Of course it did lead to risky lending. Obvious to the least casual observer. A no-brainer.

I´m sure that this will be the top story on tonight´s newscast at all the media outlets! /s

So when is Obama going to start blaming (drumroll please) Clinton!

Obama was the attorney representing a group of low income would be borrowers who sued to force banks to lend to them even though they did not qualify. He is at the heart of the problem.

Now that they have quietly reactivated the CRA we will get to see history repeat itself.

A study was not needed. It was obvious.

In 1999 I was at a late night party chit-chatting with a guy who was a mortgage lender. He was lowest man on the totem pole in his company. He sold to the borrowers and wrote the paper. But he predicted everything in that fifteen minute conversation. Housing bubble. Pyramid scheme. Home prices inflated. Eventual collapse. Banks in trouble. Many mortgage defaults. And all because they were under pressure to make these loans from multiple Clinton administration departments. Most of which were acting to enforce the CRA. He also claimed that redlining was a fiction. We were talking about it because the Atlanta news had a story about 200 loans which had been done by a local bank a few years before due to pressure from local protesters and all 200 loans had now defaulted. His bosses didn´t want to make the now-known-as-sub-prime loans they were all making but it was either that or the government shut them down.

Wish I had gotten his name. I look back now and it was like he had landed from the future. But the truth is - it was all obvious at the time to anyone with a brain. And it was all spelled out in a late night conversation standing next to a pony keg.

Every bank exam report would include a reference to the very public Community Reinvestment Act report, it would beat up the bank over a low rating. Then, when the loans turned into a steaming pile of you know what, it would downgrade their rating.

So, banks got some smarts. Had investment bankers spread the "risk" with swaps, real estate investment trusts (REITs) joined the party.

It should have worked, except for one thing: If you have nothing to lose when you buy a property, you don´t care whether you make a payment or not.

When that happens, it crashes.

Gee, Chris Dodd and Barney Franks must be sooooo proud. s/o

Well duh. Examiners are not your friend if you are a banker. Run a good shop with a clean portfolio and you are caused of not serving you whole market and given an unsatisfactory rating. Have the capital and want to expand, well too bad because you have an unsatisfactory rating.

So you loosen your credit standards an what do you know loan quality takes a dump on your balance sheet. Then you are advised to take "prompt corrective action" to cure the deficiencies that only exist because you were trying to get a favorable rating to pursue an expansion. Well that is no longer an issue because you had to replentish your loan loss reserve due to the losses from that special group of loans. Bottom line, don´t let a regulator run your bank.

Just a few thoughts from an Old School Banker.

This is stunning news. Hey, you don´t suppose those Credit Derivatives are not worth as much as they say?

Well at least the smashing of the global financial system, the utter destruction of lifetime savings, the dooming of retirees, was for a good cause. The mega ripoff of trillions for corrupt bankers, politicians and their cronies.

Under the democrats and Obama, common sense is lost. The banks complied with the CRA and immediately sold those mortgages to a greater fool.

It doesn´t matter. The narrative has been established. "The worst financial disaster since the Great Depression" was caused by tax breaks for the rich and deregulation. More people believe this than know the truth and in our brave new world, the truth is whatever Obama wants it to be.

McCain had a chance to get Democrat culpability on the record when he was running for President. He demurred with the usual "reach across the aisle" Barbara Streisand.

Now the Dems, with kneepad media help have pinned it on the Republicans.

I´ll never forgive McCain for that.

Yeah, we´ve got a high ´duh´ factor here.