the previous election 2012 special event
money power and wall street the clouds are still hanging over the global
economy and they're still filled with risk
the epic story of a global financial crisis here we are three years plus
after and very little has changed where we are now
Wall Street got bailed out and Main Street did and how we got here that's
put together a portfolio of credit risk of the bank to take these ideas in
applying the way that they never expected once the seed was planted it
there wasn't in it stopping it
six billion dollars in bonuses this year this kind of cult of more more MORE grow
grow grow the economy is melting the Bush administration is leaving Obama
gets a real glimpse of the future disasters coming
panic in the marketplace you may have just made the decision to destroy the
world
these bangs transfer risk across the Atlantic outside the purview of american
regulators turn into a Frankenstein monster
with bank robbery is the global financial system any safer this crisis
really never ended
money power and wall street
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workers make their way to wall street
forbearance brokerages hedge funds insurance companies and mortgage lenders
it is the largest single sector of the American economy and industry that is
almost double the size of America's manufacturing sector
business with enormous power and global reach
it is the industry that let America and the world into its worst economic crisis
since the Great Depression
the banks say they exist to create wealth holding entrust our collective
bourse promising to invest the trillions of dollars that stream in from
businesses pension funds and savings accounts that belong to all of us
morning in the fall of 2011 bankers arriving in lower Manhattan were caught
by surprise
the recession had destroyed 11 trillion dollars of Americans net worth of
recoveries farm Occupy Wall Street wanted Bankers Hill responsible most
americans think in with good reason that Wall Street got bailed out on Main
Street we have very high we lost eight and a half million jobs in the recession
people's houses are worth what they paid a lot of them don't have jobs their kids
graduate from college and moving back in some protesters were calling for bankers
to be prosecuted pretty clear actually that there was massive illegality going
on and if somebody was subpoena power was intent on prosecuting that I don't
think there's really much doubt that they would be quite successful in
criminal prosecutions
in a matter of weeks occupy demonstrations led to scores of cities
across america and the world going for radical changes in the banking system
bankers responded by saying that the answer is to move on and get back to
business somewhere company made a series of bad mistakes and we all paid form
including but what makes people upset is that a lot of the people that are on the
streets demonstrating Occupy Wall Street is that the economy hasn't recovered but
banks have if you want a strong economy you have to have financial services
companies that are safe and sound in able to lyndon able to know if you want
to have a recession
go ahead and and and hammered the banks and make sure that there they fail
because then you'll have another
American people of accounting
the meltdown of 2008 there have been dozens of hearings
have lost money and it didn't work out well I would like to ask your opinion of
the role that over-the-counter derivatives pointed questions have been
asked the financial
there have been few satisfying answers what goes on at Wall Street exactly what
caused the crisis and how did we get we are it's difficult to understand even
for professionals regulators and the industry to focus on complexity but at
the end of the day people usually have a pretty good ability to tell when
something's wrong somehow we just missed you know that home prices don't go up
forever CD is a pool of anyone to understand together and then can be
slight
securities and managers of these large financial institutions in some ways have
been given an impossible task they won't be able to comprehend what it is their
institutions are doing and that is really really scary but never existed a
few years ago who is the brilliant
it's hard to pinpoint the origins of America's financial crisis but one
weekend at this resort in Boca Raton Florida is a good place to start
assembled here in June 1994 we're a group of young bankers from JPMorgan at
the time it all seemed innocent enough was a gathering of global celebration in
part is an opportunity to relax but perhaps much more importantly as an
opportunity to get creative innovative people together in a room to discuss a
variety of different topics and they were young mostly in their twenties and
that there are plenty of money floating around in there any young bunch of kids
would do
drunk had parties you know this is a normal stuff happens at conferences as
did my boss some people drank some people didn't they played hard but they
also work hard they were striving to address an age old problem in banking
how to reduce risk problems were unable to adequately deal with their own credit
risks
we're thinking about how to manage we were thoughtful and deliberate and
careful we have a responsibility not just to make a profit for shareholders
but to look after the financial system over two days of meetings and looked at
whether they could find a way to make their lungs less risky the first
journalist to tell the full story was Gillian Tett they were going to look for
ways to enable financial institutions to path between them one way to do that was
another way though was to separate out the risk of a loan going bad from the
loan itself and out of that came this drive to develop credit-default swaps
credit-default swaps are kind of derivative that insurers alone against
default this was a very new concert traditionally derivatives were away to
