Re: [tlug][OT] Free markets

[Edward Middleton <emiddleton@example.com>]

david.blomberg wrote:
>> in the S&L crises in the US and Japan, Congress pushing hard to get
>> industry to lend to subprime borrowers in the current mess).  It's not
>> clear that *any* of them would have happened if the market had been
>> left to its own devices.
>>   
> You are aware that this failed the laugh test.
>   A few years ago I sat in on a investment seminar.  It was to sell
> the sub-prime investments to the Japan/Asian market.  The speaker
> cited that a few years earlier they were shut down by the government
> of the US under the guise of predatory lending.  The sub-prime was a
> reworked version that "fixed" the predatory nature and allowed them to
> make loans to people of questionable credit.  This was accomplished by
> giving them an initial loan that would increase their credit score so
> they could give them the full loan.

Well wikipedia[1] and presumably the New York Times[2] supports what Dr
Turnbull said.  Could it not be that the situation you mentioned was the
result of enforcement existing laws and not action by Congress?

Edward

1. http://en.wikipedia.org/wiki/Subprime_lending#Proponents
2. Holmes, Steven A., "Fannie Mae eases credit to ease mortgage
lending," /New York Times/, Sept. 30, 1999