[tuccillo]

That coupled with the ability to package and sell off the loans to other institutions who didn't understand the risk.

Originally Posted by outlaw

The subprime loans that crashed the economy were the result of our know-it-all government that coerced, through regulation and quotas, all banks to make these risky, stupid loans to people who could never pay them back. And now, the government is pushing this same policy on the banks, again.

[Buffalo Jim]

At the risk of once again being called out and having my knowledge and experience impugned , for those who may be interested in all that took place I offer the following :

For about 15 years I was a senior member of my bank`s " CRA Committee ".
CRA is short for " The Community Reinvestment Act ".

My day to day responsibilities included all Compliance for the Commercial Banking Division which provided about 65% of the bank's income . Previously my responsibilities included Regulatory Compliance for the Consumer Division [ branch system ] which we called " The Retail Division " . Compliance was 20% of my areas of responsibility .

The CRA Regulations are deep and complex . When a new regulatory act is promulgated the expectations are most often complex , sometimes contardictory and often vague with respect to what the Regulatory Auditors will expect . It usually takes about 5 years of experience and audits in order for the acceptable practice vs the lengthy and complex published regulations to be fully understood by both the institution and its Regulators .

Usually the language is hundreds of pages in length and more often than not leaves the managers responsible for adherence effectively scratching their collective heads .

As I recall there were four levels of " Grades " which the Regulators could assign to a completed Regulatory CRA Audit . A Level 3 was considered passing however our Chairman and Audit Committee of the Board ordered that we achieve a score of 4.0 each and every year .

Again as I recall larger banks went thru a CRA Audit annually and smaller banks every other year .
Also each year the standards were tightened as both the Regulators and the institutions became more ' expert ' at understanding the expectations and spirit of the Act . IE what got you a 4.0 in one year would not get you a 4.0 the next .

When the final Audit report of the CRA Regulators was developed and delivered the chief Regulator on the Audit would meet with the bank`s Chief Auditor and also with the Chairman and the Chair of the Board`s Audit Committee . Following that they would meet with the bank's CRA Committee to review their findings in detail .

Even if the institution was being graded out as a 4.0 there were always a number of observations both positive and negative or mere suggestions which the Regulator would share with the bank . These are called " Leave Items " meaning in effect " we observed these issues but did not find them compelling enough to put them into our final report .

In effect, what they were communicating was that we needed to focus on these issues and improve on them because they will be closely scrutinized during the next CRA Audit .

The failure of a bank to earn a 4.0 on their CRA Audit could impede or even prevent their being able to expand their operations by say opening new branches or entering into a merger or acquisition .

However achieving a score of 4.0 guaranteed that any application for a new branch or an acquisition / merger could not be held up due to the efforts of groups such as ACORN who routinely filed protests for any such application anywhere by any institution .

CRA was but only 1 type of Regulatory Audit . There are several which focus on different areas of the business .
But hey what do I know . Let the scorging commence !

[jblum315]

The rich get richer and the poor get poorer.
Truer words never spoken

[Villages PL]

There were 268 new billionaires worldwide. The U.S. led the way with 50 and China came in second with 37. Germany 26 and Brazil 23.

Search: A millionaire on nearly every block in U.S.

A recent study indicated that the number of U.S. millionaires grew by 18 percent in 2014. There are now roughly 7.1 million millionaire-households. That means one millionaire household for every 16 households.

Upward mobility is alive and well.

[dewilson58]

Wall Street did well..............So did I.

[Tennisnut]

Originally Posted by Villages PL

There were 268 new billionaires worldwide. The U.S. led the way with 50 and China came in second with 37. Germany 26 and Brazil 23.

Search: A millionaire on nearly every block in U.S.

A recent study indicated that the number of U.S. millionaires grew by 18 percent in 2014. There are now roughly 7.1 million millionaire-households. That means one millionaire household for every 16 households.

Upward mobility is alive and well.

It really has been a good six years, hasn't it?

[sunnyatlast]

It really boils down to where you want the gap between the richest echelon and the poorest echelon to sit when you narrow it. If you bring down the top incomes but don't invest in ways of bringing the poorest incomes UP, you really have no improvement:

(Can we just enjoy this together as an illustration and a couple of good chuckles from both sides?)

https://www.youtube.com/watch?v=pdR7WW3XR9c

[manaboutown]

Originally Posted by Buffalo Jim

At the risk of once again being called out and having my knowledge and experience impugned , for those who may be interested in all that took place I offer the following :

For about 15 years I was a senior member of my bank`s " CRA Committee ".
CRA is short for " The Community Reinvestment Act ".

