(Source: The Boston Globe By Paul McMorrow) – IT’S BEEN more than four years since the subprime mortgage market seized up. The three-year anniversaries of the Lehman Brothers bankruptcy and the nationalization of Fannie Mae and Freddie Mac are weeks away. Time has done little to quell the subprime mortgage crisis. Now, as the crisis moves into its next phase, it’s stalking a group of battered Wall Street institutions and promises to be just as destabilizing as the first.
Toxic mortgages brought down the economy, and they are still bedeviling big banks. The 2008 bailout propped up banks’ balance sheets, but it didn’t flush dangerous loans out of the system. The busted financial instruments are still wreaking havoc. In the meltdown’s early days, the culprits were bad loans sitting on banks’ own books. Now the problem loans are mortgages that Wall Street banks pooled together and shoved out the door and into investors’ hands.
Source: The Boston Globe By Paul McMorrow
August 19, 2011
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