How the Wall Street Probes Implicate Main Street

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The Wall Street community knows a money printing opportunity when it comes their way. They disintermediated loan origination by letting banks offload loads into CDO's. Then recognizing the number of bad loans they took out swaps CDS's. How do you take triple A, through B credit and bundle it to become AAA? Simple, you wrap it with an insurance policy through AIG. Now the average for 3+2+1 = 3 or AAA ratings. Everyone makes money with the Ponzi scheme. The appraisers know no one is looking at the loan/property values; the banks can offload as many bad loans as they can write and sell them to Wall Street; the investment houses can bundle loans of any credit quality and get a AAA rating and AIG and other insurers can charge for insurance without maintaining anywhere near what they need to deal with defaults. Investment houses make billions in fee's pay out fat bonuses and when it comes crashing down they say "Government help us !! We have this so convoluted we don't even know where the losses are, or how much the toxic assets are worth but you bail us out". The corporations then lay off workers and push them to the government for unemployment issurance and brag about productivity improvements by working current staff 10-20% harder. Now let's complain about the DEFICIT because someone has to pay for this mess, but we don't want to have corporate taxes increased so we turn the deficit we created into a White House problem. Then the pundit/puppets talk about how big the deficit is growing. Perfect, corporate America just turned the problem they created into a scare tactic (Greece-Deficit-Future Generations) that makes it someone else's problem. Not the shoddy underwriting, lack of tranparency, poor financial judgement of corporate America or Wall Street. This death spiral just keeps turning down!!!

Joe of CO 3:33PM May 17, 2010

Rick, Come on give it up. Your working for Goldman Sac right ?
It had to be Goldman who stopped Spitzer using the Federal Government when he tried to use State of New York Consumer Protection Laws to kick the Sub Prime Lenders out of New York.
Spitzer was amazed that the Federal Government took the State of New York to court to keep the Sub Prime Lenders open for business in New York.
Only the big banks would profit from this !!!!!

James Wilson of TN 8:30AM May 17, 2010

Rick, Are you trying to cover up the deeds of the Property Appraisers ?
When the , often in house, property appraisers over valued the homes by an average of 30% this made the buyers of the homes look as if they had Instant Equity in the homes.
On paper this made the loan bundles look great for investors. But if the paper work had shown that the homes values were 30% less and the new owner had Zero Equity in the homes no one would have touched these investment vechiles.
When the Property Appraiser Over Valued the homes for a fee or bonus for the lender that was Collusion and doing it 3 times or more breaks the RICO Act as operation of a Criminal Enterprize !
I know this how ? I treid to use a Country Wide appraisal to bargin with my bank for a lower rate. The more that lady talked the more she told on the whole criminal enterprize. The Country Wide Appraiser here had moved from Fla just to work for Country Wide and talked about how much money she was gonna make here to carry vack to Fla.
Needless to say it was all me and the bank personnel could do to keep from laughing when I showed her the Country Wide appraisal. Of course I know property values, but the first time home buyer would have not know this.

James Wilson of TN 8:23AM May 17, 2010

By the sound of the first two comments I guess Rick's article is pretty right on.

Dave Holly of WI 7:05AM May 17, 2010

Did I get this right? Main Street consumers are to blame? Seems to me that we've been over this at the beginning of the recession that was blamed on "poor" people getting "no-document" sub-prime loans that they shouldn't have been "allowed" to qualify for in the first place. How is a consumer liable/blamable for a loan that a big corporation hands them (which they are paying through the nose for)? Qui bono? Or, follow the money. It's gone OUT of the pockets of the consumers and US taxpayers and INTO the pockets of the large banks, Wall Street, et.al. Give me a break and stop blaming the victim. You are a big bully, Rick Newman, just like Wall Streat and the Bankers. Keep on bellying up to the bar, boys, until you've killed off the last consumer standing to pay you your profits! If we lived beyond our means, it was because it benefitted all business in the US to make sure that we kept on spending! I catch your point, sadly, but I don't see the profit in your finger pointing now. We have a recession to fix, and since we all live in the same economy we'll all suffer together too. Oh, and I'll just get back to work instead of reading any more articles that blame me for being greedy as well as ignorant. You're on your own from now on, Rick.

Beth Bennett of GA 3:22PM May 14, 2010

OK, we're all guilty, right! Except some are more guilty than others because some of us had more money and power than others, and knew what was going on. That's the big difference. Now go back to your masters and collect some more money.

Christopher Hobe Morrison of NY 2:45PM May 14, 2010