Naked short selling brought down Bear Stearns and Lehman Bros. Naked short selling is illegal. Oops, down the memory hole. I guess that's what you get for paying millions to the President's economic advisor.
Being f.....d as the saying goes assumes that there is nothing you can do about something. But that is wrong. We are not talking about evading regulation and laws we are talking about fraud, felony fraud and conspiracy to commit fraud by our largest financial institutions. There should be grand juries convened and indictments, trials and prison terms to follow.
First of all, a collaterized debt obligation is not secured or backed by collateral at all. A mortgage backed security is not backed by mortgage like protections under the law. A CDO is not backed by anything as a consumer loan is under the uniform commercial code, these are the initial two falsehoods or frauds from which the edifice of off balance sheet accounting arose.
How then did they get off balance sheet to permit more overly leveraged lending by the investment bankers? Easy, the big five got Greenberg to find a patsy at AIG to market credit default swaps. These illegal insurance devices were backed by nothing. AIG was the victim really of an investment bank ponzi scheme.
Yes AIG actions were criminal felonies in every case but the conspiracy emerged from the investment banks. Greenberg and his flunky should be in front of a grand jury. This isn't a crank opinion. READ THIS:
http://market-ticker.org/archives/923-FLASH-AIG-CA...FLASH: AIG CALLED CRIMINAL SCAM!The Market TickerThursday, April 2. 2009Posted by Karl Denninger at 08:55
FLASH: AIG CALLED CRIMINAL SCAM!(Credit Barry Ritholtz and Institutional Risk Analytics, the original source)
"WHOAH!
In fact, our investigation suggests that by the time AIG had entered the CDS fray in a serious way more than five years ago, the firm was already doomed. No longer able to prop up its earnings using reinsurance because of growing scrutiny from state insurance regulators and federal law enforcement agencies, AIG’s foray into CDS was really the grand finale. AIG was a Ponzi scheme plain and simple, yet the Obama Administration still thinks of AIG as a real company that simply took excessive risks. No, to us what the fraud Bernard Madoff is to individual investors, AIG is to the global financial community.
As with the phony reinsurance contracts that AIG and other insurers wrote for decades, when AIG wrote hundreds of billions of dollars in CDS contracts, neither AIG nor the counterparties believed that the CDS would ever be paid. Indeed, one source with personal knowledge of the matter suggests that there may be emails and actual side letters between AIG and its counterparties that could prove conclusively that AIG never intended to pay out on any of its CDS contracts.
Read that folks.
Then read it again.
Then read it AGAIN.
...."
go to the link above to read more.