Today's climate mimics the 1890s - Pittsburgh Tribune-Review: ""I think the analogy between the 1890s and today is better than the analogy with the Great Depression that we often focus on," said Hugh Rockoff, a Rutgers University economics professor. "One of the many similarities is the real estate crisis. There was a subprime mortgage problem in the 1890s that was very similar to what precipitated the recent crisis."
Before 1893's crisis, many farmers bought homesteads on the Great Plains with short-term "balloon" mortgages supplied by small local mortgage companies and banks. The borrower paid only the interest for five years -- until the principal then came due.
Mortgage companies bundled those mortgages and sold them to investors in New York and London.
The bundles supposedly were insured -- all very much like the securitization of mortgages that preceded our recent crisis -- but they plunged in value, igniting an international banking panic."
The one thing we learn from history is that we don't learn from history... or put any of the white collar criminals in places with cell-mates named Tiny like they should be...
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