Prime info on the subprime disaster

For the past 4 years, I worked on a website that did nothing but sell wholesale mortgages. But it took the American media to explain the big picture to me. Finally, in mid-2008, I think I finally understand the sub-prime mortgage crisis from top to bottom, just as said crisis is pushing the country toward a recession.

This series of articles last fall from Bloomberg helped me understand the What:

1. Subprime Securities Market Began as "Group of 5" Over Chinese


2. 'Deal with Devil' Funded Carrera Crash Before Bust


3. Bass Shorted 'God I Hope You're Wrong' Wall Street


4. Rating Subprime Investment Grade Made 'Joke' of Credit Experts


5. Savannah Cries About Bicycle Left Behind in Rest of Subprime (not currently available)

This series shows who was selling sub-prime mortgages, to whom, and where they went after they were sold. Pretty much the basics of the situation, but with a lot of details that might shock you. I've passed these links on to several people who agreed that they just didn't get it until they read them.

Then there's the 5/9 episode of This American Life called "The Giant Pool of Money" which filled in a lot of the missing gaps in the big picture. This story provided the Why, as in: why were mortgage companies so eager to lower their loan requirements in the first place? The short answer is that there was a huge global pool of money that couldn't get enough of American mortgage-backed securities.

Between the two, there's probably no better top-to-bottom explanation of the situation anywhere.