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Joined: 3/13/2011
Msg: 1
Are you chopped liver?Page 1 of 2    (1, 2)
Have you heard of Fractional Banking?

When you or 6 billion other people on the planet deposit $100 000 into the bank this is what happens. Because of this F.R. system, this bank is now allowed to punch into their computer about $900 000 extra now being theirs on top the $100G you put in. So in other words for every dollar deposited they can create nine dollars just like that. They don't need to have that in their vault but they can indicate they have it in spite of it not being anywhere near the bank.

Your son, fresh out of college, wants to pay off his school debt, and get money for his upcoming wedding and buy that house for his new wife-and-kids-to-be.

Goes into the bank asks for $600 000. They say sure we've just received $100 000 so we've got an extra $900G to loan out. We will loan you from that extra 900G that we just created but don't really have in paper money/gold/silver or anything. The actual real $100G we'll keep for other uses.

Your son, smiling like a cougar eating sh*t out of a gumboot, walks away knowing he's got it made. He's being the perfect provider. Now he just has to make the monthly payment.

So your son, wife, kids, house, cars, possessions are a neat package involved in a life to repay the $600G+ .

Do you get what I just conveyed?

The bank gave your son something they didn't have, never will, doesn't exist, is not in paper money anywhere, in any bank anywhere. They punched $600G in their computer exactly, and I'm not exaggerating, just as I have punched in this paragraph. It's didn't get stored anywhere on paper documents at pof HQ.

So now for something for which they didn't have, as they said they're keeping the $100G, they are saying we want it back, all $600G of it and not only that we're charging you interest on that.

Your son's family will work hard, honestly and proudly to pay something back that the bank never had. The initial $100 000 the bank possessed yes but the $600 000 they gave your son to give back to them was just created out of thin air and I shake my head here, your son plus 6 billion other uninformed people on this planet are paying back.

This is retarded.

Don't go blaming the banks. Don't go blaming your favorite gov't party.

All those in the Good Ol Boys club of running the world have the same right as you to manifest their desires in which ever way they see it as a benefit to themselves and to those they interact with in regular everyday life even if it is, in this case, planetary slavery not to mention deceit. I say planetary because the whole planet operates within this system/slavery.

If you don't want to spend your life worked to the bone for this fraud/waste instead of soaring even higher and reaching un-heard of goals or feeling like a million bucks every moment of every day, POINT THE FINGER AT YOURSELF, not in recrimination but in FORGIVENESS of yourself for not paying attention to this stuff in life and then GO FORWARD from there.

The big picture. You pay back your mortgage. No problem. It's done, End of story. Life goes on. Or default, do bankruptcy, don't pay it back whatever.

Take this away from you now.

6 Billion people on our planet are, at this point unwittingly embroiled in this scheme of being busy paying back pretend money that is not there and shouldn't be repaid because as I pointed out, why pay something back that they never had nor are at a loss for.

For one, people on this planet are starving or eating filthy scraps. You know the old overused picture of kids w/parasite-infested bellies with flies all over their mouth.

Banks are creating money out of thin air to the tune of 000 billions of dollar and they aren't givin it all away to those kids/ parents to get fed once and for all??!!

More to the point, 6 billion Planetarians are spending $100 000's of mortgage/loan monies to cover a loaning out/loss/liability that was never incurred. If this was not the case do you not think that money could feed anyone on this blue ball National Geog so well documents for us? $250 000 mortgage X 2 billion (1/3 of world pop.) = a pretty big waste of money from ill-informed but educated and civilized people.

There is a feeling of empowerment in knowing about this kinda stuff and reclaiming your own power/authority/sovereignty/love for self/service to others and making enlightened choices for everyones' highest good (not excluding your own). This is not about doom & gloom. I've never felt so vibrant since waking up and getting off my knees. BTW the solution rests not in a few people's hands but a united informed caring heart so to speak. Disengage from slave mentality and rock on. Smile.
Joined: 6/1/2005
Msg: 2
Are you chopped liver?
Posted: 4/7/2011 10:30:27 PM

Only one question........ do you really believe what you just wrote, or is this a late April Fools joke?

