Question: I was wondering if you have any thoughts on who is to blame for the current financial crisis? I don't need a political answer. I need a business answer.
-Barbara, Phoenix
Answer: Thank you for being quite blunt with me. As an independent, the only answer you will get from me is a business answer. I believe that there is plenty of blame to go around for the current financial crisis. So, let us round up all the suspects.
• The U.S. Congress: It is not a Republican or a Democrat problem. The entire Congress is to blame. Congress enacted the Glass-Steagall Act in 1933, which prohibited banks and investment banks from combining. This combining had supposedly contributed to the crash of 1929. The Congress repealed this law in 1999, setting up the scenario for the current crisis. Apparently, after 70 years we had forgotten the lessons of 1929.
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Source:http://www.azcentral.com/arizonarepublic/business/articles/2008/10/19/20081019biz-asksteve1019.html
A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. A mortgage loan is a secured loan in which the collateral is property, such as a home.
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