Derivatives - of mortgages. Everyone could get a mortgage because of lax lending rules (rules encouraged and promoted by Democrats as a way of extending home ownership to the lower end of the economic ladder). Demand skyrocketed, prices went through the roof, lenders kept lending even when the numbers got downright silly, adjusting ARMs led to a wave of defaults and plummeting prices, which led to the banking crisis. Derivatives played a role at the tail end, but they were not the root cause of the crisis.
On Mon, Feb 2, 2009 at 9:03 AM, Gruss wrote: > > > The unfortunate part is, the facts and numbers in this case are > totally clear: derivatives caused the credit crisis, mortgages were > just the first to hit, and the demand side stimulus is best done > through social programs for the simple reason that poor people spend > because they don't have the option of saving. > ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Adobe® ColdFusion® 8 software 8 is the most important and dramatic release to date Get the Free Trial http://ad.doubleclick.net/clk;207172674;29440083;f Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:287200 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=89.70.5
