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Paul Kiesel
Paul Kiesel
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Washington Post: The Bubble – An Excellent Survey of the Subprime Lending Debacle

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This past weekend, The Washington Post began a three-part series that examines all of the avarice, pride, and myopic lending during the subprime boom.

Overall, the series, written by Alec Klein and Zachary A. Goldfarb, is an indictment on the lack of government oversight and regulation within the lending industry, which led to irresponsible lending (teaser rate loans; subsequently being packaged as mortgaged-back securities or collateralized mortgage obligations) and opaque accounting, thus, paving way to the economic contraction the country has faced over the last 16 months.

Here are links to the articles: (Article 1); (Article 2)

As noted in the article, with the help of two big tax cuts pushed by the Bush Administration in 2002 and 2003, and interest rates having been slashed by the Fed, lending and spending became two words analogous with this administration. However, as far as fixing the housing mess or dealing with its ramifications, the current administration, in its last six months, has done little to help relieve homeowner distress, even though it help prompt the crippling consequences this country is now seeing. We’ll have to wait and see what type of impact the Bush Administration will have on the mortgage crisis and Wall Street, as it vacates the White House.