Sadly, that is exactly how banks work. They've been playing an April Fools joke on us for centuries. Jacob Spinney has a good video which discusses this and so much more.
Joined: 5/19/2010
Msg: 3
Are you chopped liver?
Posted: 4/7/2011 10:32:52 PM
Take your logic to the bank they got to put it somewhere safe.

There are 6 billion people somewhere with 100,000 a piece?

And the reason you had to post your profile here as a thread is.... ?
 motown cowgirl
Joined: 6/30/2010
Msg: 4
Are you chopped liver?
Posted: 4/8/2011 3:40:29 AM
fractional reserves?? so what!

fractional reserves is just the operating rules for banks, but the concept of fractional reserves is completely meaningless when "money" is nothing but book entries in a computer.
Joined: 6/29/2009
Msg: 5
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Are you chopped liver?
Posted: 4/8/2011 5:15:17 AM
If I understand it right (no promises) the idea of what is being called "fractional reserves" here, was something that was ADDED to banking by rule of law, after some bank failures happened and cost a lot of people their savings.
Banks are encouraged to loan money as freely as is RATIONALLY possible (and what constitutes 'rational' changes according to the unpredictable financial winds) , in order to provide monetary "lubrication" for the economy. Before they invented loans using "imaginary" money, the economy grew, but only very slowly and incrementally, much more slowly than the population, in many cases. After a while loaning "imaginary" money (this is actually real money they expect WILL arrive as the economy flourishes...and it often does), it was found that all economies need to allow for negative fluctuations in cash flows, and so they came up with an arbitrary percentage of monies loaned out, that the banks had to maintain cash-on-hand, in case a fluctuation required that they pay out large sums on some of the loans (defaults).
So yes, you COULD go back to the old-fashioned way of saving pennies for years, and that will work, it will just mean you have to improve your life a lot slower than you can the other way.
 motown cowgirl
Joined: 6/30/2010
Msg: 6
Are you chopped liver?
Posted: 4/8/2011 5:28:30 AM
the basic idea behind fractional reserves is that banks can loan out more money than they have on the books because there's an underlying presumption that the loans the banks make are mostly good and will mostly be collected. it's just a tool to facilitate business/economic growth, that's all. that concept is really independent of the "quality" of the medium of exchange. it works for federal reserve notes, wampum, cows, and silver coins. it's just a rule for how the medium of exchange -- in practice, book entries called "dollars" -- is managed for lending and borrowing.

op is mixing metaphors. if you want to start talking about fiat money and federal reserve notes, or the legal and economic ramifications of a "note" versus a "dollar" or "debt" versus "credit", then that's a separate discussion. it doesn't really have anything to do with fractional reserves.
Joined: 3/27/2011
Msg: 7
Are you chopped liver?
Posted: 4/8/2011 8:04:41 AM
sorry dude but the US Federal Reserve doe not govern banking rules for all 6 billion people on Planet Earth.

yes the USA controls a lot of the world, but not every square centimeter and every inhabitant..
Joined: 4/2/2011
Msg: 8
Are you chopped liver?
Posted: 4/8/2011 10:26:44 AM
I feel more like diced ham.
Joined: 6/29/2009
Msg: 9
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Are you chopped liver?
Posted: 4/8/2011 12:18:10 PM
Yeah, Paul, I wasn't really talking so much about us as individuals. I'm about the same as you are, when it comes to that. The post seemed to be about the general way that bank loans worked, and the guy specifically talked about BIG loans, not the little ones people use credit cards for. I might have misunderstood the guys post, but it looked to me as though he was suggesting that the whole idea of banking, and giving out loans to people FOR things like mortgages, was an insane scam of some sort. I was trying (somewhat poorly I'm afraid) to explain how a bank loaning out more money than it actually had in cash in the vault, isn't really as insane as he seemed to think it was, nor was it some sort of evil plot.
Oh, and I can't afford a flat screen TV yet either.
Joined: 3/27/2011
Msg: 10
Are you chopped liver?
Posted: 4/9/2011 8:34:07 AM
here is a simpler explanation for what the big banks/bankers did to taxpayers.

