Monday, September 15, 2008

How Did it Get This Bad?

A few years ago, everyone with any economic sense knew that there was a "housing bubble." That same group also knew that eventually bubbles always burst.

That being the case, how has it turned out that when the bubble burst in an otherwise basically stable economy that the financial services industry appears to be at the brink of total collapse? I understand some individual businesses falling due to bad decision making, poor leadership, inefficiency, and so forth. But the entire industry?

What were the industry missteps? In what ways did the regulatory environment create the problem?

I am not sure that the general public -- including myself -- understands the reasons for the enormity of this collapse. That being the case, one wonders if any new regulatory schemes created by Congress as a result of this will make things worse, not better.

But, at this point, I'm only asking questions.

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