Charts SYSTEMS

[gdl]

The real question should be how would the mortgage problem occur just based on the 1970's rule? If there was no toxic bundle? If the brokerage firms didn't play a huge role in cashing in on the housing boom? How much over-leverage was there if you dissect the problem into bank exposure. The CRA had valid reasons for its enactment. I do not believe we would have a world wide debt default solely on the CRA rule. It was an excuse. Is anyone suggesting banks and insurers weren't driven based on greed to look the other way and allow lax requirements? The mantra of the day was housing prices always goes up. How many times did we have to bail out big banks before? In the 70's, way before the CRA was enacted banks had to be bailed out.

Just plain old greed being allowed to build until someone came up with the mother of all trading vehicles. The other factor was the mindset change since the start of the 80's. This was a decade where we replaced cash with credit and as the decades progressed assumed credit and cash were synonymous.