JP Morgan Revisited – When Is Fraud Really Fraud?

Last Week’s Market Action Summarized Into A-Two Minute Read – Asian, European, and US Markets. USD Rally A Leading Indicator Of FOMC Surprise.The following is a partial summary of the conclusions from the fxempire.com weekly analysts’ meeting in which we share thoughts and conclusions about the weekly outlook for the major currency pairs.

Did Securitization Lead to Riskier Corporate Lending?

by Joao Santos, Federal Reserve Bank of New York There’s ample evidence that securitization led mortgage lenders to take more risk, thereby contributing to a large increase in mortgage delinquencies during the financial crisis. In this post, I discuss evidence from a recent research study I undertook with Vitaly Bord suggesting that securitization also led …

Bloomberg: Misleading on Banks Buying Treasuries

by Lee Adler, The Wall Street Examiner Bloomberg had this headline yesterday: Banks Use $1.77 Trillion To Double Treasury Purchases They led with this: The gap between U.S. bank deposits and loans is growing at the fastest pace in two years, providing lenders with more funds to buy bonds and temper the biggest sell-off in …

Six Rebuttals to the Argument that Congress or Fannie and Freddie Caused the Crisis

by Guest Author Mike Konczal

Sigh. Mayor Bloomberg:

“It was not the banks that created the mortgage crisis. It was, plain and simple, Congress, who forced everybody to go and give mortgages to people who were on the cusp… But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody.”

It seems there are people who can’t accept that some markets, particularly financial ones, are disastrous when completely unregulated — and thus find any far-fetched excuse to blame the government instead. Since this line of argument continues to pop up, how should one respond to the idea that Congress and Fannie Mae/Freddie Mac caused the housing crisis? Here are six facts to back you up: