I think it's lack of real equity in the housing market. Speculators and regular people bought housing they could not afford using money with artificially low (non-market) interest rates.

Since the beginning of all of theis, too many eople refused to believe there was a bubble even though it was said on a daily basis!

Greenspan encouraged risky mortgage loans,he said this was a great financial instrument at work.The greedy wall street took his word literally not using any prudence whatsoever.I think when gas and everything else went up it was more than many consumers could handle.The housing market is the cause of all of this and Alan Greenspan should go down in history as the main cause of financial chaos.Credit will be tight for several years,they want pull this crap again.

Thing is, the same thing happened with mortgages in the late 80s and early 90s. I underwrote many of these risky loans knowing full well people would be screwed IF anything were to hapen to the market. I also blame the people who got those loans out of greed. Its a mess.

You are right. I was vacationing in Florida and met some people who were flipping houses. I bet they are in deep now.

Especially in Florida and Nevada. Many people made a lot of money doing that and good for them BUT it will bite you in the ass if you dont know when to say when.

Greed. They made loads of money and thought it would last forever. Thats crazy.

De regulation and he repeal of the Depression Era legislation designed to protect and stabilize our markets led to this massive decline.
Thank Phil Gram & the Republican Party the Regulation Terminators
To Bill for review The Repeal of Glass Steagall by the Gramm-Leach-Bliley - Financial Services Modernization Act
&
Senate Bill 3283, also named the Commodity Futures Modernization Act of 2000. This time around the sponsor was Republican Sen. Richard Lugar of Indiana, and now Phil Gramm was listed as one of the bill"s co-sponsors. Like it had in the House, this bill was destined to go nowhere until, late one night, it was attached as a rider to an 11,000-page appropriations bill
And what did we get for all this Small govt Free Market Madness
Great Depression #2 on the Horizon.
Know the facts People; make a smart decision with your vote,'
We the People do not need Phil Gramm in the next administration or anywhere near out Laws

Ill have to look some of this up because I dont really understand what you are saying. I dont want to sound dumb but I dont think Im alone. Thats what this blog was about. All of the politicians and poli sci majors and economists know what s going on because everything is in their language. What about me? Can you explan it to me in words I can understand? TY Smokey!

Its going to cost the taxpayers a lot of money and neither candidate is going to be able to cut taxes.We are in a huge deficit and the day of reckoning can't be far off.

But wait.. Washington Mutual is in trouble! WamWho...???

I had a friend take all of her $$ out of her WAMU acts after the stock dropped. She is not so worried that she wont be able to get to it but the time it will take to get it if they go under. Heres a great link...

http://bankimplode.com/

My Der, you are not alone--until all this business with Lehman Bros, etc took place, my interest was nil;however with all of the Fannie Mae, Fredie Mac, AIG, I have started listening--the only thing I can compare it too are all the stories I have heard about the Great Depression--I am thinking that this is where we are headed. Have always had a great faith in Brian Williams--tonight--for the first time--I truly since that he is as alarmed as we all are--I really thin k, we are all in the dark--jnance

Exactly. This is a situation unlike anything we have seen since the great depression. Will it be like that all over again? I dont know. I dont think anyone knows. That is the scary thing here. Who ever thought this would all happen?

Anybody who believes history doesn't repeat itself is wrong.There were a lot of regulations to make sure this never happened again but the Republican Party has weakend those regulations to the point that I'm not sure what will happen.
I think we will be hearing the word sacrifice very soon!

LMAO!
It is people blinded by the rhetoric either party spits out that are part of the problem.
Neither party cares 1 iota for your well being. It is status quo.
They are rich and powerful, why would they change the system to intentionally reduce either their wealth or power? It's like volunteering to take a pay cut at work so the homeless guy gets that $1 hour from you. Sure, a small percentage of people would agree to that, but most people would tell them to shove it.
Politicians are simply a sampling of the wealthy in this country, since they are almost all wealthy. How many wealthy people do you know that care more for people than money and power?

I can't disagree we will have to sacrifice, but am just astounded how blinded by 'faith in the Democrats' you are.

I guess we should just destroy our Democracy and put the Democrats idea of Socialist society in place now, but realize that you complain of Republicans taking away your freedoms, wait until the Democrats force you to accept things you as a voter do not like, for instance gay marriage. Each state SHOULD decide for themselves, but the Democrats see an opportunity to further squash the Constitution, and trust me, they will try it.

None!but I think warren Buffet and Bill Gates are good examples of rich people that do good with thier money and I hate the arguement that all rich don't care,the poor

are lazy,all politicians are crooks.Sorry I just can't take that kind of arguement anymore.

You would think we would learn from our mistakes. Sad sad times we are in and more to come. :(

BUMP AIG LET THEM FALL REMEMBER THE OWNERSHIP SOCIETY...
NO STIMULUS FOR GAS GOUGED TAX PAYERS BUT 85 MILLION FOR AIG A CORP GIANT
YEA THAT'S SO AMERICAN

Globalization is at the root of the economic crisis.
As long as proponents continue passing legislation that further encourages it, the US economy will only decline.
Simple logic. The US grows 1 trillion apples. The US eats 1 trillion apples. In the interst of 'world economy', instead of growing the apples in the US, we will buy them from China and send the $$ there. China benefits, the US suffers, as now we do not grow 1 trillion apples anymore.
Put this in terms of dollars, and the problem is clear. We are selling our own prosperity in the interest of people who do not care what happens to us. Practically speaking, the amount of money is finite, and globalization seeks to make third world countries into second world ones, the problem is first world ones have to be downgraded.
The downgrading has begun.