Forum Post: The Free Market Caused the Global Meltdown!
Posted 12 years ago on Nov. 11, 2011, 11:52 a.m. EST by HitGirl
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The more I looked into the subprime lending crises, the more I could see that market forces (which includes greed) caused the entire crises which could have only been avoided by government intervention or regulation.
Excess capital - on a global scale - looking for a sound investment combined with a heavy demand for mortgaged backed securities caused lenders to make more and more loans and to continue to lower lending standards so as to feed the investment frenzy. Investment bankers, who knew better, packaged these toxic loans into exotic vehicles that were rated AAA by the ratings agencies then sold to unsuspecting investors (their victims).
The Heavy Demand for More Mortgage Backed Securities
The demand for those great, safe mortgage backed securities was really high. In fact, so high, that there was a point somewhere in 2003 when everyone who qualified for a mortgage got one, and still the global pool of money wanted more...
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The paid posters won't bump this. Too much truth.