Danny Schechter - ColdType

CHAPTER 11
cOuNT TwO:
wAll sTrEET cOMpliciTY
91
The second level of the crime: The biggest banks and
investment houses on Wall Street bought and then securitized
loans as “structured financial products” and had
them falsely rated as more valuable then they were.
Economist Max Wolff explained Wall Street’s role, when
I filmed him outside the ever shrinking New York Stock
Exchange. (The Exchange had five trading rooms at the height
of the boom; now it is down to two handling only 30% of the
stocks that are traded.)
“What Wall Street did was package, sell, repackage and
resell mortgages making what was a small housing bubble, a
gigantic housing bubble and making what became an American
financial problem very much a global financial problem.
These mortgage bundles would be sold world wide without
full disclosure of the lack of underlying assets or risks.
The Banks that bought these derivative products failed to do
due diligence relying on ratings agencies that overvalued their
worth and accounting firms that did not do their job. The
whole process was corrupt at its core.”
I questioned Wolff about Wall Street’s role, “firms securitized.
They bought securitizes based on mortgages that had no
assets behind them. They must have known what they were
doing.” His response, “Sure there was more than a little bit of
fraud and there is more than enough blame to go around.”
An insider in the industry, Janet Tavakoli, president of Chicago-based
Tavakoli Structured Finance, a consulting firm for
institutions, banks and institutional investors on derivatives
wrote on CNN.com: