Sub-Prime Aftershock
Whose fault is the 'Sub-Prime' loan disaster?
The big banks and their investor class who bought into a clever Ponzi scheme: they were told by derivative formulators that if you greedily invest into enough bundles (slices and dices) of bad mortgages...and leverage it all on borrowings...it'll turn into a good investment.
The wall street broker/trader who sliced and diced the mortgage bundle in the first place (and got great commissions/fees), graded the bundles in "A to F" packages, and promised their buyers that they were all getting the "A" slices.
The smaller banks who knew they were making/hustling bad loans in the first place, but they figured/knew they could pass them on in toto for mortgage bankers to buy.
The unqualified borrowers who thought (dreamed? schemed?) they could get something for nothing: loans on bigger/better/first homes at monthly payments they could ill afford.
The working class who built the homes in bubble tracts and wonder why they were laid off when the bubble burst.
The citizenry for electing officials who pushed since 1980 for deregulation of financial institutions.
So what's to be done?
This being a democracy, we fight over who's most responsible as a basis of who pays the most for the mistake.
Guess who will win/lose that argument? Democracy is of the people, by the people, and for the people, right?...good times and bad? The 'buck for fucking up', Mr. and Ms. Citizen, stops here. Start writing your (tax) checks.
The big banks and their investor class who bought into a clever Ponzi scheme: they were told by derivative formulators that if you greedily invest into enough bundles (slices and dices) of bad mortgages...and leverage it all on borrowings...it'll turn into a good investment.
The wall street broker/trader who sliced and diced the mortgage bundle in the first place (and got great commissions/fees), graded the bundles in "A to F" packages, and promised their buyers that they were all getting the "A" slices.
The smaller banks who knew they were making/hustling bad loans in the first place, but they figured/knew they could pass them on in toto for mortgage bankers to buy.
The unqualified borrowers who thought (dreamed? schemed?) they could get something for nothing: loans on bigger/better/first homes at monthly payments they could ill afford.
The working class who built the homes in bubble tracts and wonder why they were laid off when the bubble burst.
The citizenry for electing officials who pushed since 1980 for deregulation of financial institutions.
So what's to be done?
This being a democracy, we fight over who's most responsible as a basis of who pays the most for the mistake.
Guess who will win/lose that argument? Democracy is of the people, by the people, and for the people, right?...good times and bad? The 'buck for fucking up', Mr. and Ms. Citizen, stops here. Start writing your (tax) checks.
posted by Cliff Osmond at 3:20 PM
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