No it didn't. It just said that you can't discriminate against people on the basis of where they want to buy. It did not force banks to offer ninja loans and it certainly didn't force banks in other countries to invest in things they didn't understand.
Are you saying the US government (and subsequently other goverments around the world) didn't dramatically limit the available information on securities through the creation of a federally approved credit ogliopoly?
It was this tightly regulated ogliopoly (of 3 companies up until very recently) that graded securities. Because companies can only use rating from the ogliopoly, the onus on the credit agencies to get things right or suffer business detriment was rapidly reduced.
Are you saying that banks should have, somehow, been able to differentiate between different AAA securities and their risk factor? Isn't that what credit rating agencies are supposed to do?
Market failure in this case wasn't caused by the market.
Scorza answered this one.
Fannie and Freddy were not the first financial institution to go belly up. As I said previously, the financial institutions convinced the politicians that they had all but eliminated risk. This is what was behind GB's statement of having eliminated 'boom and bust'. All politicians around the world were conned apart from the Spanish.
Fannie and Freddy wouldn't exist in a free market, they are, and always have been, government interference.
Likewise, the government regulation of the credit rating agencies is government interference.
The market is not free, so to blame the free market or lack of regulation when governments have heavily injected themselves into the proceedings is simply wrong.
I notice neither you nor scorza have addressed the criticism of Brown running a deficit budget the entire time. Is he not to blame for that either?
