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In the end, the US financial system (and perhaps many others) became nothing but a massive criminal conspiracy to defraud borrowers (through such instruments as “liar's loans”, NINJAS—no income, no job, no assets, no problem!—and “no doc” loans) as well as investors in securitized products (mortgage backed securities, collateralized debt obligations that were securities of the worst MBSs, and on to CDOs squared and cubed). All of this led to layering and leveraging of debt on debt and debt on income. At the peak, US indebtedness was five times national income—meaning each dollar of income was pre-committed to service five dollars of debt! This was, of course, impossible. The pyramid of debt collapsed like a house of cards.
Read more: http://www.businessinsider.com/complete-collapse-not-out-of-the-question-2010-11#ixzz14h5QUoT5
Read more: http://www.businessinsider.com/complete-collapse-not-out-of-the-question-2010-11#ixzz14h5QUoT5
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