Making loans means lenders make money. There's an incentive to make loans. If there wasn't, no one would make them. But there's also risk, which is why the old cliché goes "You can only get a loan if you can prove you don't really need one." If the risk is minimized, then the money flows freely.And who ultimately gets stuck with the risk at the end of this game of musical chairs? Well, it's spelled "U-N-C-L-E S-U-C-K-E-R" and pronounced "You and Me".
And it did.
Monday, September 22, 2008
Revenge of the deadbeats.
Everyone knows someone to whom they wouldn't lend a Kleenex, much less a few hundred thou to buy a house. Suppose the government told you that you had to lend them the money, but then let you sell the risk to someone else?