No. The repackaged subprime loans are repackaged and "renamed" -
Structured Investment Vehicles - or -
Mortgage Backed Securities. I am sure there are other nomenclature which bankers have dreamed up. As the piece indicated as bankers were allowed, under the repealed Glass-Steagall act, (repealed by Clinton), to buy stocks. They do not buy stock (securities) like you and me. They buy blocks of Call or Put options which are highly leveraged. Repeal of Glass-Steagall allowed them to speculate....but they wanted some insurance against loss. Soooooo.....they invented and "insurance" without calling it insurance (therefore not subject to insurance laws requiring securitization (something to back up their purchases. Sooooooo....the invented a piece of paper called a DERIVITIVE, called a CREDIT DEFAULT SWAP, and many other names to
insure those stock buys. It was only paper, backed by nothing,...NOTHNING....Nothing. So when, for example Lehmans failed, Lehemans turned to AIG (who wrote the derivitive) and said to AIG, pay the insurance. But AIG did not have the money....So.......FED chairman Ben allowed Lehmans to fail and propped up AIG. Why, because if AIG failed, they underwrote most of the WORLDWIDE BANKING DERIVITIVES and that would have caused the entire global financial system to fail on Sept.16,2008...a day which will live in infamy.
But know this....the $700,0000,000,000.00 cannot cover $65 trillion in derivitive defaults which is the credit derivitive world. AIG will fail, and probably very soon. If you look at the banks in Europe, Ireland, Scandinavian coutries, Germany, Japan, New Zealand, Australia, China, Russia....all are very, very suddenly found to be in worse shape than the AMerican system. That is why Ben Bernanke, last Monday, sent $630,000,000,000.00 to the European Central BAnkers. All he did was put his finger in the dike. It will not help. The losses are on the order of magnitude of thousands greater than Bernanke sent.
This calamity is unavoidable and it will be something unlike anything you and I can imagine in its effect on our country and countrymen. It did not have to happen this way. But now that it has been unleashed, nothing short of God Himself can stop it.