Post a New Topic
The underlying causes of the financial meltdown - a serious discussion
Original post made
by Gary, Downtown North,
on Sep 28, 2008
In the spirit of an objective debate, without inflammatory rhetoric, I would like to ask posters, from various perspectives, to peel back the skins of the onion, and suggest how they think this thing got started. Not so much who is at fault, although fault could be ascribed in a non-inflmmatory way, but mechanisms that went wrong.
I have already suggested that it started with Fannie/Freddie attempts to loosen standards (with CRA), and push low-cost housing. F/F were among the first major packagers of securitized bundles of loans. Wall Street could smell profit potential in such packages, and it went to town with various derivitizations. All of the above only works in a bubble.
What are other people's ideas/analysis?
Please keep it respectful. We can all flame out each other on other threads.