Here's an interesting graph covering US housing prices since 1975. For those too young to remember, that gray vertical bar around 1990 is what we called the Savings and Loan Crisis. This was the little brother of our more recent sub-prime fiasco and the 2008 crash.
Well, in the late 1980s the US Congress had the bright idea of arbitrarily increasing the deposit guarantees. If my memory serves (without Googling it) the amount went from $30,000 per account to $100,000 for no particular reason other than an influential congressman's pressure.
Once that happened, money flooded into the Savings and Loans around the country as what we call the risk-free money pool increased dramatically. This created a housing bubble which burst in the late 1980s-to-early 1990s and took down a good number of Savings and Loan banks with it.
The government saved the day (after creating the mess) by creating an agency that bought bad loans from the S&Ls and then sold them into the mortgage market as a discount. The price for this was the shutter the S&Ls involved and allow them to re-open as traditional banks, if they could qualify.
Thus ended the S&L version of a bank.
Honestly, I thought when our current problem started in 2006-2007, that the government would do something similar because it actually worked very well. In fact, the original TARP program was just that but it morphed very quickly into the bank bailouts which are now all so familiar.
So, whither Fannie and Freddie which played a similar role as the deposit guarantee did in the S&L fiasco? Why do they still exist?
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