You still have to pick the correct investments. There is no guarantee, which I have a feeling many of these people involved in this scheme did not realize.

The biggest difference between what happened with Mitsubishi and what is happening now is that there is no secondary market for car loans like there is mortgages. Mortgage companies were making high risk loans knowing full well they would be sold and they would not be stuck with the defaults.

I don't know much about how loans are packaged when they are sold, but I would be interested to know how much information the secondary buyer has about the borrowers. If they know full well they are high risk loans then too bad for them.

I am glad to see that some mortgage companies are working with borrowers to restructure their loans and there does not seem to be any desire to bail out the lenders the way it was done with the S & L problem years ago.

An interesting related issue is going to be a possible SEC investigation into Countrywide chairman Angelo Mozilo's stock sales over the last year or so. Seems he sold about $300 million in stock. The investigation would focus on his knowledge of the loans Countrywide was making and whether or not he had reason to believe the stock would be falling.

Loans for a car are entirely different than loans for a house. Cars depreciate while houses even with this slowdown in the market are still going up if you look at the country as a whole. A car manufacturer may give you a cheaper interest rate simply because they want to get them off their inventory books but a car loan is still higher risk then a house loan.

This whole mortgage mess is still not about people getting into more house then they could afford. You could not even do this unless you already had a mortgage of less then 50% of the value of your house. It is the only way OPFM was able to take a larger loan out against the house then what the clients already had. That is what makes this a sad story since this mess is really affecting people who are generally very responsible savers. Most were well on their way to paying off their houses.

As for the Bush comment. Since when does a president have anything to do with the stock market? Yes Stocks have done remarkable well in the last 8 years as long as you had international stocks and invested in precious metals.

This investment scheme should have stayed afloat but my guess is that they made some poor investments choices and then all the people involved started to sift off some of the profits for themselves and that compounded so that the 8.5% became unreachable to make a profit. They kept it going for a while by signing up new clients since with real estate going up in value so fast many more people were eligible for this kind of loan. Just my guess as to what happened.

well duh!!! of course he knew it would be tanking that is why he dumped all those shares. what did you think he would do with that inside info,go down with the ship?
these fellows aren't boy scouts like some of the posters here seem to be.

by the way it isn't illegal to sell shares based on inside info as long as the proper sec forms are filed. the deck is stacked against the investor. why do you think the crooks write the laws, to protect people like you from people like them???ha

here is a list of the forms , form 144 and form 4 are the ones this chap should have filed to make insider trading completely legal...
http://www.gsionline.com/support/formtypes.html