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52 Words That Explain the Financial Crisis

October 10, 2008 RSS Feed Print

Financial historian John Steele Gordon drops this 52-word bomb right at the end of his WSJ commentary today:

Congress's attempt to force banks to make home loans to people who had limited creditworthiness, while encouraging Fannie Mae and Freddie Mac to take these dubious loans off their hands so that the banks could make still more of them, created another crisis in the banking system that is now playing out.

Tags:: economics,; Wall Street Journal,; credit,; Wall Street

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The same greedy lenders and politicians are now carving up the
$700 billion.

Andy of CA 5:50PM October 15, 2008

How did congress put presssure on Freddie and Fannie without the president being involved? Big Q is how to fix it.....surely not with taxpayer $ unless Taxpayers have a share in the recovery..e.g. Bank stock

Helen James of CO 1:47PM October 15, 2008

I used to originate sub-prime loans. I helped a lot of people get into homes. Neither me or my customers were criminals, but I knew people who DID take advantage of the greed these MBS (Mortgage Backed Securities) generated.
Some folks are just not cut out for home ownership.
The Congress decided MORE deregulation was the answer, even though they KNEW it was a bad idea from the Saving & Loans Crisis of the late 1980's.
Now we, the People, have to suffer.
Info_Junkie

Mike Johnson of IN 1:35PM October 15, 2008

52 Words That Explain the Financial Crisis

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