Seeds of the current global economic crisis were sown in the early part of this decade with a perfect storm of financial factors and federal government regulating watchdogs that lost their teeth, a region panel concluded.

The panel of financial, economic and media experts discussed the issues Thursday Purdue University Calumet when assessing the factors leading to the global recession. The panel was sponsored by the university's Center for Global Studies.

The panelists, all of whom hold doctoral degrees, included B. Lee Artz, professor in PUC's department of communication and creative arts; Kelly Blanchard, an economics teacher at Purdue University West Lafayette; Pat Obi, professor of finance at PUC; and Reza Varjavand, associate professor of economics and finance at St. Xavier University in Chicago.

Housing prices are at the epicenter of the economic crisis, several panelists said.

From 1990 to 1995, median housing prices went up 9 percent, Obi said. From 1995 to 2000, those prices rose another 17 percent, but the real problem came between 2000 and 2006 when housing costs rose 60 percent, he said.

"This is unsustainable," Obi said. "It's never happened in history."

At the same time, the financial markets began using "creative measures" to grant home mortgages to people without good credit or the ability to pay back the loans, Blanchard said. Although housing prices tend to increase over time, the financial institutions assumed that investments based on those inflated housing prices also would increase.

"They assumed that even if the income of a family declined, the house could be refinanced," she said. But housing prices started declining rapidly in late 2007.

Now homeowners find themselves unable to re-finance because their loans are for more than their homes are worth. Many also have adjustable rate mortgages they now can't afford. The result is foreclosures, she said.

But Artz said some banks don't want the houses upon which they have foreclosed, leaving families out in the cold and sometimes with tax bills for homes in which they cannot live.

Federal government deregulation or lack of regulation also fed into this financial crisis, the panelists said.

During the "boom" period in housing, the federal government began deregulating mortgage loan providers. That permitted mortgage brokers to make loans to borrowers that could not be repaid. In addition, insurance companies, such as AIG, began writing insurance policies to protect the banks if borrowers defaulted, the panelists agreed.

The problem with this, Obi said, is that the insurance companies didn't have the funds to pay off on those policies as borrowers continued to default.