Heidi is the proprietor of a bar in Chicago. She realizes that
virtually all of her customers are unemployed alcoholics and, as such, can
no longer afford to patronize her bar. To solve this problem, she comes up
with a new marketing plan that allows her customers to drink now, but pay

Heidi keeps track of the drinks consumed on a ledger (thereby
granting the customers' loans). Word gets around about Heidi's "drink now,
pay later" marketing strategy and, as a result, increasing numbers of
customers flood into Heidi's bar. Soon she has the largest sales volume for
any bar in Chicago.

By providing her customers freedom from immediate payment demands,
Heidi gets no resistance when, at regular intervals, she substantially
increases her prices for wine and beer, the most consumed beverages.
Consequently, Heidi's gross sales volume increases massively.

A young and dynamic vice-president at the local bank recognizes that
these customer debts constitute valuable future assets and increases Heidi's
borrowing limit. He sees no reason for any undue concern, since he has the
debts of the unemployed alcoholics as collateral.

At the bank's corporate headquarters, expert traders figure a way to
make huge commissions, and transform these customer loans into DRINKBONDS.
These securities then are bundled and traded on international securities

Naive investors don't really understand that the securities being
sold to them as AAA secured bonds really are debts of unemployed alcoholics.
Nevertheless, the bond prices continuously climb, and the securities soon
become the hottest-selling items for some of the nation's leading brokerage
houses and are sold and bought world-wide.

One day, even though the bond prices still are climbing, a risk
manager at the original local bank decides that the time has come to demand
payment on the debts incurred by the drinkers at Heidi's bar. He so informs

Heidi then demands payment from her alcoholic patrons, but being
unemployed alcoholics they cannot pay back their drinking debts. Since Heidi
cannot fulfill her loan obligations she is forced into bankruptcy. The bar
closes and Heidi's 11 employees lose their jobs.

Overnight, DRINKBOND prices drop by 90%. The collapsed bond asset
value destroys the bank's liquidity and prevents it from issuing new loans,
thus freezing credit and economic activity in the community. The suppliers
of Heidi's bar had granted her generous payment extensions and had invested
their firms' pension funds in the BOND securities. They find they are now
faced with having to write off her bad debt and with losing over 90% of the
presumed value of the bonds. Her wine supplier also claims bankruptcy,
closing the doors on a family business that had endured for three
generations, her beer supplier is taken over by a competitor, who
immediately closes the local plant and lays off 150 workers.

Fortunately though, the bank, the brokerage houses and their
respective executives are saved and bailed out by a multibillion dollar
no-strings attached cash infusion from their cronies in government. The
funds required for this bailout are obtained by new taxes levied on
employed, middle-class, non-drinkers who have never been in Heidi's bar.

Now do you understand?
Joined: 6/1/2005
Msg: 11
Are you chopped liver?
Posted: 4/9/2011 10:07:36 AM

Now the banks that gave my former father in law money would bundle all of the loans they received and sell them to someone bigger.......... eventually, wall street would get a hold of these loans, and make loans against them, using these loans for security. All went well until two things happened....... First and foremost, the street level lenders were FORCED by the politicians who want to make sure that anybody who wanted a house could get one, regardless of their capability to pay it back, so they were FORCED to make these loans or lose their liceneses, or face discrimination lawsuits. THAT was the basis for the meltdown........... "fractional banking" had nothing to do with it, as all fractional banking is, is a way of distributing money. Second was that they allowed purchases of these "bundles" with very little money down on future delivery on specific dates........ Futures contracts......... So when these went bad, the purchasers not had almost no money to lose, these **stards were covered by insurance. All of this system was set up because UNLESS it was sete up that way, the bankers kept refusing to make loans to those who shouldn't have had them in the first place. This whole money debacle can be placed at the feet of those politicians who wanted so bad to socially engineer housing as they saw fit, and screwed everything and everybody in the process.........

This is an excellent description of just what went wrong. I just want to add in a couple additional points.

