> Jake wrote: > How about the mortgage brokers that were involved in rampant fraud back in > 2002 to 2005? >
And this the problem and the so-called "lemon socialism" - government socializes the lemons and privatizes the profits. Borrowers are easy to point to the finger at, but lenders and the whole shadow system is really complicated. For example, let's say Lender A lends $1M to Loser A. Loser A defaults. The standard view is that it's Lender A's fault for poorly managing his risk. A fool and his money are soon parted type o thing. Sure Loser A is at fault, but he pays with a poor credit rating. Now let's upgrade that to today's method. Lender A sold the loan to Investment bank B (IBB) sight unseen. Ok Investment bank B's fault, they should lose. But wait - IBB took the loan and packaged it up into a security and sold that to IBC. Ok IBB AND IBC should lose. But wait. IBC took that security and packed it up into it's own security and sold that to IBD. Who then packaged it and sold it to IBE. Ok, so all IB* should lose. But wait. IBC in good faith covered their risk with Swaps Company A (SCA). So even though they lose, they should fairly have their risk insured. But wait. SCA went out of business because it also covered it's exposure with SCB and SCB oversold insurance on IBBs mortgage backed security to all kinds of investors, none of whom actually owned the security. But isn't insurance and banking regulated to prevent that kind of implosion? It was until 2001 and Phil Gramm. And ever since then people have been warning the Bush administration to re-regulate before the thing blows up. Warren Buffet called the practice "weapons of mass financial destruction". But Bush ignored them. So who should lose now? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Adobe® ColdFusion® 8 software 8 is the most important and dramatic release to date Get the Free Trial http://ad.doubleclick.net/clk;207172674;29440083;f Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:289335 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=89.70.5
