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Showing posts from September, 2008

They "had nowhere to go but up"

Reuters this morning filed a report saying the lawmakers in Washington "were set to sign off on a deal to create a $700 billion government fund to buy bad debt from ailing banks in a bid to stem a credit crisis threatening the global economy." They had worked late into the night Saturday night to arrive at a compromise on Paulson's original package, which, the article said,
would keep credit markets from grinding to a halt under the burden of bad mortgage-backed bonds created by banks at a time when it looked like home prices had nowhere to go but up.Yes, it will look that way as long as the Fed keeps lenders awash in cheap credit.

Mises Institute's Mark Thorton explains what happened to housing in four easy steps.