RE: [RT] Time to end hedge funds?

["Jim Ross" <jrosscpa@xxxxxxx>]

Had there not been free money at FNMA/FRE for people who couldn’t afford a loan, there would not have been $97 T of derivatives that were developed to lay off that $5T of loans.  Pyramid. 

 

But, the government was giving away free money and people were willing to take it; homeowners and real estate.  Look at Greenspan’s testimony before Congress in 2005.  He explicitly warned them.  Of course, Greenspan with a 0 economic interest rate policy was not without blame as well.  But on top of his testimony that FNMA/FRE would cause great and devastating problems, Barney Frank, Chris Dodd, et al said there was no problem.  And they blocked all regulation of FNMA/FRE.

 

From: realtraders@xxxxxxxxxxxxxxx [mailto:realtraders@xxxxxxxxxxxxxxx] On Behalf Of hbernst963@xxxxxxx
Sent: Wednesday, October 08, 2008 9:36 AM
To: realtraders@xxxxxxxxxxxxxxx
Subject: Re: [RT] Time to end hedge funds?

 

There is a lot of blame to go around in this crisis. To blame it on the
government is ridiculous, IMO. There are many players in this- Wall Street
speculators, lax government supervision, mortgage lenders giving money to people
who couldn't afford to pay for houses, etc.

What we are seeing is a normal long term cycle of credit expansion and
collapse. See the depression of 1835-42, the Panics of 1873 and 1890 and of
course, 1929-1932.

Howard Bernstein

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