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Pay no attention to the people behind the curtain

Wednesday, November 26, 2008

The ABC's of Market Collapse

By Keith R. Schmitz

Though the part and pieces about the current financial collapse have been swirling around the media for some time, Thomas Friedman does a good job of cogently laying out the progression of events, in this case explaining why the smartest guys in the room weren't working at Citigroup (the fine folks who currently holds my mortgage):
So many people were in on it: People who had no business buying a home, with nothing down and nothing to pay for two years; people who had no business pushing such mortgages, but made fortunes doing so; people who had no business bundling those loans into securities and selling them to third parties, as if they were AAA bonds, but made fortunes doing so; people who had no business rating those loans as AAA, but made a fortunes doing so; and people who had no business buying those bonds and putting them on their balance sheets so they could earn a little better yield, but made fortunes doing so.
I would be less hard on the first part of this conga line and was just an excuse to kick off the rest of the action, but it is obvious that this house of cards fell under the weight of greed and incompetence and lack of rules and regulations.

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