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Originally Posted by Dcat
..hehe, I'm not sure that banks "fell victim" to toxic assets.
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For sure they were victims of their own greed.
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Exactly. If this hadn't be allowed to go so far, and for so long, we wouldn't be mere inches away from a full on collapse of the economy.
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I recently read an article on Bill Clinton and he was saying the one thing he wished he had done was to put some kind of regulation on derivatives. He said he let Greenspan talk him into not doing anything because he didn't think they would make up much of the market and in the end they were a huge player and a huge cause of the downfall.
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I agree that the small players are being screwed, but the thing is.. if the Federal Reserve was not so corrupt, and in bed with the Big Banks & Wall Street, the smaller players would have not had to resort to being sucked in to compete with the Big Banks. The smaller banks would not have touched sub-prime lending, and could have grown in a more healthy natural way. The Big Banks could have been left to fail instead of being constantly infused with cash.
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Small banks can still survive in a natural and healthy way for sure without ever touching the sub-prime market. I think a lot of them saw the record profits that the bigger banks were making wit those and the temptation was just too much for them. You are 100% correct when you say that the big banks & wall street are in bed with the very corrupt Fed and those relationships helped them cover their troubles for a lot longer than they should have.