The thing that REALLY bugs me about blaming the poor people is that AFAIK the failing loans weren't even the main problem per se. It was the securitization. All the loans were put in a blender and sold in pieces to everyone.
1. Let's say the "good" loans are chocolate and the "bad" loans are shit. Some people realize that their banks are no longer necessarily eating their own product, so it's OK to mix some shit in to add to the volume. And anyway, the shit is so spread out that no one will really get hurt much by it, right?
2. Only after a while of this people start noticing that the chocolate tastes like shit. And they can't "unblend" the mix to separate out the chocolate and the shit, and nobody wants to buy the mixture, so now all the chocolate is inedible too. Instead of all of it being good, all of it is bad.
3. Abandoning the metaphor, they can't even renegotiate the shit loans to get at least some of the money back, because they have to coordinate the negotiations with everyone who owns a piece, and the pieces are all over creation. No individual loan is worth the effort, so they have to stand by and watch people default which is worse than renegotiating by far.
This has less to do with the bad loans than with a sick industry that thought it could buy and sell shit and turn it into chocolate. At least, if the understanding I've gleaned from various sources is at all close to accurate. Please do speak up if it appears that I have developed a serious misunderstanding of these issues.
Tag (courtesy of fkusumot): "Please feel free -- nay, I encourage you -- to offer rebuttal."
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
My advice to fanboys: Brag about stuff that's true, not about stuff that's false. Predict stuff that's likely, not stuff that's unlikely. You will be happier, and we will be happier.
"Everyone is entitled to his own opinion, but not his own facts." - Sen. Pat Moynihan
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
The old smileys: 
; - ) : - ) : - ( : - P : - D : - # ( c ) ( k ) ( y ) If anyone knows the shortcut for 
, let me know!
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
I have the most epic death scene ever in VGChartz Mafia. Thanks WordsofWisdom!