1) The FED had a big role here because it kept interest rates low and inflated the money supply. Banks then had lots of money to give out. This was no doubt done because the Bush administration decided that the American dream was to own a home so he wanted to encourage people taking out mortgages. This artificially created a demand in the housing market which then caused a rise in prices.

2) Fannie and Freddie actually had decent requirements for people to get government backed mortgages. Until Barney Frank was put in charge of the banking committee, that is. Then the standards were lowered to get more mortgages out to undeserving minorities. When they couldn't pay the mortgages the whole system collapsed.

I don't lose a whole lot of sleep because of "fractional banking".........

Fractional reserve banking made the situation worse than it would have otherwise been simply because the banks were able to make 9 times as many loans as they otherwise would have.
Joined: 6/29/2009
Msg: 12
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Are you chopped liver?
Posted: 4/9/2011 12:17:23 PM
Not the fishing type, paul. Your description sounds right to me, about the banking mess. I have usually found with such clusterfxx that there are helping hands from all sides involved, as well as tons of unintended consequences, resulting from badly written, though correctly intended laws.
I haven't the time to find out for sure, but I don't think the real causes of the recent implosion of real estate banking was due to the LOWER class poor folks getting loans at all. It was the fact that whatever WAS done, that made lenders decide to give out poorly backed loans, THEY turned into BIGGER money making schemes for themselves, by giving out BIG poorly-backed loans. It wasn't us peasants, who bought over-valued $900,000 houses, it was the upper-middle class folks who thought they were upper class folks, and the upper class folks who thought they were Ultimate Class folks.
Joined: 8/20/2006
Msg: 13
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Are you chopped liver?
Posted: 4/9/2011 5:40:43 PM
The affordable housing or CRA had a little to do with the crash but not much. The loans were originated by mostly lenders outside the governments rules. See this link.

The whole thing happened due to irresponsible lending and reckless behavior just as the Drinkbond example above with large bonuses paid along the way.

Push bad mortgages for bonus- pass liability to banks
-make bad loans into investment securities with alchemy and insure them with AIG- collect big bonus-pass off liability to AIG
-pay rating agencies(Moody's) to rate them Triple A
-sell securities to unsuspecting public, pension funds etc-pass off liability-collect bigger bonuses
-productionize manufacturing of securities until they are everywhere- more bonuses
-loans go bad -chain reaction crash- investment houses get caught with bad investments on books- financial system on brink, AIG insurer bankrupt
-get tax payers to bail them out, nobody held responsible

A big game of hot potato- and guess who got stuck with it.
Joined: 3/13/2011
Msg: 14
Are you chopped liver?
Posted: 4/10/2011 5:36:22 AM
Long ago I learned about fractional banking.
It's a blessing and a curse.

To answer your question: we are all the sum of our livers, chopped or otherwise.
Joined: 6/29/2009
Msg: 15
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Are you chopped liver?
Posted: 4/10/2011 5:46:01 AM
That sounds plausible too. I've witnessed many times first hand, how lots of stressful pushing to achieve business goals, combined with weak leadership about HOW to achieve them, usually leads to corruption squared. After the fact, the ones who did things wrong, blame the ones who pushed them (their immediate bosses), and the bosses blame the marketplace (or the vague encouragement of politicians, in this case) for MAKING them push, but refusing to accept their very real responsibility for failing to push RESPONSIBLY. Lots of "turning a blind eye" goes on, with everyone involved hoping that they can collect their winnings, and that it will all calm down on it's own before it blows up.

As soon as ONE vendor starts amassing big profits by "sneaking around the edges," then the rest follow, pretending that it's okay because it isn't STRICTLY illegal, and because they "have to do it too, to compete in the market."

