aw pers 2 - Substantive Article Summary/Review Perspectives...

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Substantive Article Summary/Review Perspectives 2001 11/29/10 I. Title: Origins of the Financial Market Crisis of 2008 Author: Anna J. Schwartz Source: Cato Journal, Vol. 29, No. 1 Date of Article: Winter 2009 II. Summary Government Responsible for Crisis While consumer greed played a large role in the financial crisis of 2008, Government policies contributed greatly to the problem. The Federal Reserve lowered interest rates and kept them low for too long, making home buying seem more realistic than it really was. Government programs such as HUD further propagated the idea that every consumer ought to own a home. Fannie Mae and Freddie Mac were given governmental directives to target low income homebuyers. Problems with New Investment Instruments New financial innovations acted as catalysts for the credit crisis. Securities, derivatives, and auction-rate securities were exciting and profitable for banks in the beginning, and were substituted more and more rapidly for the traditional mortgage
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This note was uploaded on 04/04/2011 for the course PERS 2002 taught by Professor Roman during the Spring '07 term at Georgia State.

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aw pers 2 - Substantive Article Summary/Review Perspectives...

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