Why is THIS the truth? Have you any other information to back up the fact that Fannie and Freddie were innocent and had nothing whatsoever to do with this economic crisis.
Interesting...from your Factcheck article, they don't seem to blame Fannie or Freddie:
The Real Deal
So who is to blame? There's plenty of blame to go around, and it doesn't fasten only on one party or even mainly on what Washington did or didn't do. As The Economist magazine noted recently, the problem is one of "layered irresponsibility ... with
Soxes, I want to take a little issue with you. I agree that the cheap interest rate the fed had was one of the culprits, but not because of the bubble. It was because the govenment bonds paid such a low interest rate. The 70 trillion dollars wanted a higher rate of interest, with safety. Once the interest rate was set as low as it was on the treasuries, and the bond rating companies rated these derivitives as AAA, as good as money, the present problem was a foregone conclusion.
Think of that money supply as an idiot. Or, perhaps a very primitive animal. Once the animal senses good food, and safety, the run to the new waterhole was inevitable. Then the animal got burned. So, like Mark Twain's cat, it set on a hot stove and now it won't set on any stove.
"Nice doggy. Good food over here in the credit market again. No one will hurt you. Just have some yummy, yummy food. Good boy."
Large groups, although made up of some very smart people, are essentially very primitive animals.
I think we are basically in agreement. The low fed rate encouraged fly-by-night mortgage companies to write ARM mortgages for 4 to 5 % or so. These became an attractive investment vehicle because the fed rate was so low.
What touched all of this off, and it was through no fault of the Fed, was when inflation started to creep up due to the speculation in commodities, especially oil and copper. The Fed under Bernanke started raising interest rates to offset this, and as the first of the ARM mortgages started coming due for reset it was at an interest rate that homeowners couldn't afford.
Bernanke is one of the few things that Bush has done right. He has been doing a bang-up job, he knows history, especially the history of the Fed in 1929 and thereabouts.
dablacksox
Cynic: a blackguard whose faulty vision sees things as they are, not as they ought to be.---Ambrose Bierce, The Devil's Dictionary.
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Deregulation was the reason?
http://www.factcheck.org/elections-2008/who_caused_the_economic_crisis.html
Sopal
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Interesting...from your Factcheck article, they don't seem to blame Fannie or Freddie:
So who is to blame? There's plenty of blame to go around, and it doesn't fasten only on one party or even mainly on what Washington did or didn't do. As The Economist magazine noted recently, the problem is one of "layered irresponsibility ... with
Sopal
<?xml:namespace prefix = v ns = "urn:schemas-microsoft-com:vml" />
dablacksox
Cynic: a blackguard whose faulty vision sees things as they are, not as they ought to be.---Ambrose Bierce, The Devil's Dictionary.
dablacksox
Cynic: a blackguard whose faulty vision sees things as they are, not as they ought to be.---Ambrose Bierce, The Devil's Dictionary.
Soxes, I want to take a little issue with you. I agree that the cheap interest rate the fed had was one of the culprits, but not because of the bubble. It was because the govenment bonds paid such a low interest rate. The 70 trillion dollars wanted a higher rate of interest, with safety. Once the interest rate was set as low as it was on the treasuries, and the bond rating companies rated these derivitives as AAA, as good as money, the present problem was a foregone conclusion.
Think of that money supply as an idiot. Or, perhaps a very primitive animal. Once the animal senses good food, and safety, the run to the new waterhole was inevitable. Then the animal got burned. So, like Mark Twain's cat, it set on a hot stove and now it won't set on any stove.
"Nice doggy. Good food over here in the credit market again. No one will hurt you. Just have some yummy, yummy food. Good boy."
Large groups, although made up of some very smart people, are essentially very primitive animals.
LOL of course it's an oped, the "facts" are
I think we are basically in agreement. The low fed rate encouraged fly-by-night mortgage companies to write ARM mortgages for 4 to 5 % or so. These became an attractive investment vehicle because the fed rate was so low.
What touched all of this off, and it was through no fault of the Fed, was when inflation started to creep up due to the speculation in commodities, especially oil and copper. The Fed under Bernanke started raising interest rates to offset this, and as the first of the ARM mortgages started coming due for reset it was at an interest rate that homeowners couldn't afford.
Bernanke is one of the few things that Bush has done right. He has been doing a bang-up job, he knows history, especially the history of the Fed in 1929 and thereabouts.
dablacksox
Cynic: a blackguard whose faulty vision sees things as they are, not as they ought to be.---Ambrose Bierce, The Devil's Dictionary.
dablacksox
Cynic: a blackguard whose faulty vision sees things as they are, not as they ought to be.---Ambrose Bierce, The Devil's Dictionary.
Pages