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Blumenthal and other state attorneys general reached a settlement with Craigslist on the issue; the settlement called for the company to charge people via credit card for any ads that were suggestive in nature so the person could be tracked down if they were determined to be offering prostitution. But Blumenthal remarked that after the settlement, the ads continued to flourish using code words. Blumenthal was co-chair, along with North Carolina Attorney General Roy Cooper, of the State Attorney General Task Force on Social Networking. In 2008, the attorneys general commissioned the Internet Safety Technical Task Force report, which researched "ways to help squash the onslaught of sexual predators targeting younger social-networking clients".
Bernanke speculates that a world wide "saving glut" pushed capital or savings into the United States, keeping long-term interest rates low and independent of Central Bank action. In the years leading up to the crisis, the top four U.S. depository banks moved an estimated $5.2 trillion in assets and liabilities off-balance sheet into special purpose vehicles or other entities in the shadow banking system. This enabled them to essentially bypass existing regulations regarding minimum capital ratios, thereby increasing leverage and profits during the boom but increasing losses during the crisis.
'Nights were atrocious' - Becker recounts time in jail
Ross and the Contract Buyers League were no longer appealing to the government simply for equality. They wanted the crime’s executors declared to be offensive to society. And they wanted restitution for the great injury brought upon them by said offenders.
Losses in the stock markets and housing value declines place further downward pressure on consumer spending, a key economic engine. Leaders of the larger developed and emerging nations met in November 2008 and March 2009 to formulate strategies for addressing the crisis. A variety of solutions have been proposed by government officials, central bankers, economists, and business executives. In the U.S., the Dodd–Frank Wall Street Reform and Consumer Protection Act was signed into law in July 2010 to address some of the causes of the crisis. In August 2008, Blumenthal announced that Connecticut had joined California, Illinois and Florida in suing subprime mortgage lender Countrywide Financial for fraudulent business practices. It is also sought civil fines of up to $100,000 per violation of state banking laws, and up to $5,000 per violation of state consumer protection laws.
Interest on bank deposits held by the Federal Reserve
U.S. households and financial businesses significantly increased borrowing in the years leading up to the crisis. Discover how much property sold for with our comprehensive house price data. How your property compares with similar properties already on the market in terms of price and presentation. Chicago, like the country at large, embraced policies that placed black America’s most energetic, ambitious, and thrifty countrymen beyond the pale of society and marked them as rightful targets for legal theft.
Interbank lending dried-up initially and then loans to non-financial firms were affected. Concerns regarding the stability of key financial institutions drove central banks to take action to provide funds to encourage lending and to restore faith in the commercial paper markets, which are integral to funding business operations. Governments also bailed out key financial institutions, assuming significant additional financial commitments. During the crisis and ensuing recession, U.S. consumers increased their savings as they paid down debt ("deleveraged") but corporations simultaneously were reducing their investment. In a healthy economy, private sector savings placed into the banking system is borrowed and invested by companies. A private sector financial deficit from 2004 to 2008 transitioned to a large surplus of savings over investment that exceeded $1 trillion by early 2009 and remained above $800 billion as of September 2012.
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But black history does not flatter American democracy; it chastens it. The popular mocking of reparations as a harebrained scheme authored by wild-eyed lefties and intellectually unserious black nationalists is fear masquerading as laughter. Black nationalists have always perceived something unmentionable about America that integrationists dare not acknowledge—that white supremacy is not merely the work of hotheaded demagogues, or a matter of false consciousness, but a force so fundamental to America that it is difficult to imagine the country without it.
The crisis can be attributed to several factors, which emerged over a number of years. Excessive consumer housing debt was in turn caused by the mortgage-backed security, credit default swap, and collateralized debt obligation sub-sectors of the finance industry, which were offering irrationally low interest rates and irrationally high levels of approval to subprime mortgage consumers due in part to faulty financial models. Debt consumers were acting in their rational self-interest, because they were unable to audit the finance industry's opaque faulty risk pricing methodology. The FHA insured private mortgages, causing a drop in interest rates and a decline in the size of the down payment required to buy a house. The FHA had adopted a system of maps that rated neighborhoods according to their perceived stability.
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These CDOs pooled the leftover BBB, A−, etc. rated tranches, and produced new tranches – 70% to 80% of which were rated triple A by rating agencies. The 20–30% remaining mezzanine tranches were sometimes bought up by other CDOs, to make so-called "CDO-Squared" securities which also produced tranches rated mostly triple A. The value of American subprime mortgages was estimated at $1.3 trillion as of March 2007, with over 7.5 million first-lien subprime mortgages outstanding.
This resulted in further sales of MBS, which lowered MBS prices further. This dynamic of margin call and price reductions contributed to the collapse of two Bear Stearns hedge funds in July 2007, an event which economist Mark Zandi referred to as "arguably the proximate catalyst" of the crisis in financial markets. On August 9, 2007, French bank BNP Paribas announced that it was halting redemptions on three investment funds due to subprime problems, another "beginning point" of the crisis to some observers. Several studies by the Government Accountability Office , Harvard Joint Center for Housing Studies, the Federal Housing Finance Agency, and several academic institutions summarized by economist Mike Konczal of the Roosevelt Institute, indicate Fannie and Freddie were not to blame for the crisis. A 2011 statistical comparisons of regions of the US which were subject to GSE regulations with regions that were not, done by the Federal Reserve, found that GSEs played no significant role in the subprime crisis. In 2008, David Goldstein and Kevin G. Hall reported that more than 84% of the subprime mortgages came from private lending institutions in 2006, and the share of subprime loans insured by Fannie Mae and Freddie Mac decreased as the bubble got bigger (from a high of insuring 48% to insuring 24% of all subprime loans in 2006).
As part of the housing and credit booms, the number of financial agreements called mortgage-backed securities , which derive their value from mortgage payments and housing prices, greatly increased. Such financial innovation enabled institutions and investors around the world to invest in the U.S. housing market. As housing prices declined, major global financial institutions that had borrowed and invested heavily in MBS reported significant losses. Defaults and losses on other loan types also increased significantly as the crisis expanded from the housing market to other parts of the economy.
Some market observers have been concerned that Federal Reserve actions could give rise to moral hazard. A Government Accountability Office critic said that the Federal Reserve Bank of New York's rescue of Long-Term Capital Management in 1998 would encourage large financial institutions to believe that the Federal Reserve would intervene on their behalf if risky loans went sour because they were "too big to fail." The Community Reinvestment Act was originally enacted under President Jimmy Carter in 1977 in an effort to encourage banks to halt the practice of lending discrimination. In 1995 the Clinton Administration issued regulations that added numerical guidelines, urged lending flexibility, and instructed bank examiners to evaluate a bank's responsiveness to community activists when deciding whether to approve bank merger or expansion requests. Critics claim that the 1995 changes to CRA signaled to banks that relaxed lending standards were appropriate and could minimize potential risk of governmental sanctions. Several steps were taken to deregulate banking institutions in the years leading up to the crisis.
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