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Are you saying then that the originating bank doesn't even have a the note underlying the mortgage?

The note has been sold half a billion times, and, in the process, a lot of these notes have been lost or even destroyed.

I understand that there is slicing and dicing, but I'd think that the originating bank actually has the note.

But the actual banks -- as Krugman calls them, the "big marble buildings that we think of when we say 'bank'" -- had very little to do with giving out mortgages.  They were buying and selling mortgage-backed securities, but I believe the money for the actual mortgages, especially the high-risk ones, was coming from investors, brokers and other elements of the shadow banking system.

After all, who needs real banks when you have Angelo Mozilo?

(facepalm)

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Tue Mar 3rd, 2009 at 07:45:46 AM EST
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Who taught these people about banking???

Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith
by Migeru (migeru at eurotrib dot com) on Tue Mar 3rd, 2009 at 08:04:08 AM EST
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People who believe that The Market Is Always Right, that the business cycle has been arbitraged away, that this time it's different and that it's OK to gamble as long as you only do it with other people's money.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Mar 3rd, 2009 at 08:09:20 AM EST
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You're surprised by this after Katrina and Iraq?

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Tue Mar 3rd, 2009 at 08:09:51 AM EST
[ Parent ]

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