THE FINANCIAL CRISIS: As the US lawmakers and the FED are busy in making strategy for the bail out from the severe financial mess and the worst crisis since the great depression of 1930’s, let us try to diagnose the genesis of the crisis that has triggered worldwide financial instability: There may be many economic and fundamental reasons behind the current crisis. But the seeds of the problem were sown in the aftermath of 9/11 attacks, when Greenspan lowered the interest rates in order to fight the slowing growth. But, low interest rates coupled with government populist policies that generated demand for housing and other consumer loans. When demand rose, the housing prices soared to a record high and at a speed that was totally absurd. At the same time, default spreads in the bond market also diminished to the historical lows. In the second stage, these housing mortgages, were bundled into mortgage backed securities and were traded thereby shifting more and more risk on the last hold