Reply #40: Don't get me wrong (I don't favor any sort of "buyout")

[salin]

I think that is looking for an answer to what I predict will be a smaller problem in the long run (the individuals with the bad loans.) I hope congress stalls on this effort.

But - to blame individuals - with single loans - compared to the lenders who made thousands of these loans - who stopped following standard practices such as - checking income, debt ratios, etc.? There is one root problem. Then what about the financiers - creating this new "financial vehicle" - on risky loans - but market them as safe - and sucking up HUGE fees on the way; and the rating agencies barely glancing at the contents of these CDOs and then rating them high/safe for investors? These are the SERIOUS problems.

The news at the end of the week about banks calling in margins - this is going to have HUGE implications and this is where congress should be attending - not on the individual mortgages/homeowners.

I am linking to a thread on LBN which raises the spector of how big financial problem we may be facing and a link from a post on that thread:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3216266&mesg_id=3216266
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3216266&mesg_id=3217472

By casting the story as dumb/greedy folks taking out risky mortgages they can not afford - diverts our attention from both the major causes that need to be addressed to prevent this from recurring AND from the very real financial/economic crises that we could be facing as a result of these lending (and loanbundling) practices that have gone unchecked for the past recent years.