And y'all thought it was over. It was. Now it may return. Get ready to hear words like systemic risk, securitzation, swaps, and CDOs again chanted to a background tune of "Who owns my home sweet home anyway?"
The greedheads in big banks and investment houses figured out how to use debt like a stock. They created a device and found an abundance of fellow greedheads to buy their paper. They needed more debt. They found it as willing ratings agencies, banks, and lenders created and sold ever increasing numbers of mortgages. We all know the bottom fell out of that mess.
Greed won, prudence and fiduciary responsibility were abandoned until recalled by the federal government. Now we have part two of the same greedhead created mortgage mess. Get ready for 1929?
All that paper, the titles to property, are up in the air. No one is quite sure who owns what, when, and where. If I sold you someone else's car and I really could not prove I was the owner, I think I committed a crime. If you bought it, you committed a real stupid. And that's the basis of the next recession--Wall Street sold hot goods to a lot of stupid greedy people. Will we bail the bankers out again? Stay tuned.
Lack of proper mortgage paper trail could leave big banks reeling again