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Abstract:
This is the formula. Mix bad mortgages with good mortgages. Rate the bonds that finance most mortgages as prime investments by ignoring the poor quality of some of the collateral. Sell guarantees on the full payment of the mortgage bonds without the reserves to meet the guarantee. When the guarantees are called, contract all other lending – setting off a panic sale of financial assets worldwide - in a vain attempt to meet the guarantees.
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Comments
10/09/2009 - posted by imani e
The Obama Administration has decided to get even further involved in the home mortgages business; in fact, they launched a new program called the Consumer Financial Protection Agency, which will aid homeowners in securing a modification mortgage for lower interest and payments. Since the banking crash, a large amount of criticism has been leveled at the financial industry, some of it fair, but a lot of it is after the symptom instead of the disease. (Fiat currency systems like ours, meaning not backed by a commodity, are more susceptible to dramatic bubble and bust cycles.) The Obama administration being concerned with debt relief is good, but home mortgages are ultimately a symptom, not the disease.
