"should have tried to get my cat a subprime mortgage..."

No, this is not funny any more, but it reflects just how bad and maybe good, things had become back in the good old days of easy credit. As reported in an interesting article in the Denver Post, (Origins & Consequences, December 2, 2007), a veteran mortgage brokers thinks that it would have been than easy back in the old glory days of subpriming the population out of existence.

Now, the bulge banks are to the rescue: they want through their stooges at the Fed and the treasury, to lessen the burden on the subprimers who are being foreclosed out of their homes, by working out a deal to "freeze" the reset interest rates on the ARM mortgages. Wishful thinking. Never mind, that many of these people were not your average joe six-pack who needed a roof over his head- more than 40% of subprimes were issued in 2005 and 2006 to condo-flippers. Never mind, that many of these subprimers were middle-class folks who wanted to live like kings, as the article above illustrates. Never mind, that many of these same folks did not put a single penny toward the equity on their houses- yes, sure they paid hefty origination fees and the bulge banks and brokers (BBB) made tonnes of millions on the securitization of chopping up of these mortgages into slices (call them tranches) and selling them to unsuspecting Europeans, Asians, American, and Martians. Never mind, that nearly all of these same mortgages were sold, sold off, and then more, to who knows who? The very recent report that four Norwegian municipalities are on hook for tens of millions of Citibank subprime junk is an early indication.

Let's examine this: in the first place, who owns the original debt certificate? Many of these same people, were/are living in their borrowed dwelling are mere renters- this is the formal definition of someone who lives somewhere and does not own an equity in that same house. When you have no equity in your house from the get-go, how in the world can you be considered an owner? Just what do you own?

If, however, you look at it from the opposite angle, things are much clearer: the BBB need help and big time. They need help, guess from who, yes the tax payers and the special government agencies (SGE), you know that Fannie Mae and the Freddie Mac. BBB want to "freeze" the loan rates so that not so many houses go into foreclosure. The problem is that they are unable to do that, because they can't trust each other on a loan, as they don't know what the other bank owns and how much? As we said in these pages before, the risk has not been mitigated, it has been lost. We need to find out where it has gone. But, there's not much time until the next quarter and the next financial report.

This is the story as is being told.