? My guess is that they figured it would be a great way to harvest some of the home-value increase from those succers that had been sold on those sub-prime loans. The hedge fund certainly did not purchase it because of its “CRA-value”, right?. So even if the hedge fund pointed to that nice little CRA-Barbie sticker on their c**p, CRA had nothing to do with why it originally was put together, by someone else, and purchased by the idiot that managed the hedgefund. So I just don’t bye your “example of how CRA is contributing to the problem”.

By: twshore

twshore — Fri, 05 Dec 2008 17:24:55 +0000

Dedude – hell no I didn’t take it. Jesus, you people kill me. I laughed at the guy and asked him how I could find the non-bank finance providers so I could short the stew of the debt. Didn’t I explicitly say the management team running the deal is the only group of clowns that stand to make ANY money from this?

And Barry, I said I mostly agree with you. However, I gave you a concrete example of how CRA is contributing to the problem. As I said…it is the three of the largest banks of the street. I acknowlege CRA was not THE problem or even close. However, the deal I mentioned is live and funded and originating garbage right now. There are tax and regulatory benefits. You all can say it has no impact until you’re blue in the face. You’re wrong and gave you evidence. On the flip side those on the “right” of the political spectrum can blame entirely CRA for the mess. This is also idiotic and false but is in line with their agenda.

By: DeDude

DeDude — Fri, 05 Dec 2008 17:14:16 +0000

And if the only reason CRA covered banks actually gave shaky loans was because of the fear of violating CRA, why would those 75% of shaky loans by non-CRA-cover institutions have been given. I mean if the only (or the main) reson to give these shaky loans were fear of CRA, why would the other guys have done it. No ALL of these loans were given because they had fat fees and fat profits in them as long as the housing price increases and ship-the-risk-downstream gravy train was working. And for those employees and CEO’s getting fat on this gravy train, it didn’t matter that one day it would end realy bad for the company. They would have harvested their big juicy piece of the pie and always planned on finding some other kind of company and scam to feed on when this one stopped working.

The first thing we need to do is to ensure that all compensation of CEO, CFO etc. in the form of stocks must be real paper stocks and must be locked up for 10 years (with a ban on any kind of loan or pre-selling of them). We must demand that at least half of any compensation in excess of 500K/year comes in the form of these locked up stocks. No public pension or tax-deferred/free funds can be invested in companies not following these rules. That way the interest of the executives will not be a short-term fake boast in the company, but its long-term survival.

twshore; yes and I had a guy pitch me a bicycle with a flat tire as an economic Cadilac and one of the things he pointed to was a nice little Barbie sticker on the broken bell. But it didn’t make me buy it anyway. I am sure that crocks will use any and all arguments that they think might have the smallest chance of selling the product. However, only an idiot would take it – did you ?