With all the recent talk about the sub prime mortgage crisis, and The Fed’s response, it provides the presidential candidates an interesting situation, in which to highlight their economic policy and try to downplay their opponents’. This can be very helpful for investors, as a prediction of how the market will do in general.

At the Democratic debate on Sunday, the candidates where asked questions relating to mortgage, lending, and banking. One of the questions was, “Should they (the Fed) lower rates for everyone else, yes or no?” Every candidate expect Mike Gravel and Dennis Kucinich answered yes. Gravel said there was no answer and took a shot at the other candidates, and Kucinich said “no” because, “What we’re looking at is a continuation of the problem and a postponement of the day of reckoning.”

Kucinich seemed to have his stuff down the best so take a look at his answer:

The answer is no. The Fed is actually looking at bailing out the creditors. And what we’re looking at is a continuation of the problem and a postponement of the day of reckoning.

We need to have a government take strong action where we’ll loan money to those who are in trouble. But we need to do that in exchange for having the power, the money-lending power that the banks have right now, come back to the government; government spends money into circulation; and then government can maintain control over the economy.

Unless we take this action, we’re looking at a situation of the collapse of our economy, and we’re looking at a situation where these hedge funds will try to get a bail-out while millions of Americans lose their homes. Save the American homeowners.

The entire transricpt is here (the Fed questions are on the fourth page).

Other than that, the answers where predictable; Obama tied everything back to lobbyists, Clinton weaseled her way out of a solid answer, and everyone else said in so many words that we need more liquidity and transparency.

-Invest this!