news blurb....community reinvestment act contributes to meltdown

blurbat: 

Clearly the troubles we are in are due to multiple factors. Here's how you can tell if someone even has a clue to what they are talking about. If they say: "this is Bush''s fault" or " this is the Republicans fault" that's one give away. Figure this, a bank in Iceland just went under yesterday. Also Fortis in Europe needs a bailout. Big problems in Russia/China/India/Brazil now in their economies. I'm not thinking these things had so much to do with subprime. 

Another give away is if they say "this is the Democrats fault". Still wrong but there is a little more to this angle. For example, the CRA (see below) was largely a Democrat issue, you know similar theme, good intentions gone bad. However, that being said Wall Street, had no big heart ache in leaving behind prudent tradition and going along with high risk loans since there was money to be made. Sometimes the best way to go when you are lost is backwards.

From theglickreport:

"(The) Community Reinvestment Act contributed to the problem that we have today.

The CRA was created in 1977. The act encouraged Fannie Mae to lend to home buyers buy encouraging mortgage companies, commercial banks and savings and loans to lend. It also encouraged Freddie Mac to buy mortgages on the secondary market, package them and sell them as securities. In hindsight, it sounds like the cause of many of today’s problems. Well according to Wayne Angell, it is. He willingly accepts blame for what he and the Greenspan era did under his watch and gives his take on how to solve this problem. He believes the U.S. dollar and free trade with other countries will continue to keep this economy afloat while other areas are weak."

blurbat again: as best as I can tell, here are the main factors that contributed to the financial mess the country is in, with attribution of who was more likey to promote the error.

1) unlinking our currency from the gold standard. Both
2) forcing lenders to ease credit policies; this contributed in large part to the sub prime practices. Democrats

3) massive increase in the M4 money supply after 9/11. Both

4) allowing people to use money they don't have (way too much margin). Republican

5) allowing people to use money they don't have (margin) to buy things that don't exist (futures). Republicans

6) market risk was blurred by the formation of fannie mae and freddie mack Democrat