phil from Edmond

Financial Crisis: Remembering What Got Us There Is Critical

This article is excellent. Your point on European banks is important. Another fact to consider is that the AIG credit default swaps supported the European banks leveraged position. Another point I would suggest is how truly benign was the US trade deficit?

The Fed was of the opinion that the US was satisfactorily repatriating these dollars. But in actuality the returning dollars were stimulating the irrational housing market.

In Europe, the banks were lending heavily to Eastern European economies.

The Fed and the G20 thought they had a workable system and were successfully transitioning China, India and Eastern Europe into the capitalist system. They were wrong.