Interesting discussion.
(OP, lightly edited...)
How did the Wall Street banks buy up junk mortgages, package them into securities, and sell these to conservative investors, municipalities and pension funds around the world? The millennial fraud of the real estate bubble caused the financial crash and the new depression, but the bankers didn't care, because that was a condition of their plunder. The ones whose institutions failed still made awe-inspiring fortunes. The banks that survived - entirely thanks to a forced transfer of trillions of dollars of wealth from the people to their coffers - are now bigger and more powerful, and control a larger share of the financial market. From their perspective, the results so far are splendid. And very much as intended: the rich are richer, and fewer, and that is good.
This successful global confidence game would have been impossible without the "confidence," and that was provided by the ratings agencies. Their activity was at the heart of the fraud. They took payment from the banks who issued the securities, their clients. The auditors didn't bother to examine closely the securities - in many cases they could not have understood them if they tried - and dutifully placed the magic stamp on the upper “tranches”: an AAA rating.
Most institutional investors also did not understand these securities and normally would have considered them too risky to buy. They would have been scared off by a junk rating. But they bought the fraudulent MBS and CDO papers because of AAA ratings. They thought that meant a sure thing. They trusted the supposedly independent auditors.
Moody’s & Co. made the fraud possible on this scale. Without them, the securities-driven real estate bubble could never have got that big. The meltdown would not have been as dramatic. The depression might not be happening.
But the gangsters who came away with the epic booty would have had to make do with fewer billions in swag, and this was intolerable to them.
The major ratings agencies, like the Wall Street banks, are criminal organizations. Every time you hear someone from Moody's or Standard and Poor on the radio, you should know that a Tony Soprano would have greater legitimacy to speak, except a Tony Soprano would never be asked on the radio to talk about the state of “the economy,” or the need to cut social “entitlements.” He’d only be allowed to talk about his court cases.
Worse than merely criminal, these organizations have been rewarded for crime. They have prospered. They fear no punishment. Everything tells them that crime pays. They have been given every incentive to continue helping their clients steal anything that isn't bolted to a rock. And the rock, too.
Worst of all, these criminal organizations are committed by faith and by corporate charter to the doctrine of class war as practiced by the "vile maxim of the masters of mankind," as ADAM SMITH himself called profiteers in The Wealth of Nations.
They should have been shut down and their records should have been seized for a wide-ranging criminal investigation. That is what happened with Arthur Andersen when Enron met its revelation.
Instead, the killers have been re-armed and let loose to kill again.
And now the financial terrorists are plotting ever more ambitious attacks on the civilized world:
http://www.nytimes.com/2010/03/16/busin ... ng.html?hp
Credit Agency Warns U.S. and Others of Risk to Top Rating
By DAVID JOLLY
Published: March 15, 2010
PARIS — Major Western economies have moved “substantially” closer to losing their top-notch credit ratings, with the United States and Britain under the most pressure, Moody’s Investors Service said Monday in a reminder that the global debt crisis is not limited to the small or weak. The ratings of the Aaa governments — which also include Germany, France, Spain and the Nordic countries — are currently “stable,” Moody’s analysts wrote in the report. But, it added, “their ‘distance-to-downgrade’ has in all cases substantially diminished.”
“Growth alone will not resolve an increasingly complicated debt equation,” Moody’s said. “Preserving debt affordability” — the ratio of interest payments to government revenue — “at levels consistent with Aaa ratings will invariably require fiscal adjustments of a magnitude that, in some cases, will test social cohesion.”
That difficulty has been well-illustrated recently in Greece and Portugal, with strikes and protests as citizens hit the streets to oppose tough austerity measures that directly reduce entitlements and state benefits. “It was to be expected that attention wouldn’t long be restricted to Southern Europe but would shift to other countries with big debts,” Michael Heise, chief economist for the German insurer Allianz in Munich, said.
The United States, Britain, France and Germany have always been rated triple-A by Moody’s, with the United States first rated in 1949. Pierre Cailleteau, managing director of sovereign risk at Moody’s, stressed that none of their ratings were “threatened so far.” But he did differentiate among the top countries, noting that Britain and the United States are in the toughest position.
What dark pope was ever given such power?
By what authority do the villains who defrauded the world place themselves on a throne, and pass judgment on its states and nations? Today California and Greece, tomorrow the United States and Britain, next year Germany and Japan.
The Wall Street banks failed, entirely by their own action. Their terror was almost at an end, but they raised the fear levels to a final crescendo, proclaiming that everything in the world would tumble down without them. And it worked: “We the People” had our blood tapped to rescue them.
Now the Wall Street mob come to rob the same nations and states who rescued them of a few interest points more, and in the process to destroy and discredit the institutions and the people who might have the power and eventually develop the inclination to resist them.
Those who do not meet Moody’s standards will pay more, it’s that simple. Moody’s and the rest of the bankster filth get to dictate that state budgets must be cut, taxes on the rich kept low, services scaled back, infrastructures allowed to rot, sweetheart deals with connected contractors go forward, school teachers fired and children left to wallow. If not, they lower the credit rating and demand a higher cut of the budget.
This is the latest price we pay for that cowardly act of appeasement by the leaders in Washington, Republican and Democrat, in September 2008.
Turn on your TV, and you can see propaganda spots for Bank of America and CitiGroup, paid by your taxes - “the bailout” - and by the cheapening of your currency that allowed the Federal Reserve to flood these zombie banks with cash.
Read the gossip pages, and you can find out how some of the leading criminals are posing as philanthropists, or using their latest round of bonuses to frolic with the stars. Paid by you. Watch the news, and you will learn of their lobby’s latest successes in Washington, and again the lobbyists are paid - millions - by you, to screw you.
Banking regulation? That has to go through legislative bodies filled with the paid servants of the banks, like Chairman Dodd, and even if some minor restraints do come out of the effort, the process takes years.
Meanwhile, Moody’s can downgrade a country in less time than it takes for Madam Speaker to read the title of a bill. As soon as it is spoken, their decree hits with the force of a natural disaster.
California, the United States, Greece and the EU, and all the other world’s nations should not be living in terror of Moody's.
The Moody's executives should be living in terror that law enforcement agencies are about to knock down the doors of their offices at World Trade Center 7 and seize their files, search their homes, take their Blackberries, lead them off in cuffs. Tomorrow morning would not be soon enough.
The loose ends that unravel the Wall Street criminal complexes are there, with the "auditors" - consigliere - who have shielded and decorated the Goldman Sachses and the Citis and the AIGs, the JPMs and BoAs.
Here is my powerless Internet cry for the day, and if there’s a spirit in the world after all, may it be magnified a trillion times and come true before this year is out:
Seize Moody's. Now.