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Today, on CNBC, I heard one of their talking heads say that investors are capitalize on the Japan earthquake. One method of profiting mentioned was credit-default swaps--insurance payouts that paid if Japan defaulted on loans and other credit.
Credit default swaps? Ok, I thought these dangerous financial instruments would have become dinosaurs. Weren't these the little buggers that started the cascade of Wall street failures that eventually crashed Wall Street and the mortgage companies and culminated in a bailout--paid by all of us???
Another thing. I just got a letter from Freddie Mac. Wells Fargo sold our mortgage to Freddie Mac. Two other friends said they rec'd similar letters. Their mortgages were sold--mainly from the "too big to fail" banks to large/mid-sized financial institutions.
It may be typical to sell mortgages, but I hope to Pete these banks aren't repeating the horrendous actions that led to the mortgage collapse. Are these banks packaging up loans, selling them as securities on the secondary market (to make further profit) and are these mortgage bundles unstable? The economy sure is. There is a lot of uncertainty out there.
How can these banks get billions in help from us, then turn around and commit the same financial crimes? Will we be robbed once again, while these bozos stand around shrugging their shoulders-acting like they are victims as they scream, "Well golly shuckers! No one could have possibly predicted this!"?
I guess time will tell.
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