In a coffee shop a lady asked to borrow my copy of the International Herald Tribune. A few minutes later she handed it back to me.
"That one article really makes me mad" she confessed. "The one about the banks."
I found out her name was Sally and she was from Seattle. Sally explained her frustration to me.
"Three years ago I gave clear instructions to my broker: do not invest in any of these institutions doing sub-prime loans.* It doesn't make any sense. How can you loan money out below the interest rate and call that a real business?"
"But your broker bought the stocks anyway," I interjected. She was pacing back and forth across the coffee shop.
"No. My problem is that the banks bought the stocks of those businesses making sub-prime loans."
"And you own bank stocks" I said.
She nodded. Although US banking rules had prohibited US banks from loaning sub-prime, nothing had stopped the banks from investing in companies that made sub-prime loans.
*I previously blogged about the sub-prime crisis here.