"Why are the most risky loan products sold to the least sophisticated borrowers? The question answers itself - the least sophisticated borrowers are probably duped into taking these products." New York Times, Dec, 18, 2007
Why? Because that's what they do. It's their nature. The Money party just can't get enough and it will get it anywhere it can in any way it can.
So we're in a situation where a false housing boom was created by sticking the least qualified home buyers with very risky loans. The big banks and Wall Street got together and created securities and bonds based on "subprime" mortgages along with hedge funds and other schemes based on commercial real estate in order to profit from this madness.
These were highly rated and widely sold. When the housing market collapsed, the securities and bonds lost most or all of their value, and the screwing of the citizens expanded. The financial collapse is now devouring the middle class and pummeling the financial intuitions that started the scheme in the first place.
The Times of London indicated just how low The Money Party had sunk:
"The FBI is investigating every level of the conspiracy that it believes perpetuated the housing boom and ultimately resulted in millions of Americans losing their houses, investment banks losing billions of dollars and the chief executives of Citigroup, Merrill Lynch, Bear Stearns and UBS resigning." TimesOnline Jan. 31, 2007
Will anything come of this investigation? Who knows? But we're in a serious crisis that requires skill, insight and honesty to find solutions.
We should all be encouraged that the team in charge of fixing this mess is making progress. Who better to trust than Bush and Congress?
END
The Money Party (2). Lousy Leaders and How to Get Rid of Them
The Money Party (3). Big Lies that You Must Believe
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