My day to day responsibilities included all Compliance for the Commercial Banking Division which provided about 65% of the bank's income . Previously my responsibilities included Regulatory Compliance for the Consumer Division [ branch system ] which we called " The Retail Division " . Compliance was 20% of my areas of responsibility .

The CRA Regulations are deep and complex . When a new regulatory act is promulgated the expectations are most often complex , sometimes contardictory and often vague with respect to what the Regulatory Auditors will expect . It usually takes about 5 years of experience and audits in order for the acceptable practice vs the lengthy and complex published regulations to be fully understood by both the institution and its Regulators .

Usually the language is hundreds of pages in length and more often than not leaves the managers responsible for adherence effectively scratching their collective heads .

As I recall there were four levels of " Grades " which the Regulators could assign to a completed Regulatory CRA Audit . A Level 3 was considered passing however our Chairman and Audit Committee of the Board ordered that we achieve a score of 4.0 each and every year .

Again as I recall larger banks went thru a CRA Audit annually and smaller banks every other year .
Also each year the standards were tightened as both the Regulators and the institutions became more ' expert ' at understanding the expectations and spirit of the Act . IE what got you a 4.0 in one year would not get you a 4.0 the next .

When the final Audit report of the CRA Regulators was developed and delivered the chief Regulator on the Audit would meet with the bank`s Chief Auditor and also with the Chairman and the Chair of the Board`s Audit Committee . Following that they would meet with the bank's CRA Committee to review their findings in detail .

Even if the institution was being graded out as a 4.0 there were always a number of observations both positive and negative or mere suggestions which the Regulator would share with the bank . These are called " Leave Items " meaning in effect " we observed these issues but did not find them compelling enough to put them into our final report .

In effect, what they were communicating was that we needed to focus on these issues and improve on them because they will be closely scrutinized during the next CRA Audit .

The failure of a bank to earn a 4.0 on their CRA Audit could impede or even prevent their being able to expand their operations by say opening new branches or entering into a merger or acquisition .

However achieving a score of 4.0 guaranteed that any application for a new branch or an acquisition / merger could not be held up due to the efforts of groups such as ACORN who routinely filed protests for any such application anywhere by any institution .

CRA was but only 1 type of Regulatory Audit . There are several which focus on different areas of the business .
But hey what do I know . Let the scorging commence !

What a nightmare!

[Villages PL]

Originally Posted by Tennisnut

It really has been a good six years, hasn't it?

Well, it's not that simple. In the first years after the housing and stock market crash, things felt pretty bad. My net worth was just about cut in half. Then it took an agonizingly long time to gain it back. I had to reevaluate my holdings and make some investment changes.

After I regained my losses, I went on to double what I had before the crash. That's the story of a retired investor.

However, for those who depended on their jobs and were let go after the crash, it was a much different story. A good friend of mine was about 62 at the time of the crash and not ready to retire. She had no choice because her job was considered non-essential. She was never able to find employment again. Her son, about 29 at the time, has just stared working again. And I'm sure there are a lot of people with stories like that. There are always winners and losers in life. During my lifetime I had my share of bad luck in trying to make it economically.

[justjim]

Originally Posted by manaboutown

The subprime loans were pushed on the lenders by politicians. Obama pushed banks to give subprime loans to Chicago blacks | The Daily Caller

Bill Clinton - 25 People to Blame for the Financial Crisis - TIME

This really had nothing to do with the economic crisis---not saying it was good or bad---just not relevant to the economic crisis.

[Polar Bear]

Originally Posted by manaboutown

The subprime loans were pushed on the lenders by politicians. Obama pushed banks to give subprime loans to Chicago blacks | The Daily Caller

http://content.time.com/time/special...877322,00.html

Originally Posted by justjim

This really had nothing to do with the economic crisis---not saying it was good or bad---just not relevant to the economic crisis.

The failure of a large number of mortgage loans had a great deal to do with the economic crisis.

[Paper1]

Originally Posted by Villages PL

Well, it's not that simple. In the first years after the housing and stock market crash, things felt pretty bad. My net worth was just about cut in half. Then it took an agonizingly long time to gain it back. I had to reevaluate my holdings and make some investment changes.

After I regained my losses, I went on to double what I had before the crash. That's the story of a retired investor.

However, for those who depended on their jobs and were let go after the crash, it was a much different story. A good friend of mine was about 62 at the time of the crash and not ready to retire. She had no choice because her job was considered non-essential. She was never able to find employment again. Her son, about 29 at the time, has just stared working again. And I'm sure there are a lot of people with stories like that. There are always winners and losers in life. During my lifetime I had my share of bad luck in trying to make it economically.

