Now that we are playing the blame game—and fingers are pointing at Wall Street—who really brought all this on? Greedy Wall Street types were just acting according to their nature when presented with the opportunity. This doesn't wholly absolve them, but their actions were predictable given the circumstances. Who gave them this opportunity? Without the 1-2% overnight rate set by the Greenspan Fed from early 2002 to late 2004, the mad scramble for credit that resulted in the mortgage bubble would unlikely have ever started. Securitized loans and structured investment vehicles (SIVs) arose en masse to take advantage of the situation, pouring in to the system ever increasing cheap credit relative to savings and GNP—and thus price disequilibrium.
Real estate and stock prices returning to their equilibrium values should be welcome. Those whose financial security depends on disequilibrium prices are the same ones demanding taxpayer bailouts.