Jim Sinclair of MineSet.com reports that James Galbraith, author of The Geithner Plan Won’t Work, was on Bloomberg TV this morning and noted the mortgage collateral fraud that I have been warning about for many years.
“Galbraith alluded to a fractional reserve approach towards mortgage securitization by intent of error whereby the same mortgages were securitized more than one time.”
What this means is that the bank portfolios are full of mortgages for which there is no real house. So toxic assets is a misnomer. Yes, there is toxicity. However, there are no real assets. There are, however, civil and criminal liabilities. Which means that if these toxic assets were auctioned off in an open process, the price would be set by how much the people with civil and criminal liability would pay to buy back the files to protect themselves.
But, wait, is this why the Federal Reserve, Congress and the Treasury are funding bailouts? Are the liable parties simply using borrowed money to have all the documents destroyed?
Of course they are! AND They will never be held to account.
Trillions you say; but who will pay……. or can We pay by pushing Catherine’s RED BUTTON??
brgds
rene
Catherine et al – have you seen this on the Khan academy – quick 12 minute easy to follow explanation of Geithners’ bailout plan plus towards the end a plausable explanation as to how wall street might use this mechanism as a bait and switch with US taxpayers money
http://www.youtube.com/watch?v=n-arbfLTCtI&feature=channel_page
Catherine,
I came accross your blog via Max Keiser’s.
Can you point me in the right direction to get a sense of the value of phantom CDOs/MBSs
Thanks
DITTO!!!!! Whoever believes that this manouver is on the level…well…I have some securitized AAA rated leveraged CDO’s I’ll sell you and you can even determine the value that I’ll eventually repay for them too??!! ( using taxpayer dollars of course ) over and over again. Furhermore, I’ll have the FED contribute and also leverage 20:1 to boot!!! And if that wasn’t enough I’ll even take out a CDS to guarantee the loss…..just incase there is one…Who on earth really believes any of this needs needs a trip to outer space to get his bearings…AS a refresher to the language of a timegone by: “I have a bridge in BrooklynI’ll sell you” and the phrase: “Ponzi Scheme” have been replaced by the new dynamic by the Masters of the Universe to give new meaning to the phrase: “boy was he duped!!!!” and though the brdge episode brings one back to a more gentler time even if it was known as the GREAT DEPRESSION…Waiting on the fireworks in London on April 2nd…should be a doozy…There was a reason that Hank Paulson flipped the script when his October surprise was passed and reversed course; and instead of a TOXIC ASSET sell off gave the major players a $125b bailout in the WH….The citizens will revolt…As i noted in early October 2008, it will take 20 years of $1tr per week to writedown all the derivatives written..and that seems like the plan so far….Since no one has been willing to call the Bush Criminal Crime Family to the carpet for their HIGH CRIMES AND MISDEMEANORS why expect anything different from the current administration concerning the FINANCIAL DEBACLE now???????? We are witnessing the greatest heist and hijacking in written history…they can’t stop now…thank you Catherine for being so undertanding for all these years….once burned, twice shy….
Newby:
For my various comments on why I believe that there is significant collateral fraud behind the CDOs/MBSs, see:
http://www.dunwalke.com
http://www.whereisthemoney.org/S00223_collateral.htm
http://whereisthemoney.org/collateral_II.htm
http://www.dunwalke.com/gideon/q301.pdf
http://solari.com/news/announcements/08-07-07/
http://solari.com/archive/housing_bill/
http://solari.com/archive/missing_money/
http://solari.com/archive/freddie-fannie-penny-stocks/
The only way to price something is with accurate data. Once you have the accurate data about cash flows and collateral values, you need two additional things. You need the people who rent or own the collateral to have income and you need the rule of law. If a country has no income and no law, then the value is $0. And if the collateral is non-existent, the value is $0 as well.
So one way or the other, we appear to be well on our way to creating values of $0, if we were not already there.
Hope these are useful,
Catherine