One of the things I have not been able to figure out since the subprime mess went down is if Wall Street really was just blindsided by the subprime loans or did they know the bag of shit they were buying would soon start leaking and funk up the place.
My gut reaction is that Wall Street knew damn well what they were buying and were so busy reaping the millions of dollars while passing the risk on to the next sucker that no one bothered to stop and say this is insane. I think they knew because most people who work on Wall Street are pretty smart. I mean, if you don’t have an MBA from Harvard, Stanford, Wharton, Kellogg, U of Chicago, Dartmouth or any of the other top 15 or so graduate business schools the odds of getting a job on Wall Street are slim to none.
I will certainly say that Joe Blow mortgage broker with the community college Associates degree knew the loans were crap. All it took was one phone call to any decent mortgage broker to know that the stated income loans went from being a way for legitimate entrepreneurs to get decent financing to the primary vehicle to finance Carleton Sheets students buying investment properties so they could flip them on HGTV programs.
Personally, I am waiting on the emails to start surfacing from the big shot traders who knew these loans were crap. I mean how can people making millions of dollars per year not know that a person with a 580 FICO score, thousands of dollars in open collections, a bankruptcy, and no kind of stable job won’t run into financial problems at some point and not pay the mortgage back?
Rant over…
