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Who is the blame for the subprime crisis?
Over the last couple of months almost every individual link of the subprime mortgage business’s value
chain has been held responsible for the current situation: borrowers, mortgage brokers, lenders,
investment banks, bond insurers, investment funds, rating agencies – all these parties seem to
have done certain things in a wrong way. Such finger pointing is usually one sided, especially if the
hand belongs to somebody who has to defend his/her/its own position in the mortgage industry.
However, looking at the issue from a more holistic
view, another case could be made. Different societies
are built on different rules and behaviors, established
over decades and centuries. For example, could
not some of the “key ingredients” that have, for a
long time, contributed to the success of the United
States, that have helped to define and shape the
American way of life, be identified as follows:
* Risk taking is necessary and encouraged. After all,
if nothing is ventured, nothing is gained.
* Speed is crucial: do it now and – if necessary – fix
it later.
* Immediate beats delayed gratification. Investing
and consuming feel better today than tomorrow.
* Divide and conquer: dividing value chains and labor
processes makes them manageable.
* Following the script never harms. Do one’s job
in the best way possible, and let somebody else
take care of the rest.
* Numbers justify more than words: what can be
shown with and in numbers tends to look credible.
* Short term dominates long-term perspective:
life and circumstances can change fast.
* Size and appearance do matter: big, shiny houses
(or cars) are great to showcase and tend to influence
self-esteem positively.
Continued on next page
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