This is really an excellent example of how business people as a group, CAUSE themselves to get regulated by the government. They bail on their own responsibility to handle their business responsibly, and pretty much force "daddy" to step in. Later, they will complain because, just like when we were kids, you can't count on Dad to regulate things the exact RIGHT way, and he'll very likely take away your favorite toys while he's at it.
Joined: 8/20/2006
Msg: 16
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Are you chopped liver?
Posted: 4/10/2011 6:35:30 PM

This is really an excellent example of how business people as a group, CAUSE themselves to get regulated by the government. They bail on their own responsibility to handle their business responsibly, and pretty much force "daddy" to step in. Later, they will complain because, just like when we were kids, you can't count on Dad to regulate things the exact RIGHT way, and he'll very likely take away your favorite toys while he's at it.

Yes Igor- I was just commenting to someone at work as we were watching people come and go- slow and sullen on the way in and running for the exits with a big smile at the end- just like back to high school. We don't really grow up do we :)

Fractional Banking has been around for years and has worked well when used in moderation. A good model is 10 to 1 loans to reserves. Very seldom does everybody go to one bank at once to take out all of their money or do all loans go bad. This allows money to be used for productive business loans with small reserves and allows them to pay interest on the money on those reserves.

But another cause of the financial crisis was that the main investment banks were allowed to have a 40 to 1 ratio- One dollar of reserves to float 40 dollars worth of loans. When things went bad, and loans got called in, they had insufficient reserves to remain viable. The whole house of cards came tumbling down. This was allowed by the regulators around 2003 because they failed to recognize those Triple A rated mortgage securities were seriously flawed and could not know how large a part of the market they were going to become.

Some knew that the there were grave risks but the temptation to make money was too great and everybody else was doing it. The removal of all the checks and balances in the system such as proper loan screening and non- visibility into the workings of the securities made stopping them difficult.

As you said, you have to regulate yourself. If you don't and it hurts someone else, dad or the police will come along and regulate for you.
Joined: 6/1/2005
Msg: 17
Are you chopped liver?
Posted: 4/10/2011 11:08:46 PM

As you said, you have to regulate yourself. If you don't and it hurts someone else, dad or the police will come along and regulate for you.

