Web of Fraud

Let’s bring the economic crises up to date with facts rather than the B.S. spread by the mainstream media. According to one report foreclosures are up 23% over last year. That may very well be, however, the actual foreclosures are low compared to the number of delinquencies. And there is a reason for that. The banks have a new gimmick. They are not foreclosing. Why? Because once they do that they have to report the loss. So the banks have dishonestly changed the accounting rules and got Congress to cooperate. Now in order to pay the huge bonuses ($700,000 per employee) coming up at the end of the year, the bank must show huge profits. If your losses are less, your profits are more and as a result your bonuses go through the roof. This may be temporarily beneficial to the delinquent borrower since he can stay a little bit longer in his home but come the first quarter of the new year, his furniture may be on the sidewalk. Besides this is taxpayer money being paid out by the bushel. So what we have here is a “web of fraud.” As long as it lasts the banks are getting fat at the trough.

Another gimmick that banks pulled involved the appraisers. If the lender did not like the appraisal that came in he would fire the appraiser. If the appraisal was not high enough, out he went. According to a survey done in 2007, 90% of the appraisers reported intimidation by the lender to increase appraisals. So it was the lenders who were committing widespread fraud not the borrowers. There is only one reason to “inflate appraisals” and that is to commit fraud, according to a former bank regulator. Also white collar criminologists state that the lender is responsible for 80% of “mortgage fraud losses”.

The financial sector of our economy is so large it acts as a parasite. It wastes a huge portion of the national income. It produces no products or services useful to the economy. It acts only as a gambling casino for the benefit of Wall St. And what is even worse, this parasitic financial sector produced a criminal environment that resulted in a destructive mortgage “bubble”. Until we can regulate the Wall St. scam, fraud and corruption will continue. In that case we will be headed for another “bubble.” Keep in mind that Wall St. plays a zero sum game. If someone profits, someone else has to lose. There is no contribution to the economy. It does not create goods and services. It is just outright gambling for large stakes.

However, as one observer commented, “it’s never just a game when you are winning”.


References:

George Carlin
Democracy Now: William Black
New Deal 2.0