When did insurance companies, banks and investment firms become the enemy?
The burst mortgage loan bubble was the creation of the federal government. It is the perfect storm. It was, however, the economy that took the first body blow with the sudden, though predicable, bursting of the mortgage loan “bubble.” There had been earlier warnings but as in any perfect storm, they were ignored. It goes back to the days of the Carter administration when legislation was passed to give everyone the “right” to own a home. Banks and mortgage firms were literally required by law to ignore normal lending caution. When there were more bad loans than good, Fannie Mae and Freddie Mac, government “entities”, owned more than half of all the mortgage loans in the nation. At that point, in what can only charitably be called total panic, Congress authorized the U.S. Treasury to spend $700 billion in TARP funds to “bail out” troubled financial institutions instead of letting them fail. The word was that they were “too large to fail” and had to be rescued and there may be some truth
