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Politics : THE WHITE HOUSE -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (23321)	10/6/2008 2:35:28 PM
From: DuckTapeSunroof	Read Replies (1) \| Respond to of 25737

Re: [Home ownership has LONG been encouraged by the government in America.] "And it kept becoming more and more encouraged, with the incentives tilted more and more towards home ownership." Yep! (But what would you 'prefer' to incent, if not home ownership? This has LONG been called one of the great advantages of the American economic system over, say, the European system where home ownership levels are much lower. Would you prefer to incent rapid-fire stock flipping, 'Nasdaq bubbles' and such, through artificially lowered rates for short-term cap. gains? Or would you prefer to incent long-term home ownership?) Re: "Over investment in a particular area in response to such distorted investments should hardly be a major surprise." (You mean the general asset bubble occasioned by Greenspan's pumping of liquidity ever since the recession in 2000, right?) Re: [And, anyway, as I've already pointed out: all the 'sub-prime' loans in the world wouldn't amount to 10% of the structural impairment in the world's financial systems today] "Sub-prime, and also bad real estate loans that didn't qualify as sub-prime when they where made (which makes it more than 10%), are the area where things started to fall apart...." Correct. The initial 'fuse' that lead to a really BIG 'keg of dynamite'. (But still just the fuse....) Re: "If the real estate bubble hadn't inflated in the first place...." (See: Alan Greenspan for that one.... :-) He tried to escape what otherwise would have been a more prolonged downturn in 2000 by pumping liquidity back into the system when Nasdaq tanked, and he caused the inflation of asset valuations. He also famously said that he 'saw nothing wrong' with the explosion of asset securitizations and 'financial innovations' such as reverse mortgages, sub-prime mortgages and like such --- all 'good' good, good to Alan.)