The Housing Rip Off

I recently worked at one of the largest software providers for CDO's and CLO's. The very stuff this "Liquidity" crisis is involved with. Let me tell you this is another wall street scam. The people who took out mortgages, without income verification do not deserve the loans the got.

I don't know about you but in dealing with banks I always have to show them everything, like pay stubs etc. I think it is unrealistic to expect a $300,000 loan with no documentation. They then and this is a big then...Wait this deserves some explanation

When dealing with wall street people haven't you all heard this phrase:

"Past performance is no indicator of future return."

We have all read that before right?

What did the rating agencies do when they looked at the CDO's and CLOs? They assumed the opposite and rated the CDO's as AAA(The highest rating.) Why did they do this because in the past it had worked that way.

This reminds me of long term capital (An oxymoron if I ever heard one) where the pointed headed PhD's knew there was a relationship between bonds that had always worked in the past so it had to work going forward. Those guys were so smart they won a Noble prize for economics. yet again they forgot that pesky little phrase:

"Past performance is no indicator of future return"

Now how did that happen. This whole debacle has now been turned in those mean people want to take that poor little house away.