Saturday, September 20, 2008

Articles I found interesting on the Financial Crisis...

The Real Culprits In This Meltdown
By INVESTOR'S BUSINESS DAILY Posted Monday, September 15, 2008 4:20 PM PT
Big Government: Barack Obama and Democrats blame the historic financial turmoil on the market. But if it's dysfunctional, Democrats during the Clinton years are a prime reason for it.

SEC Chairman Had Major Role In Financial Meltdown
George Gombossy Consumer Watchdog
September 20, 2008
There are many people to blame for the world coming close to a financial meltdown, from small-time real estate speculators to greedy financiers and investment bankers. One person, who until this week had largely escaped exposure to the large part his agency had in contributing to the near collapse of the economy, here and overseas, is Christopher Cox. As chairman of the Securities and Exchange Commission, Cox eliminated a rule last year that had served to keep in check hedge funds and others from destroying companies by selling their shares short.,0,7972516.column

Did the Short Sellers Cause the Financial Crisis?
by Andrew Abraham
I have heard this question asked repeatedly... I find it an insult to ones intelligence to even state this... There has to be a scape goat... Did the short sellers make the banks give loans to speculators that were not going to live in the houses...
...Bear Sterns and Lehman died because they were undercapitalized and made terrible leverage bets. Merrill's own mismanagement was the cause of it's demise. AIG is imploding due to it's credit swaps and unregulated derivatives....

15 Things You Need to KnowAbout the Panic of 2008
A crash course in why it happened, how it's strangling the nation's finances and how it might work itself out.
By Fred W. Frailey, Editor, Kiplinger's Personal Finance
September 19, 2008
1. It all began with cheap money. To prop up ailing economies early in this decade, central banks in the U.S. and Japan kept interest rates unusually low, which encouraged speculation. In the U.S., the Federal Reserve lowered the federal funds rate -- the rate that banks charge each other for overnight loans and a barometer for the cost of borrowing money on a short-term basis -- from 6.5% in 2000 to 1% by mid 2003. Cheap money quickly ignited a sharp rise in home values in virtually every corner of the country.

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