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GFC or sub-prime crisis?

How soon they forget.

I find it amazing that what used to be known as the "US sub-prime crisis'' has somehow morphed over the past 5-6 years to the "Great Financial Crisis'', particularly in mainstream media reports. Yes it was a financial crisis but the origin of the whole sorry and sordid affair was crooked US banks who lent money to people who would not normally qualify for loans so that those people could punt the property market (hence the term "sub-prime''). Rolling Stone writer Matt Taibbi once mentioned that among the sub-prime borrowers were hookers and crackheads, which shouldn't be surprising given what we know of the scruples practised by US banks.

Anyway, the mortgages were then cleverly packaged as assets that enjoyed  a regular cash flow and given fancy financial names ("collateralised debt obligations'' was one that stands out) and sold to unsuspecting suckers around the world. Investors here knew them as  Lehman Minibonds and other underhanded structured products. Surprise, surprise when the borrowers couldn't pay, and the cash flow was shown to be rather irregular, the  instruments were then found to be worthless and the whole flaky edifice collapsed.

It was white collar cheating of the highest order masquerading as high finance that caused the financial crisis and we shouldn't forget that - especially since regulators fell asleep at the wheel and those banks were deemed "too big to fail'' and were all bailed out with taxpayers' money.