Danny Schechter - ColdType

CHAPTER 9
THE VicTiMs ArE
EVErYwHErE
83
The victims of financial crimes and predatory practices are
everywhere. Nassim Nicholas Taleb, a professor of risk
engineering at New York University Polytechnic Institute,
explains: “We have just witnessed a similar phenomenon
in the financial markets. A crime has been committed. Yes, we
insist, a crime. There is a victim (the helpless retirees, taxpayers
funding losses, perhaps even capitalism and free society).
There were plenty of bystanders. And there was a robbery
(overcompensated bankers who got fat bonuses hiding risks;
overpaid quantitative risk managers selling patently bogus
methods).”
Millions of families were hurt by taking on dubious subprime
loans. Yet, the big money was not made there according
to former Wall Street banker Nomi Prins. She identified
a more insidious culprit: leveraging: “The biggest crime in all
of this is the thing that’s the least able to be understood and
examined.
“The tiny, tiny lowest layer of the crisis that started with
subprime defaulting at the homeowner-borrower level which
is being examined now to see if mortgages had been frauds or
if mortgagors did the right practices whether predatory loans
were used – all that stuff is important to know and important
to examine and important to investigate. The money wasn’t
made there.
“The money was made because several layers up a pyramid,
Wall Street investment firms and commercial bank investment
groups decided to repackage those mortgages, create layers
of them, that they then resold to investors. They borrowed
against those layers, which is the real crime. They would take