Has Al Qaeda inadvertently caused this Credit Crisis?

[Pager]

After the 9/11 attacks in the USA the feds monetary policy was loosened in the aftermath of the attacks and interest rates fell from 6% to only 1% by late 2003, this set in motion the massive housing bubble?

In 2004 up until 2007 the Fed reversed its policy and rates were lifted from 1% to 5.25%, did this cause the bursting of the housing bubble?

Osama and his nutty crew may have accidentally got there goal of causing a huge disaster not once but twice?

 

[Spanning Tree]

Just because X happened right after Y, doesn't mean Y caused X. I hear that the housing boom occurred after investors pulled money out of poor performing tech stocks after the dot-com crash. Many investors thought that property was safe ("safe as houses") and always went up. Then the property bubble burst.

 

[doogie_goes_off]

That's the last of the great circular conspiracy theories, I don't think a terrorist attack can be a macro-economic tool but it is remotely possible, just hard to prove cause and effect.

 

[prawn_86]

That's the last of the great circular conspiracy theories, I don't think a terrorist attack can be a macro-economic tool but it is remotely possible, just hard to prove cause and effect.

Exactly. It is possible, but determining causation would be impossible. Macro has so many different factors anyway, not one can be singled out.

 

[Glen48]

Following the Black Swan theory Bin Liner and his cronies got just as big a surprise as we did when the towers imploded. Things that you never dreamed could happen, do, now what happens if China goes into a Depression , 6 weeks ago we had China to save us now China needs saving, and our share market slowly vanishing, say BHP to day $30 next month $20 3 weeks later $10 do you buy thinking this has to be the bottom or panic because it should never be this low and some thing strange is going on? Whats to stop BHP etc shares going down to 50C the company is still there digging with all their equipment?.
If an Alien arrived in a Bank and saw all this coloured paper with funny drawings they would not know a $50 note is 1/2 of a $100 and to then its just a piece of plastic to us it represents Money, yet we can still live and survive with out it what if the World ended up in such a severe depression 9/11 type never seen before and money got to the stage were you had $500 in gold /cash to your name and a House was now 10K would you buy the house of keep your money to survive?

 

[michael_selway]

After the 9/11 attacks in the USA the feds monetary policy was loosened in the aftermath of the attacks and interest rates fell from 6% to only 1% by late 2003, this set in motion the massive housing bubble?

In 2004 up until 2007 the Fed reversed its policy and rates were lifted from 1% to 5.25%, did this cause the bursting of the housing bubble?

Osama and his nutty crew may have accidentally got there goal of causing a huge disaster not once but twice?

Do you think an attack by Al Qaeda now will be opportunistic?

thx

MS

 

[Mofra]

No - if you're looking for a direct clause, perhaps you'd be better of blaming the decision to repeal the Glass-Steagall Act in 99, which led to an explosion in speculation by the financial markets including the creation of a whole array of structured financial products based on debt.
This of course led to a credit explosion which was followed by an extreme fall in credit standards owing to the lack of regulation in the US lending market.

Three cheers for free-market economics, hip-pip....