Once upon a time, the mortgage market was a safe and staid place where widows and orphans could lend to responsible borrowers paying reasonable prices for sensible housing. But a combination of lax regulation, political opportunism, Wall Street (and Fannie Mae) greed, credulous investors and speculative borrowers turned the mortgage market into a horrible mess that cost this country as much money as a foreign war. Let’s try not to do the same thing with our municipal finance system, shall we?
From Walter Russell Mead, a tale of toxic bonds timed to cripple the Echo Boomers. Back story is here.