Jim Jubak: Why Won't the Financial Crisis End? Video (3min 16sec).
It turns out the bankers who bought derivatives based on mortgages didn't read the fine print, says Jim Jubak, the Webs #1 investing columnist. Now they're learning that the senior investors who bought the safest pieces of the deals can grab all the cash flow and force other investors to sell.
"If you want to know why the financial crisis is going on for so long, why the banks can't put the sub-prime mortgage crisis behind them more quickly, focus on this. Just as individual homeowners got into trouble on their individual mortgages because they didn't really read or understand the fine print, it turns out the banks didn't read the fine print either. The didn't read the fine print on the derivatives, the packages of mortgages and the things based on the packages that they were buying and selling..."
