Will US citizens wake up when they see the new film, “The Big Short,” which describes the origins of the subprime mortgage crisis?

The mortgage crisis as primarily the fault of mortgage originators and mortgage securitization financiers, aided and abetted by the executives of the largest banks.  At the heart of this story is a court case in California where the defense successfully proved financial fraud was not committed by mortgagors induced by mortgage issuers to sign “lairs loans” paper work.  Why? Because they were compensated for writing mortgages and securitizing them, not for the quality of the mortgages for repayment.  The perverse incentives built into the system created the crisis.  The “liars” were often victims of a Pied Piper system to which they were susceptible because of their financial naivety.

he securitization process put purely junk mortgages into AAA-rated securities based on the assumption that only 1% (the historical limit) would default.  When several times that previous limit occurred AAA-rated securities defaulted.