The incredible sadness of austerity
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And the cause of the Irish economic collapse?
1.1 Subprime lending
1.2 Growth of the housing bubble
1.3 Easy credit conditions
1.4 Weak and fraudulent underwriting practice
1.5 Predatory lending
1.6 Deregulation
1.7 Increased debt burden or over-leveraging
1.8 Financial innovation and complexity
1.9 Incorrect pricing of risk
1.10 Boom and collapse of the shadow banking system
Oh wait, that was the stuff that was happening in the USA at the time.
"Background and causes
The Irish economy expanded rapidly during the Celtic Tiger years (1997â2007) due to a low corporate tax rate, low ECB interest rates, and other factors. This led to an expansion of credit and included a property bubble which petered out in 2007. Irish banks, already over-exposed to the Irish property market, came under severe pressure in September 2008 due to the global financial crisis of 2007â2010."
So in a sense, lack of effective regulation of the US banking sector resulted in this spike of suicides in Ireland.
"In the early and mid-2000s (decade), the Bush administration called numerous times[33] for investigation into the safety and soundness of the GSEs and their swelling portfolio of subprime mortgages. On September 10, 2003 the House Financial Services Committee held a hearing at the urging of the administration to assess safety and soundness issues and to review a recent report by the Office of Federal Housing Enterprise Oversight (OFHEO) that had uncovered accounting discrepancies within the two entities.[34] The hearings never resulted in new legislation or formal investigation of Fannie Mae and Freddie Mac, as many of the committee members refused to accept the report and instead rebuked OFHEO for their attempt at regulation.[35] Some believe this was an early warning to the systemic risk that the growing market in subprime mortgages posed to the U.S. financial system that went unheeded.[36]
A 2000 United States Department of the Treasury study of lending trends for 305 cities from 1993 to 1998 showed that $467 billion of mortgage lending was made by Community Reinvestment Act (CRA)-covered lenders into low and mid level income (LMI) borrowers and neighborhoods, representing 10% of all US mortgage lending during the period. The majority of these were prime loans. Sub-prime loans made by CRA-covered institutions constituted a 3% market share of LMI loans in 1998.[37] Nevertheless, only 25% of all sub-prime lending occurred at CRA-covered institutions, and a full 50% of sub-prime loans originated at institutions exempt from CRA.[38]
An analysis by the Federal Reserve Bank of Dallas in 2009 concluded unequivocally that the CRA was not responsible for the mortgage loan crisis, pointing out that CRA rules have been in place since 1995 whereas the poor lending emerged only a decade later.[39] Furthermore, most sub-prime loans were not made to the LMI borrowers targeted by the CRA, especially in the years 2005-2006 leading up to the crisis. Nor did it find any evidence that lending under the CRA rules increased delinquency rates or that the CRA indirectly influenced independent mortgage lenders to ramp up sub-prime lending.
1.1 Subprime lending
1.2 Growth of the housing bubble
1.3 Easy credit conditions
1.4 Weak and fraudulent underwriting practice
1.5 Predatory lending
1.6 Deregulation
1.7 Increased debt burden or over-leveraging
1.8 Financial innovation and complexity
1.9 Incorrect pricing of risk
1.10 Boom and collapse of the shadow banking system
Oh wait, that was the stuff that was happening in the USA at the time.
"Background and causes
The Irish economy expanded rapidly during the Celtic Tiger years (1997â2007) due to a low corporate tax rate, low ECB interest rates, and other factors. This led to an expansion of credit and included a property bubble which petered out in 2007. Irish banks, already over-exposed to the Irish property market, came under severe pressure in September 2008 due to the global financial crisis of 2007â2010."
So in a sense, lack of effective regulation of the US banking sector resulted in this spike of suicides in Ireland.
"In the early and mid-2000s (decade), the Bush administration called numerous times[33] for investigation into the safety and soundness of the GSEs and their swelling portfolio of subprime mortgages. On September 10, 2003 the House Financial Services Committee held a hearing at the urging of the administration to assess safety and soundness issues and to review a recent report by the Office of Federal Housing Enterprise Oversight (OFHEO) that had uncovered accounting discrepancies within the two entities.[34] The hearings never resulted in new legislation or formal investigation of Fannie Mae and Freddie Mac, as many of the committee members refused to accept the report and instead rebuked OFHEO for their attempt at regulation.[35] Some believe this was an early warning to the systemic risk that the growing market in subprime mortgages posed to the U.S. financial system that went unheeded.[36]
A 2000 United States Department of the Treasury study of lending trends for 305 cities from 1993 to 1998 showed that $467 billion of mortgage lending was made by Community Reinvestment Act (CRA)-covered lenders into low and mid level income (LMI) borrowers and neighborhoods, representing 10% of all US mortgage lending during the period. The majority of these were prime loans. Sub-prime loans made by CRA-covered institutions constituted a 3% market share of LMI loans in 1998.[37] Nevertheless, only 25% of all sub-prime lending occurred at CRA-covered institutions, and a full 50% of sub-prime loans originated at institutions exempt from CRA.[38]
An analysis by the Federal Reserve Bank of Dallas in 2009 concluded unequivocally that the CRA was not responsible for the mortgage loan crisis, pointing out that CRA rules have been in place since 1995 whereas the poor lending emerged only a decade later.[39] Furthermore, most sub-prime loans were not made to the LMI borrowers targeted by the CRA, especially in the years 2005-2006 leading up to the crisis. Nor did it find any evidence that lending under the CRA rules increased delinquency rates or that the CRA indirectly influenced independent mortgage lenders to ramp up sub-prime lending.
