I noticed that the piece pointed out that many people who's homes are worth less than the mortgage are just deciding to "walk away", even when they have the ability to pay. The article goes on to say that the old relationships between lender and borrower no longer exist, leaving no stigma to treating default like a simple business decision.
My only real complaint about the 60 minutes segment is that they focus so much on Stockton and "subprime" that it could lead some viwers to think that this crisis is only impacting the poor people with bad credit in backwater towns.
Alan Greenspan and his successor Ben Bernake would say over and over that it was contained, "the problem was contained." It turns out that it's contained only on planet Earth, that's it.
.....It sounds complicated, but it's really fairly simple. Banks lent hundreds of billions of dollars to homebuyers who can't pay them back. Wall Street took the risky debt, dressed it up as fancy securities, and sold it around the world as safe investments. It sounds like a shell game or Ponzi scheme; in some ways, it was a house of cards rife with corruption, greed, and negligence.....
Sixty Minutes reran this story again last nite, supposedly an updated version. Comments to the linked site are also an interesting read IMO, even though regular Seattle Bubble readers have seen / heard much of it all before:
Comments
My only real complaint about the 60 minutes segment is that they focus so much on Stockton and "subprime" that it could lead some viwers to think that this crisis is only impacting the poor people with bad credit in backwater towns.
Best line (from right at the end):
House Of Cards: The Mortgage Mess
My favorite quote:
.....It sounds complicated, but it's really fairly simple. Banks lent hundreds of billions of dollars to homebuyers who can't pay them back. Wall Street took the risky debt, dressed it up as fancy securities, and sold it around the world as safe investments. It sounds like a shell game or Ponzi scheme; in some ways, it was a house of cards rife with corruption, greed, and negligence.....
What else do you need to say?
..
House Of Cards: The Mortgage Mess