The Current Financial Crisis

I interrupt my normally-scheduled news for my opinion regarding the current financial crisis. I've heard many comments regarding the crisis, blaming, or trying to avert blame from, the three major sources of this crisis. In my opinion, those seeking to avert blame upon any of the three has a partisan agenda of their own. I don't, not with regards to this.

The first cause was the greed of the financial institutions. Banks and other financial institutions knew they were making risky loans and buying risky loans, but it was good for the stock options.

The second was the lax lending standards mandated upon Freddie Mac and Fannie Mae by Congress. While it started with a noble goal, home ownership for the less affluent, what it meant was that these institutions were making riskier loans. And Congress refused to act, despite warnings about the potential for those institutions to collapse.

The third was the lack of regulation of the derivatives market. People like Alan Greenspan pushed against regulation, fearing they'd burden the market with over-regulation or cause a panic. This attitude instead let bad investments fester.

None of these three alone were sufficient to cause this problem, but all of them were necessary together. Anybody trying to downplay one of the three probably has an agenda.