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Wednesday, October 1, 2008

How the crisis developed, in plain English

Pretty plain, anyway.

Meanwhile, if your blood isn't boiling yet today, here's a story to heat it up.

For an even more depressing read, there's this.

And I think this fellow crystallizes my thoughts pretty well.

Comments (4)

I thought the last article by the Harvard guy was most interesting even though I would still love to hear his solution besides this.

I ahve to take issue with his one statement:
"Congress pushed mortgage lenders and Fannie/Freddie to expand subprime lending."
While the govt may have enabled it, I don't think anyone was forcing banks to write these loans outside of greed for higher returns.

And, as many people have noted, most of the subprime was done by mortgage brokers, not banks, so there was no community reinvestment act pressure there.

The focus on borrowing and lending practices is partly a diversion. It was the creation of a "derivative" market that made this into a house of cards, and that was a creature of deregulation. Lending practices came into play when this pyramid scheme required a steady stream of new loans.

Here's my commentary on DailyKos last week.


This is a much better take.

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