HEARD ON THE STREET: Bank Suits Pinch Investors - WSJ.com
Who to blame? Bankers?
Sorry, but everyone was buying houses with the same beliefs.
It's fun and easy to blame people for following along with the general belief systems, but the real problem was that no one was doing any serious thinking about the relationship of housing, incomes and limitations on supply.
The same is going on now with the free lunch of low interest rates supporting unaffordable government spending while pursuing and supporting policies that discourage risk taking and economic growth (both in the US and Europe).
Whatever is out there can't be good!
The blame has to start with the politicians; but, at the same time, they reflect popular will - as well expressed in today's LA Times, which reports partisans of both parties wanting to fight it out.
But, there are three basic viewpoints on the economy - Keynesians, monetarists and Lafferities.
I'm a Lafferite in that I see anti-business polices overwhelming monetary stimulus. This affects both Europe and the US.
I don't know if you caught the comments from one of the finance ministers today - I think it was on Bloomberg, about how austerity policies raising taxes do nothing to encourage risk taking and growth.
It's like the 2nd century AD with plague decimating the population and the barbarian hordes active on the periphery of the empire.
The plague of socialist entitlements is decimating everything. So, beware and do your best to find a refuge.
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