Re: Debt (Was: How much is a FICO score worth?)

On May 25, 9:53 am, "Elle" <honda.lion...@[EMAIL PROTECTED]
> wrote:
>
> Post-o, or maybe I am misunderstanding your words? I thought
> the credit crisis's origin was based in part in banks
> selling their mortgages (or repackaging them), and then
> their being sold again, until multiple layers existed,
> ostensibly to cover the risk of owning mortgages.

Correction: the mortgages were sub-prime ones.  Repackaging and
selling mortgages has been around for decades without any damage to
the economy.  The problem started when banks lent money to people who
they knew wouldn't be able to afford them in a few years and people
borrowed money for goods that they knew they couldn't afford then and
accepted the terms of a contract that would postpone the effects of
their poor decision.

What baffles me in this whole story is not so much people stupid
enough to borrow beyond their means to keep up with the Joneses, a
plague that's always been and will always be around, but that banks
actually lent them money without any solid asset.

Of course, we all got to pay what those stupid lenders and stupid
borrowers deserved...

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