On 2/1/2012 11:20 AM, Tegger wrote:
Hell wrote in :



This has been the subject of much discussion. To sum, it's because
Canada understood the dangers of unregulated financial markets and has
maintained much stricter controls over theirs. Thus, in Canada, there
was no insanely loose lending and widespread fraud by banks, mortgage
lenders, and developers leading to a bubble/bust.




You've got that /quite/ backwards.

Outside of a couple of fairly minor programs, Canada never engaged in the
sort of coercion Congress visited upon lenders in the US, and the sort of
enticements and encouragement Congress and the Fed pushed on American
borrowers.

Congress, the president and the Fed have all collaborated over 80-years
using explicit and implicit methods to force lenders to finance home
ownership, and in forcing lenders to accept lower and lower standards in
order to try and ensure a vibrant and growing housing market.

Dating from the Hoover-era up to the present day, Congress passed such laws
as the
Own Your Own Home Act,
Community Reinvestment Act (amended twice),
American Community Renewal Act,
American Dream Downpayment Assistance Initiative,
all of which were explicitly aimed at pushing people into houses, and at
pushing lenders to lend to them, with penalties for lenders who did not
comply.

Then there were artificially-low rates for credit; speeches by presidents
scolding lenders for failing to lend enough to minorities; mandates forcing
Fan and Fred to buy extremely suspect mortgages; at one point eliminating
the requirement that borrowers show proof of ongoing income; Barney Frank
wanting to "roll the dice" on subsidized housing; forcing Fan and Fred to
buy mortgage securities that all knew full-well were "opaque and difficult
to understand". I could go on and on.

The crisis was not caused by lack of oversight, but by WAY TOO MUCH OF IT,
especially after 2001.

Congress needs to /butt out of the whole business/ instead of running the
show.


I don't think The Canadian government forced Affirmative Action lending
on their banks like The U.S. government did to U.S. banks. I could have
gotten one of those Affirmative Action loans but knew better because if
something happened to me, I would not be able to make payments. Sure
enough, I was injured and unable to work as I had been working and it
would have wiped me out. o_O

TDD