Mortgage Mess.... Its a Wonderful Life!!

We will leave the in depth analysis of the recent mortgage debacle to the experts. The simplified "Join The List Analysis" is as follows...

Big, fat corporations doing whatever they can to spur "growth".

Broker to fat, rich customer: "Hey Nigel, the market is slowing and we are not sure where to put your money to get the returns you want without too much risk. How about this mortgage backed security portfolio? Higher returns and no risk! Whaddya say?"

Too good to be true? It sure was.

Again.... we are not against Capitalism. We ARE against how capitalism creates this exponential need for unachievable growth.

In this case, huge mortgage companies started bundling every mortgage they could get their hands on and issuing underlying securities. When they ran out of mortgages to buy and bundle they created new mortgages as if out of thin air. Offering loans with teaser rates and no money down. They even doubled down on the mortgages that were already bundled. Then they still labled these newest issuances as low risk despite the fact that they were backed by cr*p.

Anybody surprised the house of cards fell down?

Hate to keep referencing movies, but good old George Bailey warned against this way back in 1946. I wish that we could do a better job of warding off the mean, old Mr. Potter in the real world.