Comments on: Who is Responsible for the Housing Bubble? http://wealthfly.com/blog/2007/03/23/who-is-responsible-for-the-housing-bubble/ A blog for investment advisors, brokers and financial planners. Tue, 06 Jan 2009 06:44:10 +0000 http://wordpress.org/?v=2.3.3 By: Matt Abar http://wealthfly.com/blog/2007/03/23/who-is-responsible-for-the-housing-bubble/#comment-86 Matt Abar Fri, 30 Mar 2007 21:44:06 +0000 http://wealthfly.com/blog/2007/03/23/who-is-responsible-for-the-housing-bubble/#comment-86 I go back and forth on Ron Paul. I think he's right about the fed being the underling cause, although you're right that the investment bankers should share the blame. However, his ultra-Libertarian stance that the fed should be eliminated goes too far for me. As far as going back to a gold standard, it's moot. We don't have enough gold (or anything else for that matter) to back up all the US currency out there so it's pointless to talk about it. In general, I'm glad Ron is around. Right or wrong, he is an independent thinker and it's nice that we still have one or two of them in Congress. He also doesn't suffer lobbyists which is more than you can say for most other Congressmen. I go back and forth on Ron Paul. I think he’s right about the fed being the underling cause, although you’re right that the investment bankers should share the blame. However, his ultra-Libertarian stance that the fed should be eliminated goes too far for me.

As far as going back to a gold standard, it’s moot. We don’t have enough gold (or anything else for that matter) to back up all the US currency out there so it’s pointless to talk about it.

In general, I’m glad Ron is around. Right or wrong, he is an independent thinker and it’s nice that we still have one or two of them in Congress. He also doesn’t suffer lobbyists which is more than you can say for most other Congressmen.

]]> By: Bill Ramsay http://wealthfly.com/blog/2007/03/23/who-is-responsible-for-the-housing-bubble/#comment-82 Bill Ramsay Wed, 28 Mar 2007 12:40:35 +0000 http://wealthfly.com/blog/2007/03/23/who-is-responsible-for-the-housing-bubble/#comment-82 Wow, that is one of the most ignorant comments on the Fed that I believe I've ever seen from someone who should not be ignorant, though I suppose thinking politicians shouldn't be ignorant is a bit of a stretch. Actually I've read about some politicians spouting off in the 1930's about the cleansing nature of a too tight money supply to purge immoral behavior, so I guess ignorance has a long and storied history. The investment bankers are primarily responsible for the subprime crap as they created the CDO's and CMO's that basically disguised the risk of the loans to investors and made them look attractive to unsophisticated borrowers (and the other shoe that is falling are the sophisticated borrowers who overspeculated on high end properties- anybody want a McMansion or a luxury condo for cheap? Beachfront?). Greenspan could have been a bit more proactive when the tech bubble was inflating, perhaps a boost to margin requirements may have pricked it before it got so big. That then may have made it unneccessary to lower rates so far as the threat of a deflationary spiral may not have materialized in 2001-2002. I shudder to think about what the congressman would suggest as a substitute for the Fed setting monetary policy. He might want to do something silly like base money supply on the amount of a yellow metal that can be dug out of the ground and stored in a vault. I suppose Paul is right about capitalism being the primary culprit. The lending industry will always go through phases of excess, and now the banking system has very little control over many areas since much lending activity occurs through securitization. I hope we don't end up with even more papers to sign at a mortgage closing, its already so excessive that an unsophisticated borrower has no chance of understanding. Wow, that is one of the most ignorant comments on the Fed that I believe I’ve ever seen from someone who should not be ignorant, though I suppose thinking politicians shouldn’t be ignorant is a bit of a stretch. Actually I’ve read about some politicians spouting off in the 1930’s about the cleansing nature of a too tight money supply to purge immoral behavior, so I guess ignorance has a long and storied history.
The investment bankers are primarily responsible for the subprime crap as they created the CDO’s and CMO’s that basically disguised the risk of the loans to investors and made them look attractive to unsophisticated borrowers (and the other shoe that is falling are the sophisticated borrowers who overspeculated on high end properties- anybody want a McMansion or a luxury condo for cheap? Beachfront?).
Greenspan could have been a bit more proactive when the tech bubble was inflating, perhaps a boost to margin requirements may have pricked it before it got so big. That then may have made it unneccessary to lower rates so far as the threat of a deflationary spiral may not have materialized in 2001-2002.
I shudder to think about what the congressman would suggest as a substitute for the Fed setting monetary policy. He might want to do something silly like base money supply on the amount of a yellow metal that can be dug out of the ground and stored in a vault.
I suppose Paul is right about capitalism being the primary culprit. The lending industry will always go through phases of excess, and now the banking system has very little control over many areas since much lending activity occurs through securitization.
I hope we don’t end up with even more papers to sign at a mortgage closing, its already so excessive that an unsophisticated borrower has no chance of understanding.

]]> By: Mike Benson http://wealthfly.com/blog/2007/03/23/who-is-responsible-for-the-housing-bubble/#comment-78 Mike Benson Mon, 26 Mar 2007 14:07:01 +0000 http://wealthfly.com/blog/2007/03/23/who-is-responsible-for-the-housing-bubble/#comment-78 Fortunately, I live in the 22nd most dangerous place. That puts me roughly in the middle of the pack. However, I am also in the foreclosure capital. Strange things happen in a foreclosure environment, very high rents and falling house prices. Fortunately, I live in the 22nd most dangerous place. That puts me roughly in the middle of the pack. However, I am also in the foreclosure capital. Strange things happen in a foreclosure environment, very high rents and falling house prices.

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