Sunday, October 26, 2008

Who to blame for the Credit Crisis

A house was bought for $750,000 in 2006. It's now worth $400,000. The seller took advantage of a good market. The buyer did not pay a good price for their new property. The buyer had the responsibility to agree to a fair price. They could have gotten erroneous information from an appraisal. The banker probably should not have given a zero percent loan for an overvalued asset. The investment bankers and other financial wizards were taking advantage of a favorable market to create advanced securities from mortgages. The US government cannot be held to blame for creating a low inflation environment; this probably had other economic benefits including job growth.

Other Point of Views:
Steve Forbes

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