And there should be no doubt about who is really responsible for the subprime woes. The investment banks employ some of the country's "best and brightest" -- sharp guys who have studied at some of our finest colleges and universities. Does anyone really believe that a Harvard MBA -- who understands all the fine-points of high-finance -- really thought that ignoring all of the standard criteria for prudent lending, and issuing trillions of dollars in loans to applicants who had no job, no collateral, bad credit, and were unable to come up with a few thousand dollars for a down-payment -- was a great idea?" ~ Mike Whitney
Bill Gross of PIMCO, only the greatest bond manager on Planet Earth, says we're in the "first inning" when it comes to the unfolding housing crisis. Look out, world; Mr. Gross and I are on the same page.
Rest assured, when the developing assortment of real estate bombs lays waste to the finances of most of my fellow Baby Boomer brethren, Americans will be walking around bitter and depressed, wanting to know "What happened?" At this point, most are just scratching their heads, wondering why Larry Kudlow's "Goldilocks Economy" is turning out to be cold porridge and a broken chair, but my guess is folks won't be that interested in getting to the bottom of everything until they're standing in line for soup.
Heads, of course, will roll, beginning with whomever gets elected President in 2008 (too late for him or her to do anything about the problem but the sap in the Herbert Hoover role will get blamed), George W. Bush (not really his fault, but he's certainly guilty of failing to provide any leadership as the real estate/mortgage bubbles inflated/popped/began to deflate), Alan Greenspan (guilty as charged) and Ben Bernanke (current Fed Chairman and Greenspan lieutenant when the Fed played chicken with the U.S. economy). Of course, lining these "leaders" up at the guillotine won't give anyone his or her money back, so your irate neighbors and friends will still want to know what the hell happened.
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