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It was a very interesting and clear explaination. My only problem is the section where they show the bankers holding the CDO's that become almost worthless because all the mortgage payment streams dry up and instead become foreclosed houses. As I understand it more than 90% of homeowners are making payments so the losses shouldn't be that crippling. I realize that they wrote these mortgages with highly leveraged borrowed money but that is no excuse for puttiing themselves in the position of total failure just because real estate prices corrected. Surely they knew like most of us that house prices had to come down. Also, I don't understand what is so terrible about letting them fail. Won't they just be replaced with banks who do not take such irresponsible risks?
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