Credit Default Swaps and Other Crap
http://en.wikipedia.org/wiki/Credit_default_swap
Holy crap this is a key contributing factor….
You default on a mortgage and the under, underlying insurance company is screwed….
Have too many of them and the investment bank goes out of business…
Risky borrowers with the too good to be true mortgage rates that adjust (mental morons) get a mortgage… then default… mortgage backed securities to spread the risk screwed the taxpayer esp since i gotta keep paying my mortgage and taxes…
Glass-Steagall Act…Phil Gramm… Jimmy Carter and Why I won’t vote republican & maybe not democrat…
The Glass-Steagall Act of 1933 established the Federal Deposit Insurance Corporation (FDIC) in the United States and included banking reforms, some of which were designed to control speculation.[citation needed] Some provisions such as Regulation Q that allowed the Federal Reserve to regulate interest rates in savings accounts were repealed by the Depository Institutions Deregulation and Monetary Control Act of 1980. Provisions that prohibit a bank holding company from owning other financial companies were repealed on November 12, 1999 by a bipartisan, conference committee version of the Gramm-Leach-Bliley Act signed by President Bill Clinton (excerpted from wiki page)