john maddente | midwestern clarity

C redit-related causes of the  Great Recession  included: lax underwriting standards (abetted by government programs and the GSEs), overuse of ARMs (because the borrower couldn't qualify for a fixed rate note), too much cash-out financing and artificially low interest rates.  Yet, the Wall Street factor (i.e. securitization of those obligations and excessive risk-taking) always seems to take center stage in the debate.  I disagree with that emphasis because: 1) the Street factor already gets most of the attention in the press, 2) regulatory reform for banks is a foregone conclusion, 3) Wall Street's culpability came during and after credit issuance to subpar borrowers, not beforehand .  It's the third point that is lost on some who look only at the Wall Street role in this disaster.  It could only have been possible with easy credit extended to in-over-their-heads borro...