Fed Reserve PDF:The Subprime Crisis: Is Government Housing Policy to Blame?
ABSTRACT
A growing literature suggests that housing policy, embodied by the Community Reinvestment Act (CRA) and the affordable housing goals of the government sponsored enterprises, may have caused the subprime crisis. The conclusions drawn in this literature, for the most part, have been based on associations between aggregated national trends. In this paper
we examine more directly whether these programs were associated with worse outcomes in the mortgage market, including delinquency rates and measures of loan quality.
We rely on two empirical approaches. In the first approach, which focuses on the CRA, we conjecture that historical legacies create significant variations in the lenders that serve otherwise comparable neighborhoods. Because not all lenders are subject to the CRA, this creates a quasi-natural experiment of the CRAâs effect. We test this conjecture by examining whether neighborhoods that have been disproportionally served by CRA-covered institutions historically experienced worse outcomes. The second approach takes advantage of the fact that both the CRA and GSE goals rely on clearly defined geographic areas to determine which loans are favored by the regulations. Using a regression discontinuity approach, our tests compare the
marginal areas just above and below the thresholds that define eligibility, where any effect of the CRA or GSE goals should be clearest.
We find little evidence that either the CRA or the GSE goals played a significant role in the subprime crisis. Our lender tests indicate that areas disproportionately served by lenders covered by the CRA experienced lower delinquency rates and less risky lending. Similarly, the threshold tests show no evidence that either program had a significantly negative effect on outcomes.
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There is no cherry picking of the data. Frank Luntz nor any FOXNews employee had any involvement in the above mentioned or any other empirical study. I haven't seen Heritage, Cato or AEI refute the findings. I'll have to go back and take a look at the 90's again but this past crisis wasn't govt programs.
Low rates made the banks want to loan more but it was the duty to not make loans to people who couldn't afford them. We all know the stories of how easy it was to buy a house with no money down and how no income verification was done on many loans. This is private sector's fault. Just because money becomes cheap doesn't mean you do stupid things with it.
So only those who condone fraud or have some sort of special gift to become oblivious to bullshit can trade?
ABSTRACT
A growing literature suggests that housing policy, embodied by the Community Reinvestment Act (CRA) and the affordable housing goals of the government sponsored enterprises, may have caused the subprime crisis. The conclusions drawn in this literature, for the most part, have been based on associations between aggregated national trends. In this paper
we examine more directly whether these programs were associated with worse outcomes in the mortgage market, including delinquency rates and measures of loan quality.
We rely on two empirical approaches. In the first approach, which focuses on the CRA, we conjecture that historical legacies create significant variations in the lenders that serve otherwise comparable neighborhoods. Because not all lenders are subject to the CRA, this creates a quasi-natural experiment of the CRAâs effect. We test this conjecture by examining whether neighborhoods that have been disproportionally served by CRA-covered institutions historically experienced worse outcomes. The second approach takes advantage of the fact that both the CRA and GSE goals rely on clearly defined geographic areas to determine which loans are favored by the regulations. Using a regression discontinuity approach, our tests compare the
marginal areas just above and below the thresholds that define eligibility, where any effect of the CRA or GSE goals should be clearest.
We find little evidence that either the CRA or the GSE goals played a significant role in the subprime crisis. Our lender tests indicate that areas disproportionately served by lenders covered by the CRA experienced lower delinquency rates and less risky lending. Similarly, the threshold tests show no evidence that either program had a significantly negative effect on outcomes.
-------
There is no cherry picking of the data. Frank Luntz nor any FOXNews employee had any involvement in the above mentioned or any other empirical study. I haven't seen Heritage, Cato or AEI refute the findings. I'll have to go back and take a look at the 90's again but this past crisis wasn't govt programs.
Low rates made the banks want to loan more but it was the duty to not make loans to people who couldn't afford them. We all know the stories of how easy it was to buy a house with no money down and how no income verification was done on many loans. This is private sector's fault. Just because money becomes cheap doesn't mean you do stupid things with it.
So only those who condone fraud or have some sort of special gift to become oblivious to bullshit can trade?
people in northern climes may also work harder because there is nothing else to do.
Why do you think russians wrote such long novels. Because they had to write them long or because russia had nine month winters.
I moved to san diego because I live twice as much life a year as I did back east.
Was it the right decision. I don't know I might have retired at 40 if I stayed in Greenwich. But, I think it was.
Why do you think russians wrote such long novels. Because they had to write them long or because russia had nine month winters.
I moved to san diego because I live twice as much life a year as I did back east.
Was it the right decision. I don't know I might have retired at 40 if I stayed in Greenwich. But, I think it was.
http://www.met.ie/climate/rainfall.asp compare the number of days of overcast or cloudy /rainy weather per yr to portland.our suicide capital..68 days of sunshine per yr
haiti was 137th from the top in another list but figures were from 03,here they have 0,one of the poorest countries on the globe http://www.who.int/mental_health/prevention/suicide_rates/en/
LMAO!!!
You guys are toooooo funny
I remember meeting this Columbian guy, and he pointed out that the reason that Latin American countries are backward economically to the US is that it is too hot. I pointed out that if that happened to Americans, we would just invent air conditioners.
There is something to this kind of analysis, as pointed out by Jared Diamond in Collapse. But you guys are taking to extremes.
Yea forget all the trade imbalance, interest rate issues, forget all that, it happened because the government will give you 40 pound a week when you don't work fuck, im sure that stopped so many who were keen on going into business, who needs risk! 40 pound A WEEK!!!!!!!!!!!! FREE INSTEAD!!!!!!!!