Sadly, he showed his true partisan colors yesterday on Bloomberg TV when he reiterated -- at least three times -- that the cause of our recent economic near-death experience was "the government forcing banks to make loans to people who never should have gotten them in the first place" (e.g. The CRA made me do it). That canard has been discredited so many times, for so long, by so many people -- including members of the Fed and bank execs themselves -- that I couldn't even believe Gartman was going to try to breathe life into it. But there he was.
Sorry, Dennis, I think many folks lost a great deal of respect for you yesterday. I know I did. Credible pundits should take better care to separate their politics from their economic analysis. The two don't belong together.
Cites:
Federal Reserve: "In the end, our analysis on balance runs counter to the contention that the CRA contributed in any substantive way to the current crisis."
Ken Lewis, BofA CEO: "But the charge that CRA lending was the primary or foundational cause of our housing crisis is not only unfair, it’s not true. [...] There’s no mandate to make risky loans, or to abandon sound lending principles. [...] Many reports and investigations, including a Fed report in 2000 and our own experience over the past 30 years, have found that CRA lending can be profitable, and need not be overly risky. The riskiest subprime lending of the past ten years didn’t have anything to do with CRA… in fact, 75% of high-priced loans made by mortgage companies and bank affiliates in recent years were not covered by CRA."
Literally dozens of others all over the web.
From Bonddad: This is one of the basic problems with the US: pure stupidity and a need to explain everything through a partisan lens. The causes of the financial wreckage of 2008 were numerous. In essence, to understand them you have to be aware of how multiple events can play out. This requires thinking beyond labels and talking points. That is not possible in today's political environment.
