Maybe I'm just a dumb ol' abstractor, but if you cut through the alphabet soup of acronyms and "banker babble" it sure seems pretty simple to me.
A bunch of greedy lenders gets together and decides they can make a killing by offering to loan wheelbarrows full of money to people who probably won't (or can't) pay it back, and then selling the loans to greedy investors. Meanwhile, overzealous borrowers see this as an opportunity to "cash in" and go a-hole over appetite into debt, buy more house than they could afford, or take out second mortgages to pay for things like SUVs, big-screen TVs, etc.
Now that the whole scheme has blown up in everyone's faces, the lenders, the investors and the borrowers are looking to the government to bail them out of the mess they've created for themselves.
The Federal Reserve (which is no more "federal" than Federal Express, btw) keeping interest rates artificially low is partly to blame for creating this situation in the first place. How will doing more of what caused the problem help to solve it?
Regards,
Scott Perry
to post a reply:
login - or -
register