bet on the future value of something for hundreds of years farmers have traded
derivatives to protect themselves against fluctuating crop prices
it is this type of derivative that has been traded on the commodities exchange
in Chicago along with the futures of fuels currencies and precious metals
in book a return to JPMorgan team realized that they could use credit
derivatives to trade their loan risks bankers borrowed one set of ideas that
have been developed in the commodities market and applied it alone for the
first time this idea was essentially created under the banner of making the
financial system
credit-default swap was engineered by Blythe masters and involved exon exon
was the client to the bank and credit exposure associated with that
relationship in the wake of the Exxon Valdez oil spill and a rash of lawyers
exxon took out a multi-billion dollar letter of credit with JPMorgan credit
creates credit risk if Exxon were to fail on their obligations that JPMorgan
would have to step in and make good on those obligations on their behalf it was
a large amount of exposure and there was a significant amount of risk associated
with that and that risk is a big drain on a bank every time a bank to set aside
certain reserves of capital so JPMorgan when they made the loans would have had
to set aside from capitol JPMorgan has to hold certain capital relative to the
size of that loan in the event the loan is not paid off a hundred percent as you
expect of course if you don't have to do that in your bank you'd prefer not to do
that
finance more freely than take on more debt right
John masters started looking at who could take on their loan risk and free
up JP Morgan's capital European Bank for Reconstruction and Development EBRD EBRD
could receive compensation from JPMorgan for taking on or sumin credit risks and
felt that that was a good risk-reward proposition and so risk was essentially
dispersed and why did JPMorgan do that because we wanted to free up our
capacity to do more business this was a major financial innovation credit
derivatives made it possible for a bank to skirt capital requirements of capital
hold less and so banks became able to create more and more credit to shared
the risk that they don't want to take that they would prefer to be exposed to
the exxon deal was just the beginning
demonstrating that risk could be off-loaded and capital freedom JPMorgan
had struck gold in 1998 they decided ramp up their credit derivatives
operation that year another young banker joined the team
Terry doing all part of my job was to come in as a traitor and to build a
credit derivative trading book including all the risk management around the more
exotic products that was what I was brought in to do
previously JPMorgan had written credit swaps on single companies like Exxon do
young was asked to rate swaps on bundles of debt the idea was put together a
portfolio of credit risk a portfolio of names first trade was a credit-default
swap on 306 corporate names on JPMorgan's books and that list of three
hundred and six entities they were very highly rated they had very low credit
risk and the credit-default swap was ensuring JPMorgan against default by
those three hundred and six entities Fortune 500 companies or it would have
been some of your most well-known household names and so we were giving
investors an opportunity to invest in our loan portfolio of work a lot of due
diligence to assemble this portfolio of loans and you can get it in one easy
bite sized piece the bank facilitated this by slicing up the portfolio into
different risk levels or tranches investors could choose how much risk
they were willing to take different levels of risk there was some investors
that wanted on really risky stuff and there were some investors that wanted to
earn a little skittle
from there the bank look to expand their business even further this idea what if
we can create a market where people were able to buy and sell freely
independently of the companies themselves at risk associated with
lending to those companies and so they began selling derivatives that were
simply bets on any and all portfolios whether the bank owned them or not
these products came to be known as synthetic collateralized debt
obligations synthetic CDO's there were investors who were able to invest in
some entities that they had not had access or by buying a credit-default
swap by investing in a credit-default swap because it was a name that they
hadn't previously had access to so there was a lot of a lot of very positive
reinforcement of the market and it just grew and grew very naturally once the
seed was planted there wasn't any stopping it it was the beginning of an
unfettered brave new world of banking this was pretty new stuff
incredibly new stuff it was amazing it was clearly a product that was in need
we had identified a need most of the members of a global derivatives group at
JPMorgan were in their twenties including masters and do your butt with
the creation of the credit-default swaps market they had mean banking history in
the long run this all men that credit which is a vital part of the lifeblood
of any economy the global economy became a more readily available asset and that
would be an unambiguously positive thing
credit helped drive growth companies deploy capital
wasn't any longer just an idea in a room in Florida it was the creation of an
entire marketplace
could now be easily treated
fueled a worldwide credit
other banks got excited about the money to be made writing credit derivatives
was a derivative salesman at Morgan Stanley who remembers the pressure to
get more deals done the volume of transactions who's just exploding and
then I used to know all the statistics to talk about it every meeting how this
is a growing market you have to get your car they can make money for us to focus
and importantly it was a private market unregulated and out of you see on the
