Subprime Fallout: Who is to blame?

Unless you have been tuning out all media, by now you know that the fallout from the housing bubble is massive.  Dot.bomb massive.  As world markets crashed Monday, the US had a holiday, MLK Day, so the markets were not open.

Look for a big decline today in the US indices; 5-7% is my guess based on the futures.  

What caused this problem?  As with any massive fallout there are several groups that can be blamed.  

1. Many people simply bought more house than they could afford.  Instead of buying a house with a traditional 15 or 30 year fixed interest rate, they opted to obtain a low rate that would reset to the market rate in 3 or 5 years.  Some people were dumb enough to take out a loan in which they would only have to pay interest for the first 3 years and then start paying big; this is similar to, but worse than paying only the minimum balance on a credit card.  It does not take a genius, or even a high school diploma to understand these concepts.  Once the rates reset, people found out that they could no longer pay their mortgage.
2. Several of the less reputable mortgage companies may have misled the buyers into getting one of the loans referred to above.
3. Alan Greenspan and the Federal Reserve.  A supposed "free market" central banker (an oxymoron) decided that to combat the internet bubble bursting he would lower interest rates to artificially low rates and leave them there for a long time.  These low rates are what led to the attractive interest-only loans.  These low rates are also what led to the dollar sinking to record lows against the Euro and Canadian dollar, as people were reluctant to convert their money into a currency in which they could not obtain a good interest rate.