http://www.ntv.co.ke The Ministry of Public Works is this afternoon (Thursday) expected to defend itself against allegations that it colluded with contractor…
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5.1.2014: Both George Horn and Gordon Weis inquired whether a forensic audit of the TPA will be conducted.
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Question by Change Now: Why are people still hoodwinked into believing the Community Reinvestment Act is major reason why we’re here?
What a load of propaganda crap that the right has plopped on the American psyche.
There are people out there who actually think that the CRA brought down our economy. What fools,
The CRA was created at a time when subprimes could be easily absorbed into the market. They would make up less than 5% of all mortgages.
The current catastrophe was caused by SECURITIZATION of mortgages. Harvard MBA’s used derivatives and came up with a mathematical model for rich people to get richer because they weren’t making enough money thru other fixed returns like T-Bills.
The banks made tons and tons of money by packaging this load of crap and selling them onto pension funds, etc. all around the world.
When people couldn’t pay the monthly minimums and the underlying asset prices stopped rising and began to fall, the whole house of cards came crashing down. The CRA loans to poor folks with small loan balances played a small role. Most of the bad loans were on speculators or on big mortgages
Best answer:
Answer by M Taylor
The root of the problem is that the average American is a moron. Its not PC to say this and plenty of people who profit from those morons will be quick to feign indignation if anyone says it, but it doesn’t make it any less true.
There is a reason that you have more votes for American Idol then the next President of the United States.
Know better? Leave your own answer in the comments!
Question by sweetie pie: a package of nontraded financial instruments can be transformed into a traded financial instrument through the
process of?
a. collateralization
b. repurchasing
c. underwriting
d. securitization
Best answer:
Answer by MuaRung
d. securitization.
Securitization is the process of homogenizing and packaging financial instruments into a new fungible one. (Fungible means being of such nature or kind as to be freely exchangeable or replaceable, in whole or in part, for another of like nature or kind.)
http://en.wikipedia.org/wiki/Securitization
Add your own answer in the comments!
Question by BeachBabe: Why do banks package loans into securities?
a. To spread the risk of default and increase liquidity.
b. To take advantage of tax breaks passed by the Federal Government as part of stimulus packages.
c. Because banking regulations require them to do so.
d. In order to get around adhering to current banking regulations.
Best answer:
Answer by Richard B
mainly because a law called “Glass -Stiegal” that required banks and financial institutions to be separate was repealed only a few decades ago
it allowed them to make bets and sell stuff that no one understood they claimed it was like buying insurance but it was really a scheme
read some robert Reiche and Richard Wolff about the resent history
“frontline had an excellent two hour show about what happened
in short a few people made huge fortunes and everybody else paid for it
Add your own answer in the comments!
Question by nothing: What caused the US to go into a recession?
Why do we have a recession in the US right now?
Thanks for all answers in advance!
Question #81
Question(s) that have been deleted by me because they weren’t numbered right- numbers 2, 16
Question(s) that have been found to be violations- numbers 40
Question(s) that were deleted because no one answered them- none yet
Best answer:
Answer by jason d
It started from the sub-prime lending. Basically countrywide and other large lenders were giving out mortgages to anyone that was applying for them. To transfer this risk on the buyer they often had adjustable rates built into them. As often happens after a couple years as interest rates rise so do the payments. Many of these households began defaulting on the loans. This was exascerbated since the companies like countrywide package mortgages up and sell them off in a process called securitization where they are supposed to classify them into tranches which are good/fair/poor quality. Well instead of classifying these correctly they lumped them all together. When large wallstreet firms like merrill lynch buy these securities and sell them to mutual funds investing in fixed income (like mortgages and bonds) these funds were buying poor quality misleading securities. As more people began defaulting on their loans a lot of people flee from the market to protect the equity they have left. This is exactly opposite what they should do, but investor psychology often gives way to these wild swings. So the government will continue to lower interest rates which will in turn get more people and more importantly businesses borrowing as it becomes a cheaper and cheaper source of financing to businesses. This in turn (theoretically) will lead to cheaper goods for consumers and ultimately get us spending more. Everything in economics is cyclicle.
Give your answer to this question below!
