O/T: The Bail Out

snipped-for-privacy@hadenough.com says...

IMO, it does. Without Wall St. the banks would be holding more of their own paper. The money wouldn't be made so much from originating the loans as holding them. They would naturally be more careful with their own portfolio.
OTOH, once the investment houses got involved, anything with a AAA rating was the same as any other and "AAA" got stamped on everything. The really silly thing was the banks were packaging and selling known junk on the loan side of their operations, then having their investment side buy the same junk others were packaging. Apparently they thought others somehow had a better class of "AAA" junk.

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