It is all a product of greed…the current economic crisis, I mean. But whose greed? The lenders? The creators of mortgage backed securities? The home purchasers who were unable to meet their obligations when their adjustable mortgage payment schedules reset?

Yes. All of them, and a few more.

Families who borrowed money to buy homes that they couldn’t truly afford are the victims of their own greed. They bit off more than they could chew.

Mortgage brokers who sold loans to borrowers who couldn’t prove their creditworthiness did so to make a commission for themselves. They were doing harm to the borrowers and the lending institutions who made the capital available, and they did it because of their own greed.

Lenders who made capital available on a “no documentation” basis, also known now as a “liar loan”, did so because they could collect more fees and turn over their inventory of capital more quickly and reap more profits (profits are good, not bad) for the corporation. More profits for the corporation meant more bonuses for executives and sales managers. They knew these were loans that would eventually fail, but they would have moved on with thier profits and leave it to someone else to worry about the failure. Many of these lenders no longer exist; a product of their corporate greed.

Wall Street investment bankers used computer programs to create packages of sub-prime loans that they could sell to investors as if they had meaningful value without much risk. Of course the “not much risk” idea was a pure lie. They were able to sell these “securities” because they had higher returns and the purchasers either didn’t do their due diligence or didn’t want to believe they were buying much more risk than they were. These CDO’s (collateralized debt obligations) were bombs just waiting to explode. Why did Foundation and Endowment managers buy them and include them in their charity’s portfolios? Greed, just plain simple greed. Now many charities are struggling and can’t provide the level of service they did just a few years ago before the greed bubble.

Lending and borrowing are fundamentally and morally good. Capitalism is fundamentally and morally good. Profit making is fundamentally and morally good. However, all of these fundamentally and morally good practices give opportunity for immoral conduct when the people involved allow themselves to participate in greed and not the wise implementation of all of these good things.

In our normal human knee-jerk reaction to our current bad situation, let us not call bad what is good. Let us label what is bad as bad, i.e., greed is bad! Doing good fair business is good – for everyone involved. We should be celebrating capitalism and encouraging the moral participation of all people in it. We should never allow governments to take away personal responsibility or personal opportunity in an attempt to remove risk from our lives. Without risk there is no reward. Part of managing risk it to only do business with morally sound people and companies. When the immoral are found out, they should be prosecuted and/or allowed to fail. The failure of morally bankrupt businesses is a good thing. It allows good companies and good people to prosper.

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"Investor Education for Main Street America"