Subprime Loans Quotes
The Meltdown of 2008 came a year later and Citigroup, one of the largest banks in America, had massive liquidity problems and in order to stave off bankruptcy the taxpayers had to come up with $45 Billion. The bank executives, as this quotation demonstrates, knew that they were in a very risky situation and that if the subprime mortgages started to default, the “music would stop” and they and the other banks would have a massive liquidity problem. None the less, they kept on investing more and more of their bank customer’s money and making money in what they knew was a highly risky enterprise. The greed clouded their judgment and when the music stopped and many were no longer dancing, the Meltdown of 2008 almost destroyed the entire national economy and triggered the Great Recession where the overwhelming proportion of Americans had to suffer for the greed of those who could not “stop dancing” even as they knew it was very dangerous.
This quotation is classic as it digested the major reasons for the worst financial crises since the Great Depression into one paragraph that captured the essence of the problem. The great dispute has been ever since, who let this happen, who was supposed to stop it from happening, and who did what to correct the problem afterwards so that it would not happen again? In this situation, the Wall Street Houses had paid securities rating firms to give these bonds an AAA rating even though they were backed by very risky mortgages none of which had AAA ratings.
