Yes. I think we will discover that the Fed has lent in excess of the true market value of the underlying collateral. If the magnitude of the mispricing is to the extent that many believe, Congress will be faced with allowing an insolvent Fed to fail, or having US taxpayers once again socialize a private enterprise's losses.
So how much of the bubble is Congress' fault? How much is the Fed's?
I don't know, nor is it especially relevant. If it were so, what would be your point? That we the people have the ability to control the Fed, and the fact that we didn't means we are wholly to blame? The Fed was given a fairly narrow charter, yet it has proven to enable a body of private citizens to effectively run our economy.
Perhaps if our representatives were more versed in economics it wouldn't be so, but unfortunately, we are at the mercy of their understanding (or honesty). The Fed & their allies take full advantage of this IQ arbitrage to their own benefit.
How would the Fed fail?
or having US taxpayers once again socialize a private enterprise's losses.
What private enterprise?
I don't know, nor is it especially relevant. If it were so, what would be your point?
You can't blame the Fed for CRA. Or for Fannie and Freddie repackaging crappy mortgages to give them a AAA rating.