In a nutshell, 'The Big Short' explains
I'll simplify it, so even bankers (who USED to be above used car salesmen on the social scale) can understand, though I recommend EVERYONE see the movie, for the long version.
The big banks found they could 'bundle' large numbers of mortgage loans, rated AAA, and sell them to various entities, for retirement funds, investments, etc, and even though their commission was small, 2% of 'hundreds of millions' adds up quickly, and the Big Boys lived large with their new found riches.
BUT, they ran out of AAA rated mortgages, and reached into the AA and A's, re-packaged to be AAA, with the help of the rating agencies S&P and Moodies, under the 'watchful eye of the Bushies, and sold all of them, around the world.
When those were gone, the unholy union of bankers, Wall St and other crooks, gave NEW mortgage loans (Liar Loans) to ANYONE who would sign on the dotted line, with completely bogus income, assets and credit ratings. These were rated AAA, and everyone RE-financed those, many times over, with all the crooks skimming off their % along the way.
Their were complicated Credit Swaps, and DOS's along the way that left the govt (Taxpaying suckers) holding the bag, when it all hit the fan and GW bailed out his Big Money friends, to the tune of $860 BILLION. (Ft Knox holds under $200 Billion in gold).
Just as the first Bush(R) looted the Savings and Loan Industry, the 2nd Bush made that crime look like chicken feed.
SO, when it became obvious what happened, the worst crooks went to jail, right? HA. They got their full salaries, PLUS Bonuses, from the Bushies, as the 'little people', lost savings, IRA's and their home values were cut in half, with MANY losing jobs and EVERYTHING, so the Big Boys(R) could buy a larger yacht.
Still don't understand? See the movie, but take your blood pressure pills to prevent a heart attack, when you see what the bankers and Bushies did to us.....
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