> Billy wrote: > fund managers continued pushing sub-prime mortgage funds even after they > knew that those funds were going to tank. >
Zackly, but why are there even mortgage funds? The answer to that question is the nexus between Dana's old blind lady and the melt-down. By separating the lender from the borrower via credit derivitives, we've misaligned profit incentive with a consumer's best interest. This is a great example of what happens when you remove regulation from a "well regulated" market. Bottom line is that consumers can't always look after their best interests (because they can't know everything or even what they don't know) so there's 2 concepts on how to protect them: (1.) Have government run everything and hope "government" doesn't act like people, or (2.) Let the market do it by allowing to freely operate within bounds. E.g., if a lender doesn't bear the risk of a risky loan, but does get the benefit, then there's not a lot of incentive to ensure the loan is not risky to the borrower - Dana's little old lady. Result: someone profits, lady is screwed. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Adobe® ColdFusion® 8 software 8 is the most important and dramatic release to date Get the Free Trial http://ad.doubleclick.net/clk;203748912;27390454;j Archive: http://www.houseoffusion.com/groups/CF-Community/message.cfm/messageid:262893 Subscription: http://www.houseoffusion.com/groups/CF-Community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=89.70.5
