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Lumifer comments on Earning to Give vs. Altruistic Career Choice Revisited - Less Wrong
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This is not true. In fact, this is probably not even wrong...
Its at least somewhat true, if perhaps not well stated- packaged mortgages and derivatives based on packaged mortgages (mortgages sold as investment vehicles to other banks and funds) played a very large role in the crisis.
Without "selling mortgages to other banks" the popping of the housing bubble wouldn't have turned into the liquidity crunch that started in 2008.
So were mortgages by themselves. Without the widespread availability of mortgages "the popping of the housing bubble wouldn't have turned into the liquidity crunch" too. Or, for that matter, without the fact that the "standard" mortgage is a 30-year fixed -- not, say, a 1/1 ARM.
But anyway, the reason for the contagion from mortgages to liquidity wasn't the ability to sell mortgages. It was the mispricing of mortgage derivatives, specifically the widespread belief that certain tranches of collateralized mortgage obligations (CMOs) were effectively risk-free.
If you want to dig deeper, the real cause was the global asset bubble helped by the too-loose monetary policy in the mid-2000s.
Financial economics are complicated. Snap judgements from popular press rarely have much relationship to reality.
Well, sure. And also without houses themselves...
My point is that the statement wasn't false on its face. Repackaging and reselling was A proximate cause of the liquidity crunch, its not the only cause but its a part of what happened.