banks can see all the positions is no public market for these derivatives you
can't look at the newspaper private markets and nobody else on the market
the spreads difference between what banks could charge for derivatives and
what it costs to provide them could be HUGE how much with these things
bankers the spreads on derivatives are several general rule and that's why the
banks train them
picture of the best referencing the spread the bank earned their gonna maybe
make one percent
you can do
there was growing concern in Washington country $33.25 amount being traded and
proprietary accounts of those banks that kind of risk overhanging the country one
day with a proposal circulated to rein in the banks and to regulate derivatives
we're trying to protect the money of the american public which is at risk in the
more the head of the Commodity Futures Trading Commission
oxley Bourn led the charge the regulator which has been
authority to oversee the major derivatives group seaborn was absolutely
right because what she said is if you don't have transparency and regulation
of derivatives the risk of buildup and they're gonna lead to a financial crisis
it's going to cause massive taxpayer Bill the banks lobbied hard for no
derivative regulation the banks didn't want anyone to know how much risk they
were taking on it it would have to quantify it on the balance sheet they
wanted to be able to push it off and hide it and that was why they lobbied so
hard to make sure that Swaps and Derivatives would be treated differently
from other kinds of financial products
others wanted them to be regulated like insurance one of the most heavily
regulated products in the country
insurance products for all the obvious reasons if you if your gonna write
insurance you have to have enough money to pay off credit default swap you don't
have to have that same amount of money on hand or anything else including
importantly no disclosure so you saying it's a kind of under the table insurance
agreement that avoids regulation it's an insurance product designed not to be
regulated as an insurance product and designed to avoid regulation at all one
thing we do know is that when a product of any type
is designed with minimal regulation capital inactivity moved into that area
and expand dramatically privately negotiated by professionals unnecessary
the chairman of the fed alan greenspan sided with the bank's alan greenspan was
coming from very libertarian tradition keep your hands off everything the
markets will sort themselves out if there's a problem then we'll clean up
afterwards and that really was the way the Federal Reserve operated under under
his leadership for almost 20 years on capitol hill supporters of bank
deregulation need urgent stark please share of America's dominance is the
financial center of the world is at stake
before them legislation to lift restrictions on how banks could do
business we could find London or Frankfurt Shanghai becoming the
financial capital of the world this bill is going to make America more
competitive on the world market and that's important and legislation to
prevent oversight of credit derivatives job not just on Wall Street in New York
City what
in America and it benefits every consumer in America and we do it by
repealing glass steagle the campaign to roll back glass steagle a depression-era
set of reforms was led by the country's biggest bank citicorp they felt it was
in that way and persuaded lawmakers both Democratic and Republican that glass
steagle should be repealed it also symbolizes when everything really
started to go wrong is the most important example of our efforts here in
washington to maximize the possibilities of the new information age global
economy in the end banks would get larger and derivatives would remain in
the shadows the derivatives market went into darkness almost no transparency in
no regulation and what you see is this explosion in the growth of derivatives
in the United States and throughout the world banks had won the day
credit-default swap would now be introduced to new markets the next
application of the same technology was two portfolios of consumer credit risk
and in particular mortgage-related credit risk
and the higher the risk the better what everyone is trying to create is
something that has a high rating and a high yield that's the Holy Grail that's
the goal is to mix together assets in some way so you come out with a triple A
and a bit richer
and so Wall Street discovered the rewards of funding the American dream
just as they had bundled corporate loans bankers now bundled mortgages
by these big pools of mortgages and credit default swaps stuff together
bringing in a house or to get ready to put through the securities
bankers bread they're investing dollars across the country but especially in
states in historic levels of population growth places like Florida Nevada
California and here in Georgia Atlanta was Roy Barnes is the former governor of
Georgia
the fourth fastest growing state at the turn of this century and the fastest
growing state east this is a hot market to start I put my house on the market
and to the bank and it was gone
elected in 1998 bonds is renowned for having taken on wall street over
subprime lending market the street had traditionally avoided subprime lending
has been around for long and is supposed to be lending done the people whose
credit is inferior and in the eighties there was no place for subprime nobody
wanted the banks wouldn't bad because there was a high res credit that's no
problem
the subprime market was originally a niche market
originally it was not the major banks it was the mortgage brokers who are
specialists in this market
what really changed for subprime mortgage securities and you could sell
it
tranches and then they wrap it up
so they could be packaged together and have an overall is in the south
