You probably didn't know how bad it was. Check this out..

The money quote:

The investment banker only had to use half of the money from the investor to fund the mortgages necessary to get the five per cent that the investor was looking for.

http://livinglies.wordpress.com/2011/09/....

Holy ****. The fraud and deception just keeps getting deeper.

That dovetails with something I was reading yesterday. BRB...

http://www.creditwritedowns.com/2011/09/....

The author's point is these bastards thought they could get away with it because they looked at as tail risk, when the reality was that all these bad loans were the fat part of the curve.

A banker charging a ysp on the back end when they securitize, that is 1000x larger than the front end ysp they ripped off of each consumer?

No way, the economy/currency/realestate crashed because granny was greedy and didn't pay her mortgage. (sarc)

Good post Boz. Some people "get it", but the essence of a con job is the "mark" never knows they've been hit. Most Americans have no clue what these bastards did, and how they did it.

Quote:

The author's point is these bastards thought they could get away with it because they looked at as tail risk,

To clarify what the author, Bill Black, was saying, in case it isn't clear at this point. When the loans were securitized, the banks knew the loans were bad and would end up in large numbers of default, that it was NOT a tail risk event that would cause them to blow up. A tail risk is a low probability but high consequence event, e.g. insuring the Gulf Coast against a category 5 hurricane. Highly unlikely but major catastrophe if it happens. With these MBS it was known with a high degree of certainty by the securitizers that the MBS would have high default rates on a short time frame. That is what makes it control fraud. An "honest" lender would never write loans they knew were bad, an honest lender makes money off the payments on debt and incur large losses with defaults. Proceeds from control fraud is used to fund excessively large executive pay and bonuses, and thus is a perverse incentive to reward more of the same.

How it has been presented to the public however is that it was a problem of tail risk. The fiction is "who would have ever dreamed this would have happened, nobody could have foreseen". Bull****. And that is where the FHFA lawsuit is lacking, along with all the other government lawsuits, the failure to address the control fraud. The lack of criminal charges, too. And the only difference between civil fraud and criminal fraud (besides who can prosecute and prison terms) is that criminal fraud requires a higher standard of proof (beyond reasonable doubt vs. preponderance of evidence).

Big: Exactly.