So my new book, The Monster: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America--and Spawned a Global Crisis, is now out and about. (Sorry for the long subtitle. Needed to be said.)
I wanted share some quotes from the book. They give the flavor, I think, of the corruption that fueled America's mortgage frenzy and helped produced the greatest financial disaster since the Great Depression.
Given the current robosigning, document-backdating foreclosure crisis, it's worth thinking about what happens when fraud and recklessness go unchecked.
Here goes:
"I became a thief. And unfortunately, I found I was a very good thief."
"We are all here to make as much fucking money as possible. Bottom line. Nothing else matters."
"Anything that benefited production -- that benefited me and benefited my wallet-- I'd do it."
"It's hard to have a guilty conscience if you don't have a conscience."
"Roland could be the biggest bastard in the world and the most charming guy in the world. And it could be minutes apart."
"He fucked me. But within reason."
"Deep down inside he was a good man. But he had an evil side. When he pulled that out, it was bad. He could be extremely cruel."
"People don't need access to predatory lenders. That's like saying people need access to poison, or children need access to mumps."
"If you don't find the true pain, you won't write the loan."
"Imagine what happens if the housing bubble bursts."
"These people, you had all the confidence in the world in them."
"Tell him to do what ever it takes to close that loan or it's his ass."
"Let's compare W-2s. I made over two million dollars. What did you do?"
"There's nothing in the world more dangerous than a sales presentation in the hands of a salesman."
"Your people find too much fraud!"
And, finally, subprime billionaire, mega-political donor and one-time U.S. ambassador Roland Arnall, explaining, in testimony before Congress, why his company, Ameriquest, engaged in widespread predatory lending:
"Stuff happens."
Michael Hudson is a staff writer with the Center for Public Integrity and author of The Monster: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America--and Spawned a Global Crisis.
An excerpt from The Monster can be found here.
Follow Michael W. Hudson on Twitter: www.twitter.com/michaelwhudson
So, we have legislative actions all over this country, from cities, to counties, to states, that are voting on cutting pensions of public servants, under the auspice of "saving money." Here in silicon valley, even our dem mayor is supporting it, so that the broom is colored by both blue and red at this point.
Institutions duped by AAA rated toxic waste want and even may get their money back.
Thanks to Mammon, the Phoenician good of money this will happen to a Republican congress.
This is in contrast to the 1980s S&L scandal. In the aftermath, 1,000 S&L insiders were convicted of felonies. Some pretty big names -- including Charles Keating of Lincoln Savings fame -- spent time behind bars.
Part of this may be a question of timing. We're only three years out from the meltdown, and it takes a long time to make and prosecute a criminal case. We'll see what state and federal prosecutors do over the
next couple of years.
Solution? Require that the company that makes a loan retain at least 10%, or liability to repay that 10%, if they sell the loan. This 10% would be the lowest value debtor, meaning if the customer couldn't afford to pay the full mortgage payment, the loan company would be the first one shafted. If the home was foreclosed on, and sold for 91% of the loan amount, the other investors would get their money, and the loan company would get only 1% instead of 10%.
I betcha they would go back to due diligence then!
in this one? or in the next one? or in the one after that?
let's face the new world reality: it's already here.
to dream is all that is left!
I figure if I throw out a good suggestion for every problem, maybe a few will appeal to the powers that be and get passed?
In the mean time, the real solution to big banks is to make them smaller-find out if anyone you know banks with BofA, Citi, Wells Fargo/Wachovia, etc. If they do, ask them if they support the bailouts, or if they are moving their money?
If we could get 50% of the folks with money in those banks to pull it out, we would solve the "to big to fail," problem, and it is a solution that the Tea Party and Progressives can both support!
I have yet to see anyone explain in believeable detail "where the money went". I don't believe money just "disappears", unless it is into some crook's pocket. We seriously need to slash open pockets until we find it and then get it back. Mounting a head on a pike outside the exchange and changing it out every day would be a good incentive to get all the information we need.
Banks are capable of "creating," money electronically. When you deposit money in checking, the bank now has two copies of every dollar, the one you "lent," them, and the one you have. Multiply that by the number of savings and checking accounts, and you find that almost 90% of