50,000 a month and coarse mode is triple A
is just a feeding frenzy for subprime the economy strong home buyers are
willing and able to spend double what they did just two decades ago and you
could just bad pay back very loose very lives but what big banks on Wall Street
did not or would not see what was happening on the ground around the us- a
wave of lending abuses its a Fraser likely to hear in the future
predatory lending mortgage companies we say that we was going to the state of
bankruptcy the Wild West experience and home mortgages was well underway her
mother of three agreed to a second mortgages 27% we were creating mortgages
had never seen before and they were being created
faster and faster on the house was as high as 40% we saw borrow worst given
loans that were greater than the value of their home
homebuyers who owns that had no income
the borrower particularly the elderly or the low-income had no clue as to what
they saw and there was a tremendous growth of mortgages that we knew made no
sense financially when you have a higher interest rate than you have high points
you have prepayment penalties when your balloon payments when you have
adjustable-rate mortgages in later those bad practices on top of high interest
rate it becomes predatory atlanta has become such frequent targets of
unscrupulous lenders and counselors regularly hold community meetings why
did they sell them to people they were not good for they did it because they
could housing advocates around the country took on predatory lenders but
one of the fiercest fights was here in georgia over what was called the Georgia
fair lending out we don't need rhetoric the bill sponsored by state senator
bentsen for now people are
more money than they could ever dream back and others are making a last-ditch
targeted high-cost loans and predatory lenders with a series of rules and
prohibitions the mortgage lenders and the bank's struck back you would have
thought I had recommended that we the plan of salvation
why were they so opposed to me there were threats the residents in georgia
wouldn't be able to get mortgages because investors were not by the
mortgages in Georgia no bank would create a mortgages despite the efforts
of the mortgage Robbie Burns in Fort got the bill passed in April 2002 predatory
lending law nation that similar legislation could pass in other markets
like California they opposed Barnes reelection they funded his challengers
and lobby to rescind the law right after governor defeat in november 1 that top
legislative priorities for the new governor and the new legislature to God
the Georgia think it was about two weeks for a seven-month period predatory
lending in Georgia declined it may have been the last chance to slow the housing
nastradamus that the world was going to come to an end but I could never have
foreseen the difficulty that exists now perhaps I think we still would have seen
it unrealistic but it wouldn't have gone up as fast and it would have collapsed
as deep a hole if we hadn't had these products
a big banks continued to package and sell or mortgage portfolios and more and
more of these videos contained high risk subprime debt to keep the rating
agencies on board more credit-default swaps were sold I have a pool of
mortgages have a thousand words from california and I wanna packages up but I
decide well some of these mortgages baby subprime and I want to buy a little bit
of credit-default insurance and by doing that you improve the profile in theory
yes waiting for it I have laid off two percent of the risk on this portfolio
should I get a better rating than if I just sold the pool has it was so you
take a lot of crap that's kind of mortgages that are ok but you weren't
sure it and the credit agency says hey that's a good idea
yes yes and it seems it in the housing market many investors began to take more
risks precisely because they have bought protection with credit-default swaps
the team at JPMorgan was also dabbling in mortgage but they weren't sure it
made good sense we had some mortgages on our books we certainly understood
mortgage-backed securities market but we had a lot of trouble getting comfortable
with the Big Data we had years of historical data about how corporate
performed during business cycles but we didn't have that much data about how
retail mortgages performed during different business cycles had
securitized products and we have not figured out how to lay off some of these
risks and I couldn't figure out what we never imagined doing anything at all
they were just taking the risk and sitting with it the first wave of
JPMorgan bankers who had developed these original ideas in the nineteen nineties
when they thought what was thought to have them other bad for taking a plane
wave of their never expected to get very worried
we were just about to say done on a transaction global phone call and we
were discussing the risk that we were about to do and we had discussed it over
and over and over and finally someone on that phone call we almost had stopped
thinking and stopped reassessing the risk as we went along and every little
tweak among the way we'd all said ok we all looked up and it's not ok problems
other banks were not so cautious aggressively sold subprime CDO's to
customers all over the world london became the second pitcher for their
trading and sales operations the City of London actually did yeoman service
creating some of the next year structures they did this offshore is why
not register deals whose role private placement so they were going through
legal loopholes
a group of state-run banks in Germany known as lenders banks were among the
biggest customers disarray Pixlr who worked at JPMorgan said she was amazed
by these banks appetite for subprime mortgages you knew that a core group of
banks in Germany with buying we strongly believe they were very naive we were
amazed that they would bias I mean every single person every salesperson was
