The people who did the collateralized mortgage obligations, sold them to pension funds, then sold them short, then bought credit default swap insurance on them, are just amazing. They are a law unto themselves.
Sentiment: POSITIVE
The mortgage crisis is a clear instance of consumers who needed protection. There was predatory lending to people who didn't know what they were doing.
Let's be honest: It wasn't just the banks who messed up. There were a lot of people who tried to buy assets they couldn't afford. That's a reality.
Credit default swap is basically just an agreement that I have with you, where I sell you insurance on some bond you own. If the bond goes belly up, I promise to pay you. And as long as the bond doesn't go belly up, you pay me for selling you insurance.
The banks are not lending, at least from what I see. They were so wild and reckless back in the good times that they got burned terribly.
Lawsuits against reverse mortgage companies, including the nation's largest, Financial Freedom Senior Funding, contend that those firms helped pressure older Americans into bad investments.
I went to the bank and proposed that they lend money to the poor people. The bankers almost fell over.
Imagine if the pension funds and endowments that own much of the equity in our financial services companies demanded that those companies revisit the way mortgages were marketed to those without adequate skills to understand the products they were being sold. Management would have to change the way things were done.
I had begun to worry about the housing market back in 2003, when lenders first resurrected interest-only mortgages, loosening their credit standards to generate a greater volume of loans. Throughout 2004, I had watched as these mortgages were offered to more and more subprime borrowers - those with the weakest credit.
People get into debt head over heels because banks make it so easy to do so. Then the banks come along and act like these people who can't or won't pay their bills are the dregs of society.
What Wall Street and credit card companies are doing is really not much different from what gangsters and loan sharks do who make predatory loans. While the bankers wear three-piece suits and don't break the knee caps of those who can't pay back, they still are destroying people's lives.
No opposing quotes found.