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Politics : GOPwinger Lies/Distortions/Omissions/Perversions of Truth -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (146006)	11/6/2008 4:35:48 PM
From: geode00	Read Replies (1) \| Respond to of 173976

No, it is the securitization of loans that takes the risk out of originating loans. That leads to outsized risky behavior since rewards are divorced from risk. The way it was done also hid the risk in complicated ways that even the people who bought and sold them had (and still have) little idea what they are actually worth. The risk of individual mortgages is relatively easy to discern. The risk of these securities is not....probably on purpose. Yes, idiotic government policies under right wing administrations led to stupid behavior...it always does. You need to differentiate between good government behavior and bad government behavior. "Securitization was based on the premise that a fool was born every minute," Joseph Stiglitz, an economics professor at Columbia University, told a congressional committee Oct. 21. "Globalization meant that there was a global landscape on which they could search for those fools -- and they found them everywhere." freep.com