Freddie, Fannie, and the Underlying Problem

There is an underlying issue that I have not seen discussed much in the aftermath of the Feddie and Fannie show, and it is this: Why should mortgage securities be backing up much of Wall Street? For that matter, why do securities for student loans continue to appear?

Do not the brokerage houses and investment banks have better investments than mortgages, and especially sub-prime mortgages? Is the U.S. economy so unproductive that the banks and brokers turn to mortgages and student loans? Just wondering.

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1:16 pm on September 8, 2008