Recession of 2008 and impact on the DR

[cobraboy]

Another interpretation would be that the feds forced them out because of a pattern and practice of red-lining. They were denying or restricting access to capital in neighborhoods that were deemed to be unfavorable because of demographic construction. What does that mean? It means that the people who live in certain zip codes are denied the opportunity to invest their own neighborhood giving it a chance to succeed. By redlining the neighborhood you have doomed the inhabitants to a life of despair because there is no capital available to sustain, improve and stabilize the neighborhood. Now at this point nothing is considered acceptable in that zone. No BID, SBA, Home improvement, home purchases, nor home equity loans are available because the bank doesnt want to underwrite the loan. In one respect banks lose money because they play roulette with their own money overinflating the value of real estate. And on the other hand they undervalue entire neighborhoods or cities based solely on demographic constitution. So unless you are dealing in large amounts of cash nothing gets done. The people who live there have been deemed worthless and not worth the investment in their own community. And that is how ghettos are made.

You have NO idea what running a small town bank is like. My family had the bank from the mid-50's until selling in the early 80's. They never aggressively sought loans. Folks came to them...folks of all colors and backgrounds...for loans for cars, mobile homes, houses, seed and fertilizer, etc. And if they had assets, income, manageable debt and good credit they got their loan. There was no "red lining." And you brought up the PC social engineering aspect that accompanied the evolution of the CRA.

And cobra we still havent talked about the impending implosion in the Commercial Real Estate Market.

My family was also involved in both residential and commercial real estate. I wrote extensively about that before...and how a Congressioanl Act signed by Reagan destroyed the S&L industry in this forum in the past. I'll not repeat.

I have also written about the coming commercial RE problem.

Because you are a newcomer does not mean I am required to re-plow that field.

[cobraboy]

FYI

Interesting read for the weekend. I love this magazine, one of my small obsessions.

Japan's two lost decades: An end to the Japanese lesson | The Economist

P.S. Bob~ I never said Greed was a philosphy, I said it was a fact of capitalisim. Besides, I'm not a bitter socialist, I have accepted that Capitalism is atop of the food chain...

That "greed" is responsible for most of economic development in the world.

Without incentive, there is no reason to produce efficiently.

[ExtremeR]

Greed is not the problem, the desire to wipe out the middle class so they can offer peanuts to the lower class for labour is. For rich guys if they somehow can eliminate labour costs they would without blinking. Gasp.... slavery ended more than a century ago and still...........

[Willowtears]

That "greed" is responsible for most of economic development in the world.

Without incentive, there is no reason to produce efficiently.

Good morning!

CB, thanks to you the wetdreams just kept on coming...I dreamed that you were a really smart intellectual middle age man, some Porfirio Rubirosa, kind of man...my imagination owes the capatalist world so much!

Now, since you love history so much, do you think that capiitalist reach the top of the foodchain by incentives or by imperalist acts?

P.S. I suggest you don't search in wikipedia. Wiki is not really a good source of infomration, stick to your books. Wiki is only good for such things as Sam Worthington, now he blows my imagination!

[bob saunders]

Greed is not the problem, the desire to wipe out the middle class so they can offer peanuts to the lower class for labour is. For rich guys if they somehow can eliminate labour costs they would without blinking. Gasp.... slavery ended more than a century ago and still...........

So said your professor

[bob saunders]

FYI

Interesting read for the weekend. I love this magazine, one of my small obsessions.

Japan's two lost decades: An end to the Japanese lesson | The Economist

P.S. Bob~ I never said Greed was a philosphy, I said it was a fact of capitalisim. Besides, I'm not a bitter socialist, I have accepted that Capitalism is atop of the food chain...

So just which part of socialism appeals to you? Here's some reading to expand your though processes
Capitalism is a social system founded upon individual rights.
http://mises.org/etexts/mises/anticap/section1.asp
The Unfulfilled Promises of Hugo Chavez | Venezuela News

[cobraboy]

Greed is not the problem, the desire to wipe out the middle class so they can offer peanuts to the lower class for labour is. For rich guys if they somehow can eliminate labour costs they would without blinking. Gasp.... slavery ended more than a century ago and still...........

Then who would buy the products?

[RacerX]

You have NO idea what running a small town bank is like. My family had the bank from the mid-50's until selling in the early 80's. They never aggressively sought loans. Folks came to them...folks of all colors and backgrounds...for loans for cars, mobile homes, houses, seed and fertilizer, etc. And if they had assets, income, manageable debt and good credit they got their loan. There was no "red lining." And you brought up the PC social engineering aspect that accompanied the evolution of the CRA.

My family was also involved in both residential and commercial real estate. I wrote extensively about that before...and how a Congressioanl Act signed by Reagan destroyed the S&L industry in this forum in the past. I'll not repeat.

I have also written about the coming commercial RE problem.

Because you are a newcomer does not mean I am required to re-plow that field.

I think over speculation of land destroyed the S&L industry. No congressional act did that.
It isnt PC social engineering to advocate loaning money to vitalize their neighborhood, it is socially irresponsible engineering to deny peopel access to loan based on appearance. Every derelict neighborhood was not always so, It took a combined political, social and economic exercise to create the magnitude of neglect that exists in many American inner cities.

[cobraboy]

I think over speculation of land destroyed the S&L industry. No congressional act did that.

You couldn't be more wrong.

"Tax Reform" under Reagan in the early 80's disallowed using losses on realestate...often accrued after depreciation...as losses against other income. THAT, with one signature, devalued much commercial real estate since one reason for investment was using RE losses against other income.

THAT is what started the S&L collapse.

Period.

It isnt PC social engineering to advocate loaning money to vitalize their neighborhood, it is socially irresponsible engineering to deny peopel access to loan based on appearance. Every derelict neighborhood was not always so, It took a combined political, social and economic exercise to create the magnitude of neglect that exists in many American inner cities.

Certainly political opinions vary, but to REQUIRE banks, under threat of DoJ investigations and bureaucratic delays on acquisition and divsestitures, to loan against properties with a low probability of recouping losses if foreclosure occurred DID indeed cause problems.

The PROBLEM was gubmint PC and social engineering efforts interference in private business.

I understand some folks WANT the gubmint to bring the hammer down on eeeeevil businesses for political purposes, but when gubmint interferes in private business there are usually multiple unintended consequences.

I ask you this: if bankers are the greedy, evil capitalists folks claim, WHY didn't they exploit the bad credit risks long before the gubmint put pressure on them?

And WHY did it take FM/FM guaranteeing about HALF of ALL mortgages to bring it about?

I'm not going any further in this discussion. As I said before, this subject was beaten to death over a year ago.

And no one's opinion will change. The Big Gubmint advocates will still be promoting the benefits of gubmint coercion in private industry for PC and social reasons, and Free Marketers will still be condemning gubmint for causing unintended problems.

Nothing will change.

Be well, X.

[RacerX]

Gasp.... slavery ended more than a century ago and still...........

Imperial and colonial Servitude never ended.