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Politics : GOPwinger Lies/Distortions/Omissions/Perversions of Truth
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To: geode00 who wrote (139395)9/30/2008 2:39:11 PM
From: TigerPaw  Read Replies (1) of 173976
 
The biggest part of the problem is that the debt-backed securities are bought on credit, and then the options for those are bought on more credit.

The mortgage itself usually relies on 5% to 20% down, but the securities and especially the options are based on about 1% down.

The answer will be to require the hedge funds and investors and companies who are hedging to actually put money behind these purchases. A 50% margin requirement would be a good start, just like at the brokerages.

TP
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