The banks made loans that they then immediately sold in the form of securitized mortgages, so they didn't care about whether or not the borrowers could really repay. It turns out the borrowers couldn't.
The banks, pension funds, etc., then re-bought the securities based on the mortgages. Woops. Woops.
It is often said that before you die your life passes before your eyes. It is in fact true. It's called living. -Terry Pratchett
2 comments:
This may be longer, but it has pictures:
http://www.businesspundit.com/the-sub-prime-primer/
Totally kool! And Pics make everything better. Same story, though. BTW, thanks.
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