Thread: The Mother Of All Rip-Offs

The Mother Of All Rip-Offs

By Mike Whitney
2-13-8
Low interest credit and "financial innovation" are a deadly-combo. They've knocked the banking system for a loop, clogged the credit markets with billions of dollars of subprime sludge, and left the real estate market sprawling on the canvas. Still---even though $2 trillion of capitalization has been wiped-out from falling home prices; and even though the financial system is in a terminal state of paralysis---no one has been held accountable. In fact, not one trader, mortgage lender, rating's-agency official, fund manager, or investment banker has been indicted or charged with criminal wrongdoing.

NOT ONE. The system operates without rules or guard rails. It's the Wild West!

The system is so thoroughly marinated in corruption, that every trace of regulatory-oversight has been removed. The SEC is little more than a public relations sham loaded with business-friendly sycophants who try to sustain the publics confidence while kow-towing to their corporate paymasters. It's a complete hoax. Last week, the Chairman of the SEC, Christopher Cox, gave a speech at the Ronald Reagan Building. He said:

"We've already launched an initiative in this area to investigate possible fraud or breaches of fiduciary duty involving collateralized debt obligations. Among the issues confronting us this year will be determining whether bank holding companies and securities firms made proper disclosure in their filings and public statements of what they knew about their CDO portfolios and their valuations. We'll determine whether brokers carefully followed suitability requirements when they sold complex debt-related derivatives that shortly afterward went bad. And in this area, as elsewhere, we'll be investigating whether unscrupulous insiders used non-public information to bail out of these securities or to sell them short, in violation of the securities laws."

Huh? So, after 6 years of sitting on the sidelines watching the fat-cat investment banks and hedge funds sell dodgy securities, (comprised of mortgages from unemployed thrift-store workers with bad credit) Cox has finally decided to "to investigate possible fraud or breaches of fiduciary duty."

What a joke. Trillions of dollars have been lost, the financial system is reeling, and the nation is headed into recession. We want scalps---not excuses!

Did Cox know that the CDOs, the MBSs, the ABCP and the rest of the alphabet soup of "structured investments" were unalloyed garbage?

Yes, of course, he did. Everyone knew. But they were making so much money selling snake oil to credulous investors they couldn't help themselves. They went ape. Two week's ago TV investment guru, Jim Cramer, even admitted that he and his business buddies used to call the investors who bought these sketchy "debt pools" "morons" and Bozos". That says it all, doesn't it?

Does Cox expect us to believe that he and his Keystone Cops at the SEC didn't know what was going on?

Bullshoes!

Here's a video clip from the Daily Show with Jon Stewart with CNN's personal finance editor, Gerri Willis. Willis explains in simple terms how the subprime fiasco evolved. She acknowledges that the loans were made to "people who really couldn't afford to pay them off" and that when "Wall Street saw how successful they were, they decided to sell them as investments all around the world". Good thinking, eh? She even admits that the sellers knew that the investments were rotten but duped their customers by saying "Trust us" . Unfortunately, the naive investors found out later that "they were sold swampland in Texas".

Watch the whole video at: http://www.thedailyshow.com/video/index ... rri-willis

http://www.rense.com/general80/mother.htm

Warren Buffet talked about these derivitives, err....3, 4, yrs ago or so. He said to the effect (cannot remember his quote) That derivitives were akin to instruements of financial suicide for Wall Street.

Wonder what all of the thieves will do with all of that money? I did not realize we had so many politicians for sale this election cycle.

Just imagine........Sotheby's auction house, room filled with delectable cigar aroma, lights on low, a light and soothing operatic melody playing in the background,.........then the auctioneer, "Gentlemen, Gentelmen, please, please can I have an opening bid for any of these fine canidates?" "We have your privaledge tonight, to offer Mr. Obama, Mrs. Hillary Clinton, or if you gentelmen wish, hmm,... Mr. John McCain. All of the houses offerings have a guarreentee of satisfaction for four full years!" The room explodes with applause and hand wringing. "Opening bid please." "Gentlemen, please, donot be modest, surely this is not the first politician that you have had in your pockets......hmmmm." Light laughter fills the room, followed by a bid, "10 M for Hillary IF she will join me in the Lincoln Room." Polite chuckles, then, "12 M,....same terms..... ofcourse." More light laughter with a hauty tone. "Gentelmen" cries the auctioneer, "Yes...indeed she is an accomodating lady, ... I am quite sure. But Gentelmen,.... I am quite certain that Mrs. Hillary Rodham Clinton is worthy of more,......is she not?"

Would'nt ya like to be a fly on the wall in that room!

Hey, thats how the Mexican government works too!