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Pathology of a Economic Catastrophe

• NY Times
The coroner’s report left no doubt as to the cause of death: toxic loans.

That was the conclusion of a financial autopsy that federal officials performed on Haven Trust Bank, a small bank in Duluth, Ga., that collapsed last December.

1 Comments in Response to

Comment by Ducati Jeanne
Entered on:

There's more to this:

Untill the mid-90's banks had a mortgage success rate of 94.4 to 96.6%.  Everyone filled in the same forms and was judged on the same merits on mortgage qualification.  Banks made money available to people who could pay it back.  In the interest of Diversity the measure of a banks success was - legislated - to become  mortgages  awarded by percentages of the race of the neighborhood the bank did business in.  More poor people could own their own homes.  The bankers - local, not Wall St. - told the regulators they'd be broke in 5 years.  Regulators came up with the mortgage guarantee trust (taxes), and the bankers said - "okaaayyy          ".  Now all one needed for a mortgage was a name on a 3x5 card.  No record of earnings, no job, not even a citizen.  Some creative thinkers realized they could own more than 2 or 3 or 5 houses.  And so they did.  The beginning of the end was when the realization that a mortgage meant - payments - welfare wasn't enough.  Free housing allowance wasn't enough.  Oh! The horror!  The big bankers bought out some of the smaller ones at discount, and from there went to the gov't  by the means most people have become familiar with.

This was set in motion by the Clintons.  Were they really just trying to be nice to poor people and made an honest mistake?  Or, being the Alinsky acolites they were, did they see a way to deliver the country a blow that would shake the people's faith in a system that had been working well and deliver it to Marxism?

Buck Norton 

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