Looking to the future

I think the best mechanism for preventing future disasters like the current
mess is to anticipate problems before they begin.

For a moment put aside the idea that mortgages were given to people who
couldn't afford to repay them and take a giant step back.

Before a financial institution would provide that kind of a loan they would
have to find some way to get rid of the bad loan. Their solution to
divesting themselves of the bad loan was to separate the asset from the
liability through securitization.

While securitization isn't inherently a problem, it is when you're talking
about subprime mortgages. I think securitization of prime mortgages is
fine.