Sub-Prime Securitization Hits Main Street

Up to this point the victims of the sub-prime fiasco have been somewhat culpable in their own destiny. For example, there are those who borrowed money with terms that would ultimately come back to haunt them -- and who did so to get funds they otherwise couldn't have borrowed. While its impact is horrific, there is a tiny iota of justice in the scenario. After all, if it looks too good to be true....

Another set of victims were big funds and their investors, those that have primarily institutional backing. Investors like those should have done proper due diligence and learned how risky a foundation the funds were built upon. Again, the victims are not blameless.

But a new set of victims is emerging, and these are truly without blame or responsibility. Elderly people, hoping to preserve or modestly grow their nest eggs were counseled by their advisers to invest in "conservative" funds. The advisers in question? Morgan Keegan, the Memphis brokers.

Now, those funds have lost up to 86% of value, depleting nest eggs and the life savings of those who can never recover because they simply won't live that long. Sadly, many of the victims reside in my own state, Florida, and some live within miles of my own mother. Who should have protected these people? Their adviser for a start; that is, the very people who led them to this financial slaughter. Have we come to the point where we need to hire forensic accountants to second guess the recommendations of our financial planners? Who can we trust both to have done his homework, and to tell us the truth about what they found out? Perhaps we have entered the age of Caveat Emptor run amok -- a scenario in which no one can be trusted -- not even those who's very job description is "trustworthy and wise adviser". In a world like this, one would not entrust a confession to a priest.