[quote=markmax33]
How about the Federal reserve artificially lowering interest rates after the .com bubble? Explain that one away. The money flowed straight out of the stock market and into the housing market to create the next bubble instead of letting the tech bubble completely fail.[/quote]
How about it?
How about the repeal of glass-steagall that allowed Wall Street unfettered access to product to fill an insatiable demand in order to collect billions of dollars in fees for creating mortgage backed securities? How about the virtual disappearance of underwriting standards? How about loan brokers and agents who knowingly and willfully prepared loan applications for their clients to sign which they knew contained lies? How about mortgage lenders who paid more to those that brokered bad loans than those who brokered good loans? How about real estate agents who encouraged buyers to buy property that they knew their clients couldn’t afford and told them not to worry because they could always refinance when the teaser rates expired? How about buyers who knowing lied on their loan applications? How about the debt rating agencies who collected huge fees to grant their seal of approval on debt instruments they either knew, or should have known were of low quality. How about investment advisors who collected commissions and fees for telling their investor clients to buy crappy mortgage backed securities? How about clients who did no due diligence on the investments they were making?
In the current economic model there is no such thing as “real” interest rates. The Fed has control of some interest rates. The open market controls some. The financial markets control others. If you think the Fed was the driving force behind the bubble, you’re sadly mistaken. They were a piece of a puzzle. Nobody was blameless.
