I can also tell you that the problems we’re facing now will be resolved. We may get a stronger SEC, or more laws to protect investors. But we won’t learn our lesson. We’re dealing with the human element here. We’re only 10 years removed from the Internet bubble and Henry Blodgett’s $400 Amazon target…

Fannie Mae and Freddie Mac were known for having tight underwriting standards. Mortgages that conformed to their requirements were made to borrowers with good credit who could put down large down payments. (This didn’t mean that they would never default.) These mortgage-backed securities were popular with investors because they offered higher potential returns than Treasury securities, but they had the implied backing of the Federal government.

On Monday, in a CNBC Europe interview, Jim Rogers wondered if the US was "...more communist than China." He was referring to the Fed’s bailout of Freddie Mac and Fannie Mae, and to a lesser extent, the bailout of Bear Stearns back in March. "Socialism for the rich" he called it.