The problem is that dad (the FED) was giving you tons of money to loan out and the police (the government) were telling you not to worry if the loans go bad because they'll be there to clean up the mess.
Joined: 6/29/2009
Msg: 18
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Posted: 4/11/2011 4:47:53 AM
Yes, but that's been true since the creation of the FDIC, back in the thirties. I also don't think that it's JUST a matter of the government encouraging lending to less wealthy people, as part of trying to increase home ownership. Someone had to decide that the way to go about DOING that, was to change the basis of borrowing, first, and then decide again afterwards, to bundle those KNOWN bad loans into a package clearly designed to HIDE the fact that hey are bad loans, and sell them to other banks and financial institutions.
I suspect that some kind of financial philosophical change must have come about, that was coincidental with the political push for more home ownership. Unless you know of some act of Congress that PENALIZED lenders who DIDN'T choose to make bad loans. I haven't heard of it, and if it existed, I'm reasonably sure it would either have been talked about when it was passed and signed into law, OR when things fell apart.
Historically, this sort of thing happened plenty of times BEFORE the Insurance Safety net was created too, so blaming the existence of the FDIC doesn't match the facts. Ultimately, I have to believe that what went wrong was that someone came up with a new financial scam/trick, designed to let them make a bunch of quick money, that was crafted to get around existing regulations. As such things always do, things got out of hand fairly quickly. Since it was done during the most recent ascendancy of the "deregulation" fad, it got way worse than it might have at a time when more caution was in vogue.
Joined: 6/29/2009
Msg: 19
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Are you chopped liver?
Posted: 4/11/2011 2:07:36 PM
I'm genuinely curious, Paul. Can you cite a reference for the rules or regulations that forced lenders to give out these below prime loans in the quantity they did, and further to then bundle them as "derivatives" and sell them again and again? I'll join you in castigating such a law or regulation if it exists, and I'll also write to my reps and demand it be retracted. Just "encouraging" lenders to be more relaxed isn't enough to transfer blame from the lenders to the politicians.
Joined: 6/29/2009
Msg: 20
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Are you chopped liver?
Posted: 4/11/2011 9:10:27 PM
I'm not denying anything, I'm actually trying to figure out what really happened.
Part of my thinking on these sorts of things has to be reasoned guesswork, since I don't have the resources (especially time) to find out the hard way. An example of a reasoned guess is, that there is nothing to the whole "Obama isn't really an American" thing. I believe this to be so mainly because my appreciation of the GOP's abilities to to have found out for sure. Had they done so, I'm equally sure they would have trumpeted it and published it. That they did nothing of the kind, suggests strongly to me that there is no supporting evidence for the assertion.
When it comes to the whole economic mess we are struggling out of due to the bad loans, there have been all sorts of ALLEGATIONS and SPECULATIONS in the news, but no actual facts. One of my constant frustrations as a person of logic, is that it seems that ALL politicians, no matter their label or affiliation, seem to have an intense aversion to both facts, and reason. They all prefer emotional diatribes, accusations, and hyperbole. The news types rarely help, because all of THEM, again regardless of their biases, have RATINGS and therefore EXCITEMENT as their primary motive. So THEY aren't inclined to do any real research, or rational deduction either.
So we have lots of people on the right (or what ever one wants to call the batch of folks who are generally over thataway) doing their level best to claim that whatever goes wrong in our country is the fault of the left. The folks on the left, do the same thing in reverse. There are folks saying as you have, that the banks and others were MADE to give out these 'sub-prime' loans, but none of the people making that accusation have quoted a law, or a regulation, or a directive of any kind. Instead, they make angry denunciations of the Clinton administration, saying vaguely that THOSE guys set this all in motion, and so it's THEIR fault.
If I could ask any of the big talkers who have claimed this a single question, it would be: so why in the hell, when you had EIGHT YEARS in control of the WHOLE SHEBANG, didn't you do ANYTHING to turn it around? Again, by "reasoned guesswork," I deduce that they are talking through their hats, and either there ARE no such regulations, or they actually LIKED the regulations (because they were making money off of them themselves?).
And yes, I agree and understand that once the loans were made, that someone other than the loan officers turned them into derivatives. That protects the loan officers' bosses from being blamed for the DERIVATIVES, but not for the loans. And the DERIVATIVES people are still very much on the hook, they weren't "left leaning government meddlers." They were independent businessmen, who knowingly hid bad paper inside of clever cover stories, so that they could pass the growing risk the rest of their companies had created by MAKING the loans, on to other people.
So I'm still left looking at it all, and concluding at least for now, that we need MORE government regulation, this time of the derivatives market, or what ever one calls the new system these guys created to hide the bad loans.

Thus, until I do find actual regulations or laws, or administrative directives to the contrary, the only logical conclusion I can have is, that the private loan/investment industry people did this to us. They came up with a "solution" to what they had in those FIRST bad loans, that allowed them to move those loans out, so that MORE bad loans could be made. Between the people offering the bad loans, and their tag team of derivative marketers, they pumped up a HUGE balloon of fake "wealth," which when punctured, dumped all of us into this mess. It's the same basic thing that made things go bad in 1929, with "wealth" being built, NOT on real goods and services, but on people BORROWING from the stock market, to INVEST in the stock market. In just the same way, a bunch of very expensive dominoes were set up in a line, and one day, someone decided to tip one over.
And even if someone DID force the FIRST set of bad loans, no one FORCED the hiding of them inside derivative "investment packages." No one FORCED them to then KNOWINGLY make even more bad loans, using the fake money they got by selling those derivatives. They did that all by themselves.
Joined: 6/1/2005
Msg: 21
Are you chopped liver?
Posted: 4/12/2011 7:32:28 AM

An example of a reasoned guess is, that there is nothing to the whole "Obama isn't really an American" thing.

