Blame the poor?

Subprime Suspects in Slate says that while there appears to be a concerted effort to lay the fault of the subprime crisis at loans through Fannie & Freddie, the dumb-lending virus originated in Greenwich, Conn., midtown Manhattan, and Southern California, not Eastchester, Brownsville, and Washington, D.C.

…lending money to poor people and minorities isn’t inherently risky. There’s plenty of evidence that in fact it’s not that risky at all. That’s what we’ve learned from several decades of microlending programs, at home and abroad, with their very high repayment rates. And as the New York Times recently reported, Nehemiah Homes, a long-running initiative to build homes and sell them to the working poor in subprime areas of New York’s outer boroughs, has a repayment rate that lenders in Greenwich, Conn., would envy. In 27 years, there have been fewer than 10 defaults on the project’s 3,900 homes. That’s a rate of 0.25 percent.

On the other hand, lending money recklessly to obscenely rich white guys, such as Richard Fuld of Lehman Bros. or Jimmy Cayne of Bear Stearns, can be really risky. In fact, it’s even more risky, since they have a lot more borrowing capacity.

I’m guessing that the amount of money required to buy up the really bad loans is just a candle in the mighty wind o’ greed that’s howling through the financial markets.

The photo is Takin’ it to the BANK$Y by guano and you should click over to read the backstory, and maybe also check out the Banksy group on Flickr and/or Banksy’s Wikipedia entry.

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