Danny Schechter - ColdType

xx
lies losing their homes. After all, this is a mass crisis, not a
mere problem. Also, a large proportion of those targeted were
people of color. Their lives have been handcuffed, not just their
wrists. Even worse are reports that foreclosures are rising, and
now impacting commercial real estate, despite all the talk of
economic recovery. This is not a problem amenable to resolution
over a beer.
Sadly, the explainer-in-chief did not elaborate, did not
remind the country that Wall Street firms made billions of dollars
securitizing these loans, and then restructured them into
exotic products with misrepresented values.
After financing rip-offs of homebuyers, they ripped off investors
by selling their infected “tranches” and “bundles” worldwide.
The President did not refer to FBI investigations that
called mortgage fraud “an epidemic.” He also did not announce
any plans to prosecute those financing the frauds. So far, some
small fish have been caught but the big ones have swum away.
According to economist James Kwak, for banks, “there is no
contradiction between fleecing customers and making lots of
profits (which is what makes you safe and sound).
(a) Originate bad loans;
(b) Pocket fees;
(c) Sell bad loans to an investment bank for distribution;
(d) Repeat.
What threatened to bring down banks was the fact that
they held on to too much of the risk of those loans, either on
their balance sheets or in their off-balance-sheet entities.”
There was no follow-up on this far more explosive subject
at the press event, just as there was none in the endless media
coverage that followed. Is it that they don’t know, or don’t
want to know?
Yet the facts here are well known, writes investigative
reporter Greg Palast: