11 Mar
What’s the Endgame?
by Laura Rowley
I believe in free markets — particularly the power of taking a risk in a free market, and in the privatization of resulting profits and losses. If I take out a mortgage whose terms I don’t understand, and my home value doesn’t rise as I expected, then that’s my responsibility. If I buy mortgages or other debt, bundle, securitize, and sell them, and fail to properly assess their risk (or lose the paperwork), that’s my responsibility and my institution’s responsibility.
And if I issue credit default swaps to insure collateralized debt obligations and never actually had the collateral to back them up, that’s not only my responsibility — it’s fraud, and I should be arrested for a crime.
…more…