I think your personnal story does shed light on what our economy is doing now. There is much more "unearned income" than earned in USA today. People that are working 40 hours and getting a check are not generating any wealth for themselves. I don't believe we can track that way much longer. We don't make anything therefore are losing jobs. Many of us here in Villages I'm sure have experiences that mirror yours.

[tcxr750]

My thoughts on the wealth transfer. Executive pay vs. worker...2013 400 to 1, 2000 120 to 1, 1980 42 to 1, 1950 20 to 1. I imagine being an Executive your instinct would be to improve your financial position through whatever means available. Downsizing, M and A, Rightsizing, Outsourcing work to China. Keep the shareholders happy.
Just the outsourcing to China alone has transformed a virtual third world country in 60 years to a global powerhouse. That's another consequence of wealth transfer.

Sub Prime Loans. I believe that started under the President before Obama's administration. Investors were hungry for insured CMO's with good returns. Once the high risk borrows defaulted, companies like AIG ,that insured the losses couldn't cover the losses ergo...the Great Recession.

[Walt.]

With all this talk about wealth transfer...
I have yet to hear anyone, anywhere, refer to that line in the State of the Union message that went... "let's close the loophole that leads to inequality by allowing the top one percent to avoid paying taxes on their accumulated wealth.."

[sunnyatlast]

Originally Posted by tcxr750

My thoughts on the wealth transfer. Executive pay vs. worker...2013 400 to 1, 2000 120 to 1, 1980 42 to 1, 1950 20 to 1. I imagine being an Executive your instinct would be to improve your financial position through whatever means available. Downsizing, M and A, Rightsizing, Outsourcing work to China. Keep the shareholders happy.
Just the outsourcing to China alone has transformed a virtual third world country in 60 years to a global powerhouse. That's another consequence of wealth transfer.

Sub Prime Loans. I believe that started under the President before Obama's administration. Investors were hungry for insured CMO's with good returns. Once the high risk borrows defaulted, companies like AIG ,that insured the losses couldn't cover the losses ergo...the Great Recession.

If you're going to blame the current wealth maldistribution on the prior presidency, just how do you explain these donors' excessive wealth and their funding of the current administration's campaigns?

The World's Most Powerful Celebrities' Earnings


#1 Beyonce Knowles 33 $115 M Musicians
#2 LeBron James 30 $72 M Athletes
#3 Dr. Dre 50 $620 M Musicians
#4 Oprah Winfrey 61 $82 M Personalities
#5 Ellen DeGeneres 57 $70 M Personalities
#6 Jay-Z 45 $60 M Musicians
#7 Floyd Mayweather 38 $105 M Athletes
#8 Rihanna 27 $48 M Musicians
#9 Katy Perry 30 $40 M Musicians
#10 Robert Downey Jr 50 $75 M Actors
#11 Steven Spielberg 68 $100 M Directors/Producers
#12 Jennifer Lawrence 24 $34 M Actresses
#13 Bon Jovi - $82 M Musicians
#13 Bruno Mars 29 $60 M Musicians
#15 Kobe Bryant 36 $62 M Athletes
#16 Roger Federer 33 $55 M Athletes
#17 Miley Cyrus 21 $36 M Musicians
#18 Taylor Swift 25 $64 M Musicians
#19 Lady Gaga 29 $33 M Musicians
#20 Kanye West 37 $30 M Musicians
#21 Calvin Harris 31 $66 M Musicians
#21 Tiger Woods 39 $61 M Athletes
#23 Dwayne Johnson 43 $52 M Actors
#24 Rafael Nadal 28 $45 M Athletes
#25 Bruce Springsteen 65 $81 M Musicians
#26 The Eagles - $100 M Musicians
#26 Justin Timberlake 34 $57 M Musicians
#28 One Direction - $75 M Musicians
#29 Paul McCartney 72 $71 M Musicians
#30 Cristiano Ronaldo 30 $80 M Athletes
#31 Sean "Diddy" Combs 45 $60 M Musicians
#31 Ryan Seacrest 40 $65 M Personalities
#33 Justin Bieber 21 $80 M Musicians
#33 Kevin Durant 26 $32 M Athletes
#33 Jennifer Lopez 45 $37 M Musicians
#36 Sandra Bullock 50 $51 M Actresses
#37 James Patterson 68 $90 M Authors
#38 Pharrell Williams 42 $22 M Musicians

The World's Most Powerful Celebrities List - Forbes