Garrett is as Garrett does

For a surprisingly adept explanation of how the sub-prime mortgage problem is cascading into other markets, check out this Google Docs slide-show: The Subprime Primer

Back? Good. Over the weekend there some new directly related to the sub-prime mess: The Week That Shook Wall Street: Inside the Demise of Bear Stearns

Nutshell: Over the weekend, the Federal Reserve System (aka The Fed) changes its rules so investment banks can borrow money from the Fed slightly more cheaply, then the Fed takes $30 Billion in really risky debt securities as sole collateral for a loan to an investment bank (JPMorgan Chase), then brokers a liquidation of another major investment bank (Bear Stearns) to the first investment bank. The purchasing bank set the price near $2 a share – a 92% discount from 4 days ago. All in the name preventing a complete financial meltdown, because really, our current partial financial meltdown is plenty, thanks.

Guess who’s left holding the bag when the CDO’s default (aka. don’t pay as expected)? Go on, I dare you.

I double-dog dare you.

That’s right – us, the taxpayers.

Click and Enjoy!

Failing any useful outlet, I made an epilogue in homage to the original (above):

Disclaimer: I bought a house within my means back in Sept./Oct. 2001, just before the local real-estate market went from ‘Hot’ to ‘Stupid’. I went with a fixed 30-year loan. I’m just pissed I have to pay because I wasn’t quite dumb enough to buy a home beyond my means and ignore the fineprint. Grump.

Tags:   Financial · grump · news · opinion · subprime
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