Washington Split Over Regulating Wall Street

http://www.cnbc.com/id/23759122

"Democratic lawmakers in Congress and the Bush administration agree that the meltdown in credit markets exposed weaknesses in the nation’s tangled web of federal and state regulators, which failed to anticipate the effect of so many new players in the industry."

Back in mid-2005 just outside of Washington DC, a builders sign read $99 down for a $1.2 million home and no payments for 6 months. Troubling signs such as those never caused the federal regulators or the federal reserve to realize that there were serious problems with lending. It would be difficult for a person with the ability to afford a down payment of $99 to get into a car that would cost $30k.

Will a new regulator be able to achieve anything at this point? The crunch is not a psychological event as described by many. It's a result of having a lot of investors losing real money (to the tune of billions and no they don't have a printing press like the federal reserve) as the wall-street firms promised big returns and created bad debts instead purely to increase the commissions they could make in between.