Subprime - A Sophisticated Pilfering Of The Public Trust

'The subprime mis-pricing issue was understood prior to any debacle. Subprime was embraced by the banks to book fees. And the traders who acquired these assets in prop accounts were part of an overall scheme to artificially inflate asset prices.

This cancerous and predatory mega-financial debacle was a highly sophisticated pilfering of the public trust. The concept of serving the public (subprime was originally there to help low-income Americans obtain mortgages to acquire their own homes) has once again been turned into a cannibalistic disaster. In the end, the banks boosted their fee income, increased the value of their investments, and defrauded the public. This is truly the American Century of win  / lose scenarios, complete with lack of equity and fair play.

The free markets have thrived because of a lax regulatory and corrupt legislative system, which has once again seen the general public foot the bill - not just in terms of Americans who have lost their homes, staff who have lost their jobs and shareholders who have lost their fortunes. But also in terms of the wider effect this debacle is having on the so-called 'real' economy'.

READER COMMENT

1. 'A 'win / lose' ? More like a 'lose / lose'. The banks have hardly come out of this in good shape. The only beneficiaries are the senior staff and traders at investment banks who bagged their big bonuses and exit packages and went off for an extended period of R&R'.