Posted On: December 1, 2008, 10:47 am CST

Posted By: underwriter

This is obviously a very charged subject based on the amount of comments on this page.

Your argument is valid, but the situation is very much a Chicken and the Egg scenario. If the Feds had not driven home ownership to the extend that they did then the feeding frenzy environment would likely have never occurred. (And there was more than one administration that can take credit for this policy.) Conversely, if the mortgage brokerage markets had not collateralized and parcelled out derivatives securities with the assumption that our economy was recession proof, then we would not have the credit market collapse. Assuming that an 80% foreclosure rate was the worst case scenario was the fatal flaw. Compound that with a lack of transparency and the mark to market accounting principles, which is ridiculous and waaay outdated, then we got exactly what we deserved - a huge mess.

Some day we need to recognize that there IS a perfect balance between government regulation and the free market. Somebody needs to be present at the emergency brake with the willpower to pull the lever. Otherwise, that loose rail on the track will just guarantee another train wreck in the future. I can also guarantee that the young gun pulling down 6 figures plus a year won't be the one who stops the train.