I have to write more about this

I had to bring this up because the press is really pushing disinformation on what really is going on and why. This whole Subprime thing started on Bill Clinton's watch and was directly caused by Congress. Congress letting themselves be directed by those of socialist bent and the race baiters. The be all and end all of this market collapse is that it is directly due to congress forcing unsound policy and regulation, in their effort to gain votes with blocks of voters. They went out and messed with the market that they apparently know nothing about. What I want to say to Congress is "listen you jerks, until you manage to balance your own budget and live within your means, stay the hell away from the economy."

Stan Leibowitz does a good job:

How did America wind up in its worst financial crisis in decades? Sen. Barack Obama explained it this way last week: “When sub-prime-mortgage lending took a reckless and unsustainable turn, a patchwork of regulators systematically and deliberately eliminated the regulations protecting the American people.”

That’s exactly backward. Mortgage lending took that “reckless and unsustainable turn” because of regulation - regulation driven by liberals and progressives, not free-market “deregulators.”

…The mortgage market was humming along just fine when, in the late 1980s, progressives decided that it needed to be “fixed.” Their complaint: Some ethnic groups got approved for mortgages at lower rates than others.

In reality, mortgage lenders were simply being prudent - taking care to provide mortgages to those who could best afford to make the payments.

The shift began in 1989, when Congress amended the Home Mortgage Disclosure Act to force banks to collect racial data on mortgage applicants. By 1991, critics were using that data to paint lenders as racist by showing that minority applicants were approved at far lower rates. Banks were “Shamed By Publicity,” as one 1993 New York Times headline put it.

…[In 1993] the Boston Fed announced new requirements for banks - rules that have now turned out to be monumentally catastrophic: Adopt “relaxed lending standards” or risk being labeled as racists, and face serious penalties under the federal Community Reinvestment Act.

Gone (as “arbitrary” and “outdated”) were traditional lending requirements such as requiring a down payment or limiting mortgage payments to 28 percent of income. (Of course, the loosened lending standards weren’t limited to poor and minority applicants - that would be discriminatory.)

…Time after time, Fannie and Freddie trumped criticism by pointing to how they were helping broaden homeownership. Because of the subject’s racial overtones, they beat back calls for reform even after financial irregularities were found.

The Whole article can be found here