To the say that Fannie & Freddie combined with the FED low rates caused the crisis, I read this (keynesian?) answer, is it correct? ''Agency origination only accounted for less than half of all MBS securitizations in 2005 and 2006 leading up to the crash. The rest of that Pre-2009 vintage consisted…

First and foremost, you have to question the logic of such a claim. Even if you yourself do not have hard data to go on, I would ask him this…why, all of the sudden, did lenders randomly abandon sound lending and underwriting practices when the statistics say that this single mother could never pay …

In addition to what Texas asked, another question to consider is if interest rates had been higher, say 8%, 9%, 10%, would these loans have ever been made? Would they have ever been brought into existence? That quesiton, along with why the banks were so willing to make the risky loans, are the 2 key…

Just as an aside, the usual answer to the above questions is: Greed! To which you can calmly ask why it was only in this particular industry that greed caused such a problem. To borrow an analogy from Tom Woods I think, greed is like gravity, present everywhere on the Earth at all times. So yeah, g…

Cause of the crisis rebuttal

Economics Economics Questions

John_James April 23, 2012, 4:50pm 4

For an overview of the crisis and links to resources, see here.

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Cause of the crisis rebuttal

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