Danny Schechter - ColdType

The first ingredient of the crisis is a blend of bad information,
financial inexperience and myopia of consumers/investors.
They fell for the prospect of getting a mortgage at rates never
seen before and then extrapolating these rates out for thirty
years. This myopia was encouraged and indeed exploited by
banks and other lenders eager to attract and retain clients.
This is surprisingly similar to what has been seen in the past
when banks and intermediaries have advised their clients to
invest in financial assets ill-suited to their ability to bear risk.
In both cases, a biased advisor is the reflection of a clear
conflict of interest in the financial industry.
Financial literacy is low not only in financially backward
countries (as one would expect), but also in the US. Only two
out of three Americans are familiar with the law of compound
interest; less than half know how to measure the effects of
inflation on the costs of indebtedness. Financial literacy is
particularly low among those who have taken out subprime
mortgages. The intermediaries exploited this financial illiteracy.
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Mortgage abuse is the easiest component of this criminal
enterprise to document and prove, but there’s more. Much
more.