[politicket]

Is this the real reason banks are going under? Since bets start with loans, was there incentive to make subprime loans even knowing they'd default?

I honesty don't know. My mind is still churning all of the possibilities.

I am not a conspiratorial person by nature. I try to look at the economic signs and understand the movement of the money and trades. But one thing REALLY bothers me:

The credit derivatives problem began increasing on a HUGE scale beginning in 2004-2005. The Fed was the head cheerleader, and Goldman Sachs and JP Morgan were holding the cheerleader up on their shoulders for all the investment community to see.

I was IN the investment consulting arena at the time. I know for a fact what investment 'strategies' they were devising.

Here's my conspiracy theory - and then I'll get back to being sane again....if 'someone' wanted to get rid of the middle class in this country then this is sure the way to go about it. </tinfoil>

Sigh....I feel better now...

[GOPJ]

Here's my conspiracy theory - and then I'll get back to being sane again....if 'someone' wanted to get rid of the middle class in this country then this is sure the way to go about it.

Thanks. I've sometimes felt that a George Sorose type mind would be able to use this new product (derivatives) in dangerous way because so few would understood abuse of the product.

On the other hand, most free market outcomes are based on money moving from the impatient to the patient - and this might be no different. The destruction of the middle class might be an unintentional consequence of a more "perfect" market.