You said “Good theory oldbill, but that is bout it. There is a large difference between commercial loans and single family home loans!”
It’s not commercial paper at the root of the problem - it’s the home loans to risky borrowers. The commercial paper is the creative construct that were based on the home loans and provided a layer or several between the underlying loan and the ultimate investors. When the base layer loans go south, the paper that uses them for its collateral becomes worthless.
Theories are not based on reality. Loans to illegals are reality. Bush and Schumer ain’t bailing out theories - they are bailing out illegals and their greedy anglo landlords and the homes they bought that they couldnt’t afford.
Nice try. You qualify for a position at the Wall Street Journal.
True enough. But where were the rating agencies, and the sophisticated buyers at the consuming financial institutions, on this? Asleep at at the switch, as far as I can tell. It's the fact that such paper was salable in a secondary market, at something other than an appropriately deep discount, that allowed the game to continue as long as it did.