April 22, 2016
47 Percent Of Americans Can’t Afford An Unexpected $400 Expense
American consumer behaviors, financial literacy and saving habits have a lot to do with the rise in financial fragility. In many cases, people see debt as an alternative to saving. Banks have perpetuated the issue by pushing high-interest-rate credit cards on consumers and payday loan centers are popping up on every street corner. As Neal Gabler writes for The Atlantic, “It is ironic that as financial products have become increasingly sophisticated, theoretically giving individuals more options to smooth out the bumps in their lives, something like the opposite seems to have happened, at least for many.”
The irony is shocking. Right? Are you with me on this? No? Why so skeptical?
Wall Street and the Financial Crisis: Anatomy of a Financial Collapse
The Report cites investment banks as a major player in the lead up to the crisis, and uses a case study of two leading participants in the U.S. mortgage market, Goldman Sachs and Deutsche Bank. The case study found that from 2004 to 2008, banks focused their efforts heavily on RMBS and CDO securities, complex and high risk financial products that they could bundle and sell to investors who did not necessarily know the composition of the product.
Yeah, well, there is that. Not so shocking after all. My bad.
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