U.S. recession in Dec 2007 and China Olympic in Aug 2008

The National Bureau of Economic Research, a non-profit panel of economists that dates American business cycles determined that U.S. entered a recession in December 2007. Lehman Brothers Holdings Inc. collapsed on Sept. 15 2008 and caused the most powerful financial tsunami that lockup the whole banking sector. What impressed me was the fact that this whole banking drama was able to delay until China performed the most glory 2008 Beijing Olympic Game in August. See the big picture?

Looking at the Fed Fund Rate chart it can be argue in theory that the American business cycle was push down by the rate tightening since 2005. Most people blamed that the recession was caused by property bubble but I think whether there was any bubble in US housing market was debatable topic with no right or wrong answer. I think most likely cause of this recession which started in December 2007 was the over tightening rate since 2005 and obviously this was a policy mistake which FED chairman will never admit. Just my view only.