AlterNet: How Wall Street's Scam Artists Turned Home Mortgages Into Economic WMDs

[marmar]

How Wall Street's Scam Artists Turned Home Mortgages Into Economic WMDs

By Joshua Holland, AlterNet. Posted October 18, 2008.

The titans of high finance are trying desperately to shift blame for the crisis onto others, but this dead cat lies squarely on their doorstep.



If the ABCs of the financial meltdown leave your head spinning -- if "default swaps" and "collateralized debt obligations" and "high-rated tranches" are all just so much gobbledygook -- don't worry. You're not alone.

The alphabet soup of exotic investments that represent the immediate cause of the banking mess is so complex that many of those "innovative" financiers responsible for bringing the global economy to the brink of collapse are now making a fortune in consulting fees explaining just what the hell it is that they created. According to the Financial Times, Robert Reoch, the London banker who may be responsible for creating the first of the now-infamous debt-based securities, is now "swamped by investors who want to extricate themselves from derivatives-linked messes, or simply to understand the products that came out of the past few years of intense financial innovation." The Washington Post reported that Joe Cassano, the financial products manager "whose complex investments led to (AIG's) near collapse," is raking in $1 million per month in consulting fees from the ailing financial giant to help sort out the toxic sludge on (and off) the bank's books.

But despite the dense jargon, it's important to get a handle on this stuff. The global economy is at risk of a crash that would cause intense pain among millions of ordinary people, and not because of a few million homeowners overextending themselves, but rather as a result of a small number of savvy wheeler-dealers rigging an unregulated investment market in such a way that they'd always win no matter who else lost.

This is a story that's easily lost in the mumbo-jumbo of market-speak, and the investment banking community -- and its political allies -- have been working feverishly to shift the blame for the mess onto the poor and people of color, Fannie Mae and Freddie Mac -- the large government-backed lenders -- community groups, "Congressional liberals" and even gay people.

Those charges don't even rise to the level of an argument, but that only becomes clear when you have a grasp of what all these "toxic" securities that everyone's talking about really are. .....(more)

The complete piece is at: http://www.alternet.org/workplace/103514/how_wall_street%27s_scam_artists_turned_home_mortgages_into_economic_wmds/

[gopbuster]

1. Nothing is sacred with these people. For them to have tethered

America's homes to these financial trading instruments is an abomination. Then to have destroyed Americas credibility by having spread these things across the world and not properly disclosing the risk is what could almost amount to treason.

Had they really, legitimately wanted every person to own a home in America they could have issued a stimulus package for those who qualified to be used as a healthy down payment and then worked a government backed low interest long term loan. But no, this whole thing was meant to increase the wealth for the ones in the greedy unregulated upper echelon financial elite on the backs of our mortgages.

Whether it was just stupid or by design is yet to be seen. Some believe it is by design to force collapse, further consolidate the wealth and buy up assets for pennies on the dollar on down the road.

This may very well end up destroying the dollar as the reserve currency and usher in a new more global currency. Whether it will be separate from the dollar and we keep the dollar is yet to be seen. We may be seeing the beginning of the 4 large financial institutions jockeying for position, gobbling up everything they can as we go (deteriorate) to position themselves in the next great fascist state structure in total control.

They may have created the Abomination of Desolation

Who knows, but it stinks to high Heaven.

[Karenina]

2. Excellent!

:kick: