Milt, good questions, Let me try an example. Bill is the banker and he makes a loan to a deadbeat, KC. In the old days Bill was the only one at risk since he kept the loan in his bank. In the 1980's we decided to change the rules. Now Bill takes KC's loan and sells it to Mary Ann and uses the money he he gets back to make another loan which may also be bad. To make the matter worse Mary Ann may just sell the loan to someone else living in China or Europe.
That means no one knows who is at risk. So the theory is that you buy all the loans because you are not sure who owns the bad loans. Reality they are just too lazy to figure out which loans are bad. If they made that determination they would know exactly who made the bad loans and could put them in jail if the broke the law. At the least they could identify immoral lenders. Guess I am saying they do not really want to find out who caused the problems since it probably is their pals.

Milt question three has a simple answer greed.



It is a mistake to think businessmen are more immoral than politicians!
Keynes, 1937