envious of that particular salesperson at was able to cover the line is banks
in ITB because you were in one of the hottest seats globally you're going to
generate tremendous profit margin they were big buyers of US one of the
strongest running around telling people how good they are investing
multinational Deutsche Bank did several deals right Kb
did you think at the time that your products were helping I kitty good
things for them to buy
otherwise we wouldn't have manufactured product and children were bullish on
subprime mortgages in the us-
bullish on the mortgage market in general and subprime which was element
of it not overly aggressive part of the absolute
2005 the total outstanding value of credit-default swaps around the world
was measured in trillions of dollars and was doubling every year did top
management at JPMorgan understand credit derivatives yes absolutely they did at
other banks no other banks certainly not the regulators understand them I don't
think I don't think the credit ratings agencies the bankers for the regulators
fully understood all of the kinds of credit instruments in other words some
big banks simply didn't know what they had in terms of risk certainly they
didn't they don't know some of the forms of risk that's exactly right
housing prices continue to soar banks packaged more and more CEOs
theoretically there was no limit on investor didn't need to own any actual
mortgages so-called synthetic CDO's allowed investors to bet many times over
on someone else's portfolio or dead
allowed participants to the market to to take their positions without being
constrained by the size of the underlying market
and synthetic CDO's all you had to do was make a side bad based on what would
happen to this group of mortgages and have that be the basis of the CDO the
fact that someone had done it one time wouldn't stop you from doing it again
and again and again to how is that different than betting on the outcome of
the Super Bowl or a horse race or a craps table there is no difference it's
just a pure bet by somebody who has no economic interest in what they're
betting on the outcome of the Super Bowl you can bet on the outcome of horse race
while you're at the craps table you're betting on which way the days you're
gonna go decade you have the most phenomenal machine anybody's ever seen
everyone seems to be brilliant combination of free market innovation
and globalization appeared to delivered is incredibly heady cocktail of between
2003 and 2006 the average CEO of Wells Fargo remembers attending meetings with
bankers and regulators
what happened and there might be bankers and they would often go around the room
and say
concerned about how I would say toxic waste building above the likely outcome
what is your fellow bankers say to you when you told them that you thought this
stuff was toxic
well the ones that were in it so I was wrong and everything that everything's
fine we don't see any losses this was absolutely wrong for customers ever been
wrong for us because we think that there's a great set of attitudes on wall
street about where risk will flow and if you ask people they're basically split
between two camps one says that risk will flow to the smartest person the
person who best understands it and the other says that risk will flow to the
dumbest person the person who leased understands it and at least based on my
experience in my understanding of what has been happening in the derivatives
market it's the latter I was amazed at the interest on the part of investors to
invest in a product that was highly complex and very risky on top of it so
let me get this straight to the party you develop this trudging of stuff
credit-default swaps on it but now everybody else has jumped into the game
everybody wants to do it but you were team decided to stop why did so many
others keep going marching towards the cliff
i mean there are certainly some investors some banks and borrowers who
are greater than they should be no one wanted the party to end most banks
believed housing prices would never go down let alone crash to imagine losses
of that severity required very significant assumptions about the path
of the economy which were just not in people's mind so it required things like
assuming that house prices in the United States fell by 25% people were thinking
that way as long as house prices never fail then these risk would never come
home to roost and that ultimately was obviously very flawed logic home sales
the unraveling began in late 2006 when housing prices started to drop only a
very few bankers could see the bubble they were trapped
2007 2008 all the smart money all the banks tried to effectively repackage
what as quickly as possible and get it off the books but there was a second one
of the Wall Street banks that took advantage of a declining market was
Goldman Sachs according to a congressional investigation the bank
created a series of CDO's containing toxic subprime and then sold them to
customers using credit-default swaps bet against them they bet against their own
clients so their clients Goldman was making money
Coleman has a little slogan clients come first no they didn't not in these
transactions
came first second and third I think the only major bank which made money when
the housing bubble burst in a settlement with the SEC Goldman admitted that some
of their marketing materials did not disclose important information but
Goldman claimed that their investors were highly sophisticated institutions
customer was that German Bundesbank even when there is a downturn in the market
they were still in the market is telling them it's on the screen there headlines
everywhere danger but they still wanted to go ahead did you feel there was an
obligation on your part to tell them
wake up the markets are going down maybe should stop buying this crap those
