How we cite our quotes: (Chapter.Paragraph)
Quote #1
The creation of the mortgage bond market, a decade earlier, had extended Wall Street into a place it had never before been: the debts of ordinary Americans (1.14)
Before the creation of the mortgage bond, Wall Street companies focused on corporate debt, which makes sense, right? A business would naturally have a lot more cash to go around than a middle-class American. Though it might seem minor, this shift directly leads to the subprime mortgage crisis.
Quote #2
The growing interface between high finance and lower-middle-class America was assumed to be good for lower-middle-class America. (1.19)
The stated reason for the rise of the subprime bond is that it gives working-class folks an opportunity to be lent money at reasonable rates. That's great in theory, sure, but there's a big problem: those loans are explicitly designed to screw them over. It's a con.
Quote #3
Millions of Americans had no ability to repay their mortgages unless their houses rose dramatically in value, which enabled them to borrow even more. (3.9)
In other words, many Americans are relying on the increasing value of their homes (which they can then use to borrow more money) to pay their bills. That's a disaster waiting to happen. All it takes is a few months of falling home prices for the whole system to go kaput. Yikes. And that's pretty much exactly what happened.