Not to get us off topic but it took me 5 minutes searching through federal laws to find the right statute. The birth certificate is a complete non-issue, even if he was born in Kenya. Everybody agrees that his mother was an American citizen who spent most of her life in America. So it doesn't matter where he was born.
Joined: 6/29/2009
Msg: 22
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Are you chopped liver?
Posted: 4/12/2011 3:30:53 PM
A couple of things I've read and heard: Some of the derivative packages were very MUCH designed to hide the low quality and high risk of the loans. I don't know what proportion. More importantly, I read/heard that it isn't that the derivatives were marketed within regulations, it's that the derivatives market HAD no regulations to speak of, as it was too new.
And again, exactly how DID the government get involved in a way it shouldn't have? Did they create regulations that forced all those bad loans to be made, or did they just "encourage them" somehow? I don't expect you to know what I haven't stumbled across, I just think it's important when one wants to address a problem, that one establish whether the claims being made about it are politically convenient assumptions, or actual facts. So far, all I've heard are assumptions and claims, which conveniently let the bankers pretend they were not responsible for signing all those loans that they (I say CHOSE) to sign.
This isn't because I hate bankers, its because my first rule of assigning responsibility is, that the person that DID THE DEAD, is the first and most responsible. The one who told them to, encouraged them to, allowed them to, also bears some of the blame, but until someone proves that they were literally forced to act as they did, they get the bulk of the responsibility.
Everyone turns into a five year old when things go wrong. "The Liberals/Conservatives MADE me do it" is what I tend to hear these days, and I'm not accepting it from grownups, just like I don't accept tit from five year olds.
Joined: 8/20/2006
Msg: 23
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Are you chopped liver?
Posted: 4/12/2011 5:29:53 PM

Do you really honestly think that the CRA was the only one in the grand scheme of things that was pushing these loans????? That is the classic straw man, in that you point to the CRA, and "look, they had nothing to do with the crash", yet you blatantly igore everthing else that was done to push "affordable housing"..................

Nice try.

Looks like I got someone a little excited. I really fail to see what I wrote as a "strawman"- at least I back up my with some references. But since the term has come into common usage, people are seeing them everywhere!

So, in the spirit of POF S &P forums, I see your strawman and raise you, ooh, about 3-5 of your own logical fallacies.

"look, they had nothing to do with the crash",

misquoting my words and generally taking everything I wrote out of context

I can't right now send you references to sites or regulations.

No specific references to bolster your claim, "just trust me"

I am speaking from experience in haveing been married to someone in the loan industry, and whose father was also in the loan industry, and having them tell me about the changes that they then had to accomdate.

Appeal to authority, anecdotal evidence

but just because I can't tell you the number of the regulation that says I can't shoot anybody, doesn't mean it doesn't exist............

inappropriate analogy,evidence of absence

Nice try to you too

As Igor stated, its tough to find unbiased information on this subject. I looked around a bit for my info, trying to make sure it came from somewhere that didn't have a left or right wing backing. It's like the global warming argument with one side telling you the worlds going to turn into a flaming hell like Venus and the other saying nothings changed, don't worry and fire up that SUV. I think in both cases, something a little more up the middle is appropriate.

But Paul, you go on to say

Once these loans were made, it was out of the hands of the mortgage people, and in control of a completely different group. Was there then a "regulation" that forced the ones who handled these loans afterwords to do as they did? Nope, but do you deny that is what happened?

If if you look at this and see ALL of what I wrote- you and I basically agree! This crisis was even more about this aspect than it was about the loans themselves.
Paul- lets have a !

The whole system ran amok and with great speed. One problem is that so few had the insight and placement to see that this problem was so large and that it was bubbling up through many large investment banks all at once. If it had just hit one or two, the damage would have been greatly reduced.

But the signs were out there. Warren Buffet called these derivatives "economic weapons of mass destruction" back in 2003.

I myself took Warrens advise. I started reading about investing back in 2007 while I was waiting for all the messages to pour in from the ladies here on POF (I did a lot of reading!) and faced with the decision of investing in my RSP (Canadian 401k) money in the market or paying off my mortgage, I punted and finished the mortgage while getting defensive in my investing, which paid off. I was also lucky I had friends that were astute investors. I figure if I could so it so could have many. But most of the general public is not investment savvy in the least. I feel sorry for them.

Fractional banking, Mortgage back securities and derivatives- all best used in moderation. But how do you teach that to the regulators or the large investment firms? For all the advances we have made, we still have to learn some things the hard way. Over the ages, it seems to be the human condition.
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