"A Banker Speaks, With Regret"

Great Nick Kristoff column HERE in which a former CHASE mortgage manager reflects on the practices that brought the global economy near collapse. A couple of money quotes:

(W)hen mortgages were securitized and sold off to investors, he said, senior bankers turned a blind eye to shortcuts.

“The bigwigs of the corporations knew this, but they figured we’re going to make billions out of it, so who cares? The government is going to bail us out. And the problem loans will be out of here...”

"Some account executives earned a commission seven times higher from subprime loans, rather than prime mortgages. So they looked for less savvy borrowers — those with less education, without previous mortgage experience, or without fluent English — and nudged them toward subprime loans.

These less savvy borrowers were disproportionately blacks and Latinos...and they ended up paying a higher rate so that they were more likely to lose their homes. Senior executives seemed aware of this racial mismatch... and frantically tried to cover it up...

(W)hat is scandalous is the basic unfairness of what has transpired. The federal government rescued highly paid bankers from their reckless decisions. It protected bank shareholders and creditors. But it mostly turned a cold shoulder to some of the most vulnerable and least sophisticated people in America. Last year alone, banks seized more than one million homes...

My daughter and I are reading Steinbeck’s “Grapes of Wrath” aloud to each other, and those Depression-era injustices seem so familiar today. That’s why the Occupy movement resonates so deeply: When the federal government goes all-out to rescue errant bankers, and stiffs homeowners, that’s not just bad economics. It’s also wrong.

Read Kristoff's entire NYTs column. It's a rare admission from an industry insider on the shame - or perhaps better put, shamelessness - of the financial sector that still controls the central levers of our economy and is currently making unprecedented profits while the country continues to suffer from what they have wrought.