YIKES

Fed in 2007: Everything’s Fine

Felt no need to act on foreclosure crisis.

So the Federal Reserve just thought everything was cool in early 2007 and there was no need to act, despite that people were losing their homes? That explains a lot. According to the central bank’s transcripts that were published Friday, the Fed discussed the health of financial markets in the wake of the foreclosure crisis on Aug. 7, 2007—but decided not to act, despite that the mortgage industry was already imploding. This meeting took place just three days before the Fed was forced to begin pumping money into the financial system due to irregular behavior—a first move of a new era of the Fed, one of intense involvement in keeping the financial system healthy.