Who is to blame for the credit crunch?
Tuesday, March 31st, 2009Considering that subprime mortgage lenders were not regulated where due diligence on extending credit to individuals was unchecked, who is to be blamed for this? when lenders found that the debt was of poor quality, they simply kept selling their portfolio to banks and hedge funds to throw the debt on their books and gain immediate profit.
Where was the SEC or Fed Resv to ensure compliance? for the past 5 years or so, the R.E.market has been booming.Were they not aware that the bulk of the industry was fueled by low interest rate offers 3/27 financing schemes? how stupid was the Government to sit back and not realize the growing risks? Now that the sh** has hit the fan are the NECONS ( SEC/Fed Resv) starting to probe into this issue. Typical typical ! now we are in a free fall. Do you think that the USD 38Bln dollar injection of the Fed reserve will solve this problem? its only a temporary solution to liquidity.