Section I. What Creature Is This? Chapter 2 The Name of the Game Is Bailout Summary and Analysis

Summary

Financial experts were taught that the way banking worked in the US was the only way it could work, and so the fraud kept on going. Banks loaned depositors' money out to risky debtors who would likely not be able to pay the loans off, which was what the banks wanted. The banks made money on interest, not principle, payments. The game was played in stages. First the debtor would default and stop making payments. Then the bank would arrange for interest payments only to keep the profits coming in. The bank's next move was to offer the debtor more credit, and that increased the interest payments. If the debtors stopped paying altogether, the...