In General Sense

My opinion about the credit crunch in America, should differ from quite some number of widestream analysts. I believe that Mr Bernanke, Fed Chairman, has gave in to pressure from Wall Street. In fact, why should anyone be taking the blame when it is actually greedy Wall Street bankers and their risk undervaluing who are to blame? It has been proven in the past in Wall Street that moving with the herd is always a good thing to do.

Anyway, there's another point. What or who initiated the housing bubble instead? No other than.. Mr Bernanke's predecessor, Alan Greenspan. His policies during the 90s, created the dotcom boom and later in the post-911 era, the housing bubble. By adjusting the federal funds rate to historic lows of 1.0% (which by common sense, encourages house owners down to the lower proportion of society - in the income hierarchy - to take up mortgages.), he has pretty much lit a match and threw it into a pool of gasoline.

Mr Greenspan also publicly acknowledged the virtues of subprime loans, as quoted.

With these advances in technology, lenders have taken advantage of credit-scoring models and other techniques for efficiently extending credit to a broader spectrum of consumers. The widespread adoption of these models has reduced the costs of evaluating the creditworthiness of borrowers, and in competitive markets cost reductions tend to be passed through to borrowers. Where once more-marginal applicants would simply have been denied credit, lenders are now able to quite efficiently judge the risk posed by individual applicants and to price that risk appropriately. These improvements have led to rapid growth in subprime mortgage lending; indeed, today subprime mortgages account for roughly 10 percent of the number of all mortgages outstanding, up from just 1 or 2 percent in the early 1990s.

Remarks by Alan Greenspan on Consumer Finance at the Federal Reserve System's Fourth Annual Community Affairs Research Conference.

So, if you ask me who caused it, I would say.. the above.

If this bores you, I know it does, go here for a lighter side, or just continue doing your own stuff.. whatever you were planning to do before you looked here aight?