CBS Evening News

Making the Most of the Market

with guest Janet Tavakoli - August 4, 2007

This was a taped live interview, and I was hit with a surprise question when CBS asked me what I tell “my investors.” I do not have investors (as I told CBS, but it was probably not communicated through channels by interview time), so I offered a point of view for investors in general.

I misspoke earlier in the interview. I meant to say recent mortgage lending is the largest Ponzi scheme (not “one of the largest”) in the history of the financial markets. The mortgage lending business model is not viable (see also the simplified illustration on the home page of this site). Money from new investors partially funds the obligations to old investors. High dividends suggested a very healthy business model, but the mortgage loans were unsound creating an unsound business model.

[Obviously, the majority of the mortgage market employed viable business models based on sound mortgage loans and sound cash management, but I am not referring to those].

Click Here to Play Video for CBS Evening News August 4, 2007

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