CRA not the cause of Subprime meltdown.

"As Barry Ritholtz notes in this fine rant, the CRA didn't force mortgage companies to offer loans for no money down, or to throw underwriting standards out the window, or to encourage mortgage brokers to aggressively seek out new markets. Nor did the CRA force the credit-rating agencies to slap high-grade ratings on packages of subprime debt."
http://www.slate.com/id/2201641

The CRA, Community Reorganization Act, helped create the less-so but still-profitable subprime lending market to minorities in 1977. It remained stable for nearly 20 years. In 1995, Clinton altered the act to allow for slightly riskier loans – Bear Sterns (note, not covered by CRA regulations anyway) lead the way in using this law change to aggressively enter this market. From 1997 to 2002, the subprime rate rose to and stabilized at about 10% of the overall market. In 2000 Phil Gramm, one of the John McCain’s chief economic advisers wrote the Securities Modernization Act, which introduced Default Credit Swaps – insurance on loans that wasn’t called insurance so that it wouldn’t be regulated, and responsible for trillions of dollars of the current problem. In 2002, Clinton’s changes were up for review, but Bush did not review them. From what I can find, he didn’t act on the review period at all.

In 2003, Bush noted that Fannie and Freddie’s subprime loans were getting to be too large of their overall holdings, and tried to get oversight of the two entities moved from congress to the Treasury Department. This action failed, no doubt because handing over more power to the Executive branch in 2003 was not likely to happen. This action did not do anything about the public mortgage marketplace, just the FM’s.

In 2005 the Bush administration, via the Office of Comptroller of Currency enforced for the first time, a 1860’s law which allows federal oversight of banks to supersede state-level regulation. All 50 state AG’s and all 50 state Banking Commissioners objected to this action, which prevented state-level regulations from being enforced. Also, the CRA was amended to only apply as it had previously to banks with assets >$1B, instead of all banks with assets greater than $250M as it had previously, and allowed mortgage banks to leverage themselves beyond the 10% threshold that had previously been in place (Lehman Bros was at 33/1 when it fell over). At this point, subprime lending increased from ~10% of the mortgage market to ~25% as of the beginning of this year.

More than half of subprime mortgages were made by institutions either not covered by the CRA (independent mortgage brokers) or only partially covered (bank subsidiaries), and 40% of all home purchases in 2006 were not primary residences – a record number.

Large Majority of Economists Support Obama's Economic Plan

In a follow-up to the previous post, The Economist reports significant favor for Obama's plan among respondents to a poll of economists nationwide.

This graph says it all:

From The Economist:
"Examining America's Presidential Candidates
http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=12342127

Economists Favor Obama

Right-leaning Libertarian cartoonist Scott Adams, creator of the tech-office strip Dilbert, has commissioned a survey of economists to determine which candidate the classic super-geeks favored with regard to long-term economic benefits and other social issues.

Obama came out on top in nearly every category, and even though the sample was heavily democratic, that's only because apparently, most economists are democrats, nationwide.

That last bit's news to me, too.

http://www.cnn.com/2008/POLITICS/09/16/dilbert.economy/index.html

BPA (chemical in many plastics) Slows Brain

http://www.treehugger.com/files/2008/09/bpa-makes-you-stupid.php

"It dramatically impairs the formation of synapses in the regions of the brain important to learning," biomedical science professor Neil MacLusky [of the University of Guelph] said.

Nalgene, maker of super-tough water bottles for recreational use, recently began selling BPA-free bottles, I recommend them.
http://www.nalgenechoice.com/

Obama to make VP part of the Government again

Obama has promised to make his VP part of the executive branch of the government - not an undefined fourth branch, as created by VP Cheney in avoiding punishment for his questionable if not outright illegal activities. A VP that's part of the Executive branch - as the office had previously been since the 1700's.

It's sad that I'm excited by the idea of a president that actually wants to follow the constitution, but that's where we stand.

*sigh*


http://www.thetimes.co.za/News/Article.aspx?id=826159

The state of cheap laptops

The idea was this: provide for poor schools all the books they didn't have. Math, History, Language.

But it was not an easy task. How do you get hundreds of text books, weighing thousands of pounds, to the far reaches of the world? And what did you do when the information in them became outdated?

The concept was to give, instead of 5 pound books, one 3 pound laptop - low powered (with hand-crank and solar options so that it would even work in areas with no electric grid), rugged (water resistant and sand resistant), with a connection to the internet (and it's thousands, no, thanks to Google, millions of books) - and sell it for $100.

The idea from one Nicholas Negroponte from MIT was ground breaking. And with a cadre of volunteers, he delivered. Using a low-powered AMD Geode processor, a free Linux-based Operating System, and a fantastic screen that worked out in the sunlight, the OLPC (One Laptop Per Child) XO laptop was born.

Right out of the gate it sold fast, to schools in South America and Africa. Unfortunately, as orders for the XO computer started pouring in, businesses suddenly realized that Negroponte was right - there was a large untapped worldwide market for low-cost computers. And that was the projects undoing.
http://technology.timesonline.co.uk/tol/news/tech_and_web/article4472654.ece

Today, there are a number of entrants into the low-end laptop market. While Intel's post-OLPC project, the Classmate PC, was gobbling up marketshare around the world thanks to the slightly stronger hardware and the great power of Intel's marketing arm, Asus's Eee PC came out of the gates like a bull - their small, standard component laptop sold for $300 to anyone who wanted it (OLPC and Intel were selling only to schools), and the public ate them up.
http://www.pcconnection.com/IPA/Shop/Product/Search.htm?term=asus%20eee&DefSort=Y&searchFilter=ALL

Acer has also entered the low-cost laptop recently, relying on Intel's Atom low-powered processor.
http://arstechnica.com/reviews/hardware/atom-nano-review.ars

The result is a good competitor to the EeePC, with a bit more power for just a bit more money:
http://www.pcconnection.com/IPA/Shop/Product/Detail.htm?sku=8708409

OLPC is most likely dead, though the technology may live in in other projects; Mr Negroponte's idea certainly changed the landscape of low-cost computing. Sadly for the school children of the world, the lowest-cost computing system - also the one built with harsher environments in mind - will not be a part.

The Year of Living Biblically

What happens when an agnostic follows all the rules of the Bible for one year? He finds that belief isn't a requirement for sacredness to be useful.

http://www.ted.com/index.php/talks/a_j_jacobs_year_of_living_biblically.html