[lbo-talk] BBC 8/23/07: Shrewd lenders spark US mortgage chaos

[Jeffrey Fisher]

On 8/23/07, Doug Henwood <dhenwood at panix.com> wrote:
>
> Yes, a lot of smoothing talking con artists sold people a bill of
> goods on subprime, but in a bubble, people just want to believe, to
> make 20% a year, and they don't want to hear about payment resets.
> Bankers and brokers lied to customers, but customers also lied about
> their incomes. Let's not get too sentimental.

Sentimental, no. But I wonder who was taking advantage of whom. Who wanted
more to believe who's lie? The same people who sell these people on the
American Dream (TM) precisely in order to sell them loans like these are
shocked! shocked! that many of those people wanting loans want them so badly
as to look blithely past details they ought, in some ideal
everyone-acts-rationally-all-the-time game-theorist's world, to pay
attention to.

huh. it suddenly occurs to me: isn't it just a little bit ironic that the
growth of this bizarre industry hawking credit reports and credit management
coincides so neatly with the rise of the subprime market? maybe is missed
this in the articles i've read on it. but it strikes me as a little bit like
philip morris selling nicotine gum and patches to help people stop smoking.

j