Quote:
Originally Posted by Shotsie
The fact is that these banks created mortgage-backed securities filled with loans they knew were goign to fail so they could sell them to clients completely unaware that they had sabotaged them by intentionally picking the misleadingly rated loans most likely to be defaulted on. That's why credit default swaps were created. Yeah, the banks didn't have any idea what was going to happen.
|
What you refuse to accept is that the bulk of investors who invest in these types of securities also understood they were shit. It was one huge game of musical chairs where investors were trying to get in and get out before the music stopped. The entire securities market has been spiraling out of control for a long time now where ancient, outdated ideas like value, earnings and long term business strategy have been replaced by short term share/investment flipping.
Like Bernie Madoff... or Enron. I think Enron never once provided investors with basic income statements that explained where and how they were making money. When a guy asked for one in a shareholders phone call, the CEO called him an asshole and that was basically the end of it. They did however provide constant materials on all the great things to come and all the great projects and all the expected future earnings. Investors don't care how they make money or how its made, they just want to make money. Same with mortgage backed securities.
EVERYONE who is a part of that system is to blame... from the 20 year old stripper who was buying a 500K house based on stated income, to the institutional investors worldwide who were investing in shit securities based on ROI, not value. It's not just some banks that cause the worlds financial system to go sideways.
You are blaming "banks". This was a cultural failure as much as anything else.
It wasn't "Banks greed". It was "everyone's" greed for more, from top to bottom.
That is what is somewhat comical about the article. People who can't qualify for a credit card and who can't open a bank account, should be focused on getting their shit together as these things should be earned by a track record of proven responsibility. Instead, they need a whole new set of products to cater to them, to make it easier to spend money they don't have and can't afford to spend... hence, that same cycle is now repeating itself.