Human beings are nothing if not predictable. Especially when the greed of large commissions are motivating. A story today in the Washington Post highlights that the same old characteristics have been running rampant in the mortgage business of the past few years as have accompanied other similar manias and cash grabs throughout market history.
“But salespeople worked on commission–meaning the more loans they sold, the more bonus money they received. “That's a bad business model. Its absolutely contradictory.”
My thought: of course the conflicts are staggering, but the whole financial sales business works this way. Governments and regulators continue to be willfully blind as they dance on the arm of the sales firms. More fallout to follow.