The Real Villains in Our Financial Crisis

You have to love how people are bashing those who took out mortgages they couldn't afford but downplay the fraud, deceit, or negligence of all those who really capitalized before the crash in the marketplace.

The lenders and brokers who allowed people to skirt the time honored lending practices of the past while pulling in huge sums in bonuses and compensation plus the speculators who drove oil, commodities and stocks via hedge funds and credit default swaps are the real villains.

The wealthy who are supposed to generate all those jobs with the "Trickle down philosophy are the high on the list of culprits.

The top 10% of families reporting adjusted gross income on their tax returns control 47 and 1/2 percent of all reported income and they as investors in the hedge funds are responsible for the 50% plunge in the market since the October 2007 high.

Hedge funds (you have to have a million dollars to join) have been forced to sell assets to cover the people wanting to get out of the fund. They have also been forced to sell stocks to cover short positions because most of them leverage about 30dollars of debt to every dollar invested according to reports. As stocks began to fall they had to buy stocks at lower prices to cover short positions. That is how Volkswagen got to be the largest company in America for a short time when it was discovered the Porsche owned a large part of the company, so other investors drove the price sky high on the news.

Hedge funds compounded the problem by buying credit default insurance from dummies like AIG and insurance divisions of Investment brokers meaning they passed along the risk of their highly leveraged gambling to someone else. That's what the 8 1/2 trillion dollars is really all about, taxpayers are paying for that insanity. Incidentally, remember when the sub prime mortgage fallout was only supposed to be 5% of all the mortgages out there. That figure is probably correct but it doesn't explain the massive credit problem does it?

Joe