They
still do not seem to get it do they? It was not the banks and it was
not wall street, unless you consider bond rating agencies part of
wall street. It was the bond rating agencies like Standard and
Poor's. If the rating agencies had rated the mortgage backed
securities triple F instead of triple A, pension fund managers and
other investors would not have bought them. Case closed! If every
one would read “The Big Short” by Michael Lewis they would
realize that the banks did not need to be bailed out. The ones
needing bailed out were the ones that had sold insurance (credit
default swaps) on the mortgage backed securities. AIG for one sold
those credit default swaps and should be taking the bond rating
agencies to court. Why are they not doing so? All in bed together,
maybe? These bonds (mortgage backed securities) enabled banks to lend
money risk free. The bond holders were the ones left holding the bag
and the people who had bought insurance on the bonds made million.
AIG and other insurance sellers stood to go under. So who should be
going to jail? Rating agency CEO's? One of the big reason this all
happened is that no one considered the fact that people were losing
their jobs to China and would not be able to pay their mortgages.
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