There's Plenty of Money for Mortgages

What we don't have is anyone willing to risk anything. Why? Get this: rich pricks never take risks, they get you to take risks for them. Only you take a risk when you buy a car or home on credit. That is because everyone who "loans" you money gets a piece of paper in return and this piece of paper is then sold to another rich prick who makes a living out of buying "paper" and converting it into a bond (along with a thousand other pieces of paper), a bond that is guaranteed. Now this "package" of loans (between ten and a hundred million dollars) that have been made to various kinds of risks is sold on the open market to "investors" looking for a safe deposit box that will pay them interest. If a few clods don't pay their loans and "default" it's OK because the seller of the bond will simply replace the shit loan with another. What has happened is that there were a ton of big bonds containing mortgages on office buildings, high rises, baseball stadiums, and luxury yachts suddenly had a little problem. Some large mortgages fell behind in their payments. So when one bond company had a "problem" (a margin call on those defaulting bonds) everybody who shifts risk around like they were mistresses over the age of 28 suddenly wanted a hell of a lot more than a guarantee; they actually wanted to see exactly what was in those packages. So here we are. There is plenty of money around, there is just no one who will pay up to hold what are now seen as risky bonds. Or at least they won't pay up til the interest rate on them rises to compensate for the risk the buyer now sees out there. Lower rates? Don't kid yourself. Higher rates is the only thing that will cure this ill, unless the Fed makes cheaper money available to those rich pricks who never take real risks. So if they can get ten percent on money they borrow from the Fed for only four percent, capitalism will once again triumph.

Bottom line: all the sub prime loans are being repaid with only the expected 3% default, but it's those people who are now going to get fucked. Again.