from
http://seekingalpha.com/article/5381...-subprime-risk
"If you know anything about the subprime mortgage crisis, know this: the hundreds of billions of dollars in losses incurred by banks, investors, home owners and others largely are due to government intervention in the private market for home loans going back decades. You can blame the mortgage bankers or ratings analysts or Sell Side traders for the subprime mess, but deregulation, active encouragement by regulators of bank dealing in derivatives, and policy efforts like the push for "affordable housing," are the root causes of the crisis.
An unholy alliance between the real estate, mortgage lending and securities industries, the "men" in Orwell's wonderful quotation, and the Washington political and regulatory elite, obviously the "pigs," has brought the US economy, the dollar and millions of Americans to the verge of a serious financial calamity. The mounting financial crisis emanating from the collapse of the market for complex structured assets also illustrates the huge damage done to the US economy by a financial culture which lacks accountability. The banksters and their political patrons on Capitol Hill profit enormously during boom times, but when the wheels fall off the wagon, the Masters of the Universe scurry back to Washington looking for a public bailout.
..................................
Today bankers privatize the profits and socialize the losses, to paraphrase Jim Grant. Imagine how different the behavior of the largest, universal banks would be today were the officers, directors and senior managers required to keep most of their net worth invested in their employers equity
.....................