I have been thinking about the the whole subprime debacle.
Why did it even happen? Making loans to people that you KNOW who won't be able to pay back is just stupid. Yeah. The banks HAD to know. It is their job to.
Yes, sheer greed came into play.
You may have heard "money is the root of all evil", but that is a dreadful misquote. The actual quote is:
1 Timothy 6:10 (New International Version)
New International Version (NIV)
Copyright © 1973, 1978, 1984 by International Bible Society
10 For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.
Yeah. That sums it up. The LOVE of money, not the money itself. Money is a tool. I like to compare it to a circular saw. Lack of understanding and proper care will cause injury.
Now where did this greed come from? The banks, as I mentioned, already KNOW these "subprime" people will eventually default and then the bank will own the house.
Rising house valuations.
The bank gets these suckers to buy the house for them. The bank gets paid for a few years. The sucker defaults. The bank gets the house for a song. The bank then resells the house at its new and higher market value. KACHING!!!
But the housing market values collapsed. The banks couldn't resell their foreclosures. And then we get to the part about "many griefs". Banks, now penniless, have to close their doors.
Anyway... That is my $0.02 on the mess we are in. Greed. Greed by the banks and the people that run them.