The End Of Wall Street. Whether you believe the sentiment behind the name of the Wall Street Journal's new web series, they make a compelling case. (By the way, check out Michael Lewis' seminal piece in Portfolio of the same name). Focusing on the period of "easy money," roughly between the 2002 and 2006, where the Fed kept interest rates at historic lows, part one of the WSJ's series examines what caused the housing crisis and resultant recession in the United States. The series features interviews with several of the journal's top reporters.
Of course, Fannie and Freddie are featured prominently in part one. Interestingly, the WSJ staff points to some key aspects of the American dream - namely, the belief that home ownership is central to economic prosperity -- and how they became distorted by an unchecked market and escalating greed on Wall Street.
With Fannie and Freddie making so much government-sponsored money during the housing boom, the piece points out, Wall Street was forced to follow suit. The WSJ's Dennis Berman put it this way:
"Banks were trying to chase the profitability or chase on price what Fannie and Freddie were doing as market leaders, and they had to find other ways to make money. And subprime mortgages, for the time being, were the way to do that."
(The WSJ's original video has been posted below. Apologies for the mix-up.)
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