Who or what is responsible for the current mess in the housing and financial markets? Until recently, I figured there were three culprits.

First, I think Alan Greenspan and the Federal Reserve kept interest rates too low for too long, encouraging people to take on greater debt than they should have. The low interest rates also contributed to the decline of the dollar and the rise of oil prices.

Second, many individuals got caught up in the fervor over seemingly ever-increasing housing values and tried to get in on the game without knowing what they were doing or properly assessing the financial risks they were taking. Real estate investing takes careful planning since it is illiquid, as overextended investors eventually and sadly realized.

Third, many banks, although not all, joined the game (kudos to my favorite bank, Northern Trust, for staying out of it) and made many loans that were not properly scrutinized. They weren't conservative enough.

However, as I learn more about the mismanagement of Fannie Mae and Freddie Mac and their emphasis on buying risky loans from banks, I am convinced that they played perhaps the most important role in the whole affair. They were the principle enablers, so to speak. Ironically, Alan Greenspan and some Republicans in Congress recognized the danger back in 2005 after Frankllin Raines, President Clinton's former budget director was fired as head of Fannie Mae due to shoddy accounting practices. Republicans proposed legislation that would have reigned in Fannie and Freddie. The Democrats voted it down, and the rest is history.

This Fox News clip clearly explains it all: