Toss 'em in the tank

John Derbyshire opines on the true reason for the subprime crisis. I think he may have the right of it...

In one of my fitful attempts to earn an honest middle-class living in order that I might bask in the sunshine glow of politicians' favor, I was employed by a Wall Street bond brokerage as a computer programmer, in a team supporting a system used for trading those very same mortgage-backed securities that have gotten us into this mess. One component of our system carried out the actual allocation of mortgage debt to "pools" of securities for onward trading. The input to this process was a type of not-quite-security, a form of paper the firm had not actually got its hands on yet, but which it had bought on a forward-delivery basis. These not-quite-securities were known in the trade as "deliverable when issueds," abbreviated of course to "DWI."

There you have it. The whole structure of mortgage-backed securities trading rests on something called a DWI. Just a coincidence, of course.