discussions discussions actually happened but they felt that it was just
a temporary glitch in an overall bull market it will recover it has to recover
in July 2007 the German bank IKB stuffed with subprime the first bank to fail
thousands of homeowners are do it was only a matter of time before the crisis
came back to wall street value of homes nationwide we knew that the housing
bubble had burst
we'd been reassured that the problem had been contained but by the beginning of
2008 it was becoming clear that this was a much much bigger problem than anybody
anticipated there was a broad misperception of the risk in housing
prices that widespread view that we could have a regional decline in housing
prices but never a national decline in housing prices proved to be horribly
wrong
were trying to unload what they could but there was confusion Citigroup they
were running in circles
incredible things about Citigroup we now know was tossing these risks up its
balance sheet this risk came right back almost like a boomerang without knowing
they had set up one business to offload risk and then completely reversed that
business taking those risks back onto its balance she was quite clear to me
that a number of large financial institutions had not had that kind of
management information systems which allowed them even to know what all their
risks were that was astounding to you it was it would all come down to those
credit-default swaps would they pay off as they were designed to do we have
known for generations banks are susceptible to run banks can't function
everybody comes he wants their money at the same this time it would be a run on
an insurance company AIG was on the hook for 440 billion dollars worth of
credit-default swaps remember an insurance contract is only as good as
the credit quality of the insurer to have to pay and if they can't pay you
for whatever reason that this whole process of transfer breaks down
September 18 2008 conference of IEEE CEOs and CEOs traditionally don't read
their libraries during meetings but I kept looking around noticing that a
number of them were so I turned 21 we researched and you looked like the world
is in a MTG could not conceivably have paid off all of those credit derivatives
because it had miss understood the risks and did not have what we call a balanced
bark or nearly enough capital to back their losses
didn't everybody know that he was holding a lot of CTS know there was no
disclosure but that's the whole point
reported this to anyone else other dealers have no idea what's going on
the other banks don't know the banks turned as market into their own private
game it was in fact a financial show where we were manipulating banking by
moving the risk out to one door but bringing it back into the banking system
by another do the risk was not leaving the banking system
everybody connected to these changes
any part of the chain breaks down because they cut back on track
the entire system
the idea dreamed up by a group of young JPMorgan bankers at a weekend retreat
many years ago was supposed to reduce risk their original idea being taken and
turn into a Frankenstein monster would come too big and spin out of control
that degree it was a very scary time we were in totally new territory and the
notion that Lehman Brothers could be filing for bankruptcy could be at risk
of the same fate was absolutely unprecedented and the implications
thinking through the implications of that for the health not just the US
economy but the wild I mean it wasn't it wasn't really conceivable to do that I
couldn't get my mind around it I know others couldn't we never thought coming
we never saw that coming and I was disappointed hugely disappointed I mean
I was part of a market that I believed was doing the right thing and maybe I
was idealistic maybe I was young maybe I I didn't fully appreciate where we were
going but there's a whole system going on all the way from the borrower of the
mortgage all the way through to the investor there's a whole system of of
people who maybe we're turning a blind eye maybe were you know just I don't
know it's frustrating to see certainly
it should have happened most of our financial crisis oil disruption wore
this was caused by a few institutions about 20 who in my opinion lost all
credibility relative to managing their risk and sad thing is that should never
happen
the management should have stopped before it got too big and too poor
suffering today the fallout is felt mostly in places that had seen the
highest growth Georgia ground zero of the subprime crisis local neighborhoods
city streets cities throughout the united states are seeing a rise in
vacant and abandoned properties and that's where the neighbors as neighbors
were concerned not so much with the complexities of the subprime mortgage
market and direct these things will hardly ever understand what we feel on
the street is the fact that the house next to us is vacant abandoned partially
burned and we wonder how long its gonna be there how long we will pay the price
for that abandoned neighborhood cannot survive long when it has a growing
inventory of properties
sometimes
no one even knows who owns the properties
it's hard to know because it's been sliced and diced so many ways that could
be somebody you have security where investors on the investors are around
the world literally and so it's just you know persons lands of vacant properties
mostly vandalized and just sits here and we can do anything with it and the
reality is that that plays out across this neighborhood hundreds of types that
house has a loan that is somewhere lost in a huge financial be put together by
Sam Young Turks on wall street its laws and that billion dollar package goes
there's nobody to to look after and their whole subdivisions like this by
the way they are just lost in this great and so it affects main story because
Wall Street was to the greed of Wall Street broker Mangere