And yet none of it would have been a problem if those finance companies and their investors were left on the hook for the results of their actions.
The would have gone out of business and lost their investments, there would have been a temporary blip in the economy as it adjusted to the event and everyone would have gone on that much the wiser on how foolish those risky investments were.
Further one cannot possibly understate the role that government agencies Freddie and Fannie played in encouraging, practically even demanding that lenders make these ridiculous loans.
As long as the one taking the risk is the one who will realize the loss there is no need for government regulation to prevent an activity, the problem is government regulations were created to specifically interfere with this risk-loss relationship thereby encouraging risk by socializing much if not all of the losses.
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The would have gone out of business and lost their investments, there would have been a temporary blip in the economy as it adjusted to the event and everyone would have gone on that much the wiser on how foolish those risky investments were.
Further one cannot possibly understate the role that government agencies Freddie and Fannie played in encouraging, practically even demanding that lenders make these ridiculous loans.
As long as the one taking the risk is the one who will realize the loss there is no need for government regulation to prevent an activity, the problem is government regulations were created to specifically interfere with this risk-loss relationship thereby encouraging risk by socializing much if not all of the losses.