Saturday, February 26, 2011
Put Them In Jail
And I want my money back too. I am, of course, talking about the banksters. I have now finished reading The Big Short, in addition to All the Devils Are Here. I am angry. And I believe, once they understand what happened, the rest of America will be too.
One thing you need to understand, right up front, is that -- no matter what you hear -- poor people didn’t cause this. It’s a ludicrous thought but one that Wall Street would love to sell you (just like they did sub-prime mortgages.) Poor people don’t understand money. That’s why they’re poor. Rich people do understand money. That’s why they’re rich. Rich people get to be rich by taking money from poor people. And that is exactly what happened in this case. Wall Street just took the rest of us along for the ride too.
Sub-prime mortgages were designed for people that could not afford to buy a house under the rules we used at the time. Let me belabor my point -- they were designed for (relatively) poor people by rich people. Once Wall Street figured out how to “securitize” these mortgages, they couldn’t get enough of them. That’s when the entire industry started bending and breaking the rules. The mortgages were no longer the focus. The focus became how much money you could make on turning the mortgages into bonds. Wall Street needed more mortgages to turn into bonds and they didn’t care where they came from or how risky they were.
Nobody cared about the risk. That’s the point. They were all making too much money to care.
It takes a book to explain how the industry got from point A (sub-prime mortgages) to point Z (synthetic CDOs.) If you want to understand the process (and I hope you do) either one of these books would be a great place to start. Just don’t make the mistake of thinking you will understand the products Wall Street was selling. That was the point of the product (CDOs), they were so complex that nobody really understood them. But as long as the rating agencies would rate them “triple A” (and Wall Street was paying the agencies to rate them triple A), your pension/401k fund manager would buy them. After all, the rating agencies had to understand them to rate them “triple A”, right? Well, as it turns out, no. But the rating agencies did understand that Wall Street was making them rich as long as they kept rating the CDOs “triple A”.
I’ve already provided you with plenty of quotes from All the Devils Are Here. Here are a few quotes from The Big Short.
”How do you make poor people feel wealthy when wages are stagnant? You give them cheap loans.”
””They were making loans to lower-income people at a teaser rate when they knew they couldn’t afford to pay the go-to rate, said Eisman. “They were doing it so that when the borrowers get to the end of the teaser rate period, they’d have to refinance, so the lenders can make more money off them.””
”One of Bear Stearns CDO guys, after Charlie asked him what was likely to happen to these CDOs in seven years, said, “Seven years? I don’t care about seven years. I just need it to last for another two.””
”The CEOs of every major Wall Street firm were also on the wrong end of the gamble. All of them, without exception, either ran their corporations into bankruptcy or were saved from bankruptcy by the United States government. They all got rich too.”
Not only did they gamble your money away, they were paid off with your tax money. Think on that for just a second. You might not think they got any of your money but they did. If nothing else, they cost the pension funds of the world billions (if not trillions) of dollars. That shoe hasn’t really dropped yet. The money you pay your State (in taxes) that gets put into a pension fund for State workers was invested with these crooks. Ditto for German auto workers. Or Japanese farmers. They robbed the world. And then, when the whole scheme collapsed, the CEOs collected their salaries. But their companies were bankrupt. There was no money left. The only money they could have been paid with was with your tax money.
Put all this is the context of today’s events. They took your pension money. They destroyed the value of your house (if you still own one.) They may have cost you your job (if you got laid off.) And then they took your tax money too. It has cost us trillions to keep the financial system afloat. And now -- now that tax revenues have fallen with the economy they ruined -- they’re trying to tell you that a teacher’s pension plan is the reason your State is broke. The reason the pension plan is a problem is that Wall Street stole the money out of it.
I say put them all in jail -- where they belong. I want my money back too. And I know just how to get it. (I say make it 91% again, Professor.)
What do you think the chances are that any of them will go to jail? (Be sure to note that the article is by Joe Nocerna -- one of the co-authors of All the Devils Are Here.)
You need to read one or both of these books. Then you need to start demanding justice from your government.
February 26, 2011