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  1. #1
    Senior Member Senior Member gaelic cowboy's Avatar
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    Default Re: The continuing battle against the inevitable Euro area default

    Quote Originally Posted by Fragony View Post
    Of course they would have denied these loans, why would you put money where there is hardly a chance you will get it back. Banks don't play dice, it is the government that is guilty
    Your forgetting that by selling them as mortgage backed securities they didnt have any risk anymore, unfortunately the banks often bought these type of contracts from other banks. Essentially they all ended up buying contracts they couldnt know the risk on which meant there were unknown ticking timebombs left everywhere.

    They were of course supposed to be rated by the various agencies like Moodys or Fitch etc etc but they couldn't possibly know what the correct risk was. Also the banks tended to chop up both high grade to low grade loans and then sell them together. This was basically an impossible thing to rate or as near as makes no difference anyway.

    I know you want to blame governments for subprime mortgages etc etc but in reality there were really only guilty of not regulating. Essentially the Financial industry believed they had lessened the risk so there was no need for any regulation.

    And also just because a loan is not prime does not mean it is automatically risky Frag.
    Last edited by gaelic cowboy; 05-26-2012 at 20:59.
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  2. #2
    master of the pwniverse Member Fragony's Avatar
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    Default Re: The continuing battle against the inevitable Euro area default

    You are much more knowledgable about the subject so I won't argue with you

  3. #3
    Clan Clan InsaneApache's Avatar
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    Default Re: The continuing battle against the inevitable Euro area default

    The banks needed to grow and one area that was badly served was in subprime which often this includes the self employed. The bank knew these were risky-ish but then figured we will sell the mortgages on the open market and essentially hive off the risk.
    This.

    Aided and abetted by all those 'loveable progressive' politicians. Nincompoops the lot of them.
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