But, in my experience, when you say that 'there is enough blame to go around', it usually means that there is such a huge steaming pile of blame on the republican side that even you can't spin it off. (Imagine a Record, piled high.... )

Fannie Mae was part of the problem, but the securities game was played aggressively by unregulated private banks, by institutions which were allowed to grow 'too big to fail' due to de regulation. The CDS market should have had firm regulation from the beginning, but now it has a paper value larger than the US GDP, and because there was no regulation nobody is sure how much of that paper is pixiedust, and how much has real value and thats the real fear looming behind the one everyone is talking about.

Lets also note that lack of regulation in the 'subprime' loan industry allowed much of this abuse to happen.

Market fundamentalism is the idea that markets always work, and always fail in the presence of regulation. CDS markets? Completely unregulated. Derivative market? Same. Securitization? Ditto. Have these markets failed? Yes. Why did they fail? Lack of regulation.

Regulation doesn't stop people being suckers, it just makes sure that the suckers are actually suckers. In otherwords, it makes sure that rational agency, on which market theory is founded, can make decisions about issues of fact, and not issues of fraud.

Yeti