Relevant and even prescient commentary on news, politics and the economy.

Subprime and the crisis

Financeaddict comments on a St. Louis Fed study: Their research asks whether there’s evidence that lenders changed their behavior to meet CRA, Fannie or Freddie-mandated goals by: making more subprime loans than they otherwise would have? lending to riskier borrowers than they otherwise would have? charging risky borrowers less than they otherwise would have? …If […]

Fannie and Freddie and William Black

William Black writes this post Fannie and Freddie’s Managers bought Nonprime Paper for the same Reason Merrill Did: (hat tip Rebecca) This subdivides into four arguments: the Community Reinvestment Act (CRA), Congress’ rejection of an administration proposal to give OFHEO greater supervisory powers, specifically, the power to place Fannie and Freddie in receivership, the ability […]

Simple Answers to Simple Questions, CRA edition

Dear Barry: The need for posts such as this one recurs because the large majority of economists are idiots. (Multiple exceptions noted—but not enough to change the truth of the initial statement.) As the regulatory reform report notes (quoted by PK at the last link above): In fact, enforcement of CRA was weakened during the […]