The whole theory is bizzare. Banks didn't have to be forced to write stupid loans at the lead-in to the crisis. Once securitization made it easy to take a cut u

The whole theory is bizzare. Banks didn't have to be forced to write stupid loans at the lead-in to the crisis. Once securitization made it easy to take a cut up front but sell them off onto someone else's books before they blew up, brokers and banks (including mortgage banks unaffected by the CRA) were eager to push through as many bad deals as they possibly could, with basically any buyer who could fog a mirror. Wall St. was so desperate for stuff to bet on that when the supply of borrowers ran low, they resorted to making new side bets on the outcomes of old loans (through synthetic CDOs made up of credit default swaps). Blame the credit rating cartel for declaring large tranches of the whole mess to be "AAA investment grade" and thus marketable to huge institutions that had no business being involved, because they didn't think homebuyer defaults would be strongly correlated due to underlying forces.