> ... I don't think it's fair to blame private financial institutions >for the ill-effects of an ill-advised government plan to subsidize >housing ownership by individuals. Without Frannie, CRA, or anything >of the sort I don't think we'd have seen the degree of >financialization of housing that we saw, meaning that we wouldn't >have seen the home mortgage credit growth that drove the housing >bubble, thus neither the bubble nor the crash.
Sigh. This is both unrelated to crypto, and just plain factually wrong (although it is considered gospel in some political circles.) Until very late in the bubble, Fanny and Freddy bought only conventional prime fixed rate loans, so it was roaring along without their help, and the CRA has been around since 1977, so if it had caused a bubble, it would have been during the Reagan administration. The housing bubble was due to the complete abdication of responsibility by the bank regulators and the rating agencies, allowing amoral banks to make mortgages with no realistic chance of repayment, and then to repackage that garbage into allegedly AAA derivatives, and to issue ever more highly leveraged Nth degree derivatives of derivatives. See, for example, Brad Delong in 2008: http://delong.typepad.com/sdj/2008/09/the-cra-and-the.html I suppose the lesson here for cybercurrencies is a reminder that the track record of unregulated financial markets is consistently terrible. Look at the economic history of the pre-federal reserve US if you don't believe me. Perhaps this would be a good time to bring this thread to an end, so we can talk about something cryptographic for a change. Regards, John Levine, [email protected], Primary Perpetrator of "The Internet for Dummies", Please consider the environment before reading this e-mail. http://jl.ly _______________________________________________ cryptography mailing list [email protected] http://lists.randombit.net/mailman/listinfo/cryptography
