there were derivative instruments that have been around for decades.
kg, there's blame all around. the lenders who didn't care about true underwriting because they pushed the paper out the door as soon as it closed. borrowers who convinced themselves they could afford a house that they really couldn't. mortgage brokers who falsified incomes to close the loan. borrowers who believed the rise in home prices would never end so they could always refinance the appreciation out.
I don't blame the government, with the deregulation brought by gramm's bill they were on the sidelines.
and I don't blame greenspan and the fed either. "cheap money" is not in itself the boogeyman.
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