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  • What Went Wrong in 2008? [View article]
    "Leverage" was not the culprit. Leverage resulted from a fiscal policy that encouraged way too much cheap, easy money. When money is scarce, people safeguard it and use it wisely. When oceans of money are all around, people look for ways to creatively put it to all kinds of marginally safe purposes.

    NO lender would have made a single subprime loan if money was scarce. Same goes for the liars' loans, Alt-A's and most derivatives.

    Read a thousad articles and books on problem solving and they all will offer one piece of advice - it is impossible to solve a problem until one determines exactly WHAT the problem is. With that in mind, all the idiotic "bailout" programs haven't a snowball's chance in hell of solving the problem. Or as our Treas. Sec. puts it - no playbook. Playbook ? They don't even seem to know what game they're playing.

    Keep flooding the economy with easy cheap credit and I'll guarantee the problems will persist.
    Jan 06 09:28 am |Rating: +3 0
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