The Debts of the Spenders: Fed Had Notice of Sub-Prime as Early as 2005

It's amazing that the Fed acknowledged the risk of highly leveraged speculation Iin the derivatives and credit markets as early as 3 years ago. However, they did NOTHING to stop the mortgage mess. Maybe if they had cut interest rates back then, the problem would've stopped.

http://www.frbsf.org/publications/economics/letter/2005/el2005-34.html