Angelo Mozilo is a moron

Geez, you only have to get about two minutes into this video from Bloomberg before you realize how screwed up the housing and credit markets really are as the head of the nation's largest mortgage lender explains the cause of the current problems.

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Following the group therapy session hosted by the Treasury Department where more details of the "Subprime Rate Freeze" were hammered out, Angelo Mozilo was asked by moderator Maria Bartiromo where we are in the current housing cycle.

I don't know where we are in the cycle. I wish I did. But I think we're dealing primarily with the results - and I think all these (Treasury Department) initiatives are very important to avoid foreclosures - but I think we're clearly dealing with the results and not with the cause.

Nobody's addressing the cause and that's what has to be addressed ultimately and that's the fact that values of homes continue to go down and as they go down, the problem gets exacerbated. And until we stop that cycle, we'll continuously be dealing with this break in the damn. And the cause in the deterioration of values is the lack of liquidity.

Honestly, say what you want about what can or should be done at this point, but don't insult the audience's intelligence by talking about falling home prices being the cause of the current housing and mortgage mess.

Home prices in many parts of the country are still at levels that only make sense when you are in the middle of a speculative bubble and we are clearly past that point, now dealing with the aftermath of one of the largest speculative bubbles the world has ever seen.

Falling home prices as the cause?

Geez!