On Oct 7, 8:06*am, Stephen Trapani wrote:
....
A tiny bit of research about the banking crisis reveals that it was not
the free market that caused it, it was *over* regulation (primarily
fannie and freddie) which compelled banks to provide mortgages to people
who did not qualify. When the housing market slumped millions of these
people defaulted because there mortgages were worth more than their
property. ...


A tiny bit more research will show any honest person that neither the
numbers nor the history work for the thesis that F&F are the primary
causes of the crisis. F&F aren't blameless but dollarwise they are
about 10% of the problem at the housing level despite holding about
half of all housing loans and the 600 billion (give or take) Alt-A/sub-
prime market has been leveraged into a 60 ish trillion dollar problem
with CDO, CDO', CDO'' and CDS's. The collateralized debt obligations
and their square and cube derivatives and the credit default swaps
were all traded in a unregulated market. (still would be if the
market hadn't evaporated).

For the anti-gov't folks a more defensible argument is that the
problem was cause by the Fed juicing the economy for the last eight
years. But, the issues run deeper than just that, too.

--Tom.