On Thu, 17 Sep 2009 18:58:25 +0000 (UTC), J G Miller wrote:

No, what crashed the world's financial systems was the selling on of
domestic mortgage debt which had been generated from banks loaning out
money to people who did not and would never have the means to repay
the loan.

The abilty for the people to pay or not isn't particularly relevant.
The root problem was that the underlying value of the asset wasn't
enough to cover the debt on it.

If you are being charitable you say the banks took a gamble on the
asset values continuing to rise and by the time the debt was due
their value would cover it. A gamble they lost big time.

IMHO the reality is the banks got greedy, seeing lots of income from
the interest on massive loans, the mere fact that the value of the
loan was far more than the value of the asset was ignored.

--
Cheers
Dave.