Economic Confessions
This column was written by CBS News Early Show co-anchor Harry Smith.
The economy and the stock market are still feeling the effects of the subprime mess. Banks that dared to get deeply involved in shaky mortgages are facing uncertain futures and some of the larger financial institutions that bet heavily in sub prime have already paid a serious price.
A young entrepreneur named Richard Bitner and his friends saw real opportunity in the mortgage business some years back. So they opened a business and went in thinking they were going to be like George Bailey in it's a wonderful life. They'd make loans to folks who might not otherwise get them, make them homeowners thereby strengthening communities and make some money along the way.
Bitner, in his book "Confessions of a Subprime Lender" he tells the story of how those good intentions got sidelined by the thirst for profit and the flimsy criteria brokers were using to make loans. Bitner wisely got out before the business collapsed. When I asked him today how long this crisis would continue he said, "We're only in the fourth inning."
By Harry Smith