How the collapse started that went round the world.

The Feds funded the MESS, Wall St. made a killing, and We Pay For It!
By no design, I have experiences of being on all sides of the current real estate problem; as owner, Loan Officer, real estate Broker, lender, contractor, Officer with a Bank and with Savings & Loan, and selling foreclosed properties across the country with an MBA. Hard to explain, so you can imagine living it.

I see the mortgage crisis that started the crash, as the government shoveling buckets of money into the mortgage market - with instructions to banks to lend to people with poor credit (poor people).
Lots of mortgage money was like throwing fire starter on a fire WOOF prices went up and everyone thought they were very clever owning real estate.
It was magic - lots of money chasing an asset that can only expand very slowly. The $100 thousand house soon was worth $200 and in Calif. $500.

But like all waves it broke when people started having trouble paying the monthlies!
As real estate went down, zillions in value was going down hill like, oh, say a freight train.
And no one can stop it!

And Wall Street brokers securitized these loans calling them AAA! Because they had an AAA rubber stamp handy, or probably to sell them! Institutions, pensions etc. around the world bought them. Nothing safer than AAA mortgages!

So not only does the real, real estate market go down hill, but then this securitized junk paper turns almost worthless. And the banks discover they did not have enough cash on hand to pay the kid delivering the Chinese food.

So Wall Street decides that profit selling this junk paper was great, but now that it blew up in their face, they want the Treasury to bail them out.
And the Treasury is you and I, trusting that China will continue to fund our government debt.

The only guy making out during this crisis is Barach Obama, because he doesn't know what the heck they are talking about - but he says it was Bush's fault because he knew no weapons of mass destruction existed.

2008 Tom Sullivan