1 Boring Old Man

Earlier in the year, I sold my third of my old office condominium to my younger partners who are still practicing there, and we owner financed it. This week, we got this letter [dated before the mortgage crisis], offering to buy my partner’s mortgage. The Company is in Michigan. While I’ve never gotten such a letter before, had it not been for the recent events, I doubt that my wife [and money manager] would’ve have shown it to me.

I suppose that Mortgage Companies try to buy up owner financed loans for some fraction of their face value in order to reap the long termed interest plus a piece for assuming the risk. At least, that’s what I would’ve thought before I started reading about the roots of our current financial pickle. These last eight years, that’s just the start of things. The loan, instead of staying in Michigan, apparently then becomes a "commodity" to be traded like soy beans, pork bellies, and onion futures on some market somewhere. But then, it becomes something that’s [sort of] insured, and the insurance becomes a "commodity" to be traded as something called a credit default swap on yet another market.

• the Garn-St. Germain Depository Institutions Act of 1982 that repealed part of the Glass-Steagall Act of 1933.
• the Gramm-Leach-Bliley Financial Services Modernization Act of 1999 which finished off the Glass-Steagall Act of 1933.
• the  Commodity Futures Modernization Act of 2000.

What’s not clear is where the money that bought all of this stuff has gone? Who are we buying bad mortgages from? Someone needs to explain all of this to we mortals. Somewhere, somehow, somebody[s] has profited from all of this a lot, and some-other-body[s]  is moving from potential financial ruin to solvency. Whom are we buying what from?

So, as Cuba Gooding said in the movie Jerry McGuire, "Show me the Money!" or Deep Throat said in All the President’s Men, "Follow the Money!"