Over and over, it has begun to drone on throughout society and media. “Loser homeowners”, “irresponsible borrowers”, et cetera… the mantra is being touted the main reason behind the current financial collapse. The responsible parties at the helm of major banks and government have shifted blame to those who do not have the means nor the power to defend themselves. It is easy for the well-connected ceo’s and government insiders to get their faces on TV and get the meme of their faultless leadership into the public psyche.
Jon Stewart just finished drilling CNBC host Jim Cramer thoroughly, though even Mr. Cramer with his poor hold advice regarding bank stock and complicit knowledge of how to ‘game’ the system, is not the true culprit. I am not a financial expert, do not claim to be one and do not assert to have all the answers, but a major banking institution leveraging itself at 35:1 is not the effect of poor home loans but the irresponsible management and leadership of the institution.
The persons holding the cards look down upon and even blame the defaulting homeowners (they are not blameless, but are hardly the key players in the collapse), when it was the the banking lobbyists pushing to relax regulation and the Securities and Exchange Commission (SEC) who relaxed leveraging rules to allow banks more room to game the system. And when it all crumbled… it was the banking ceo’s with hat in hand before congress begging for the socialist handouts, not the homeowner who was being booted to the street for taking an ill-advised, poorly managed home loan that the banks were all too pleased to use as a means of leverage by granting to sub-prime borrowers.
And then the real estate market began to devalue and the risky 35:1 leverage ratio became unmanageable… toxic as they call the debt… while the monopoly money used to play the game in the brokerage firms and credit markets, was something very real to the ‘loser’ homeowners.
http://uniformvelocity.com/2009/03/12/enough-demonizing-mortgage-holders-it-was-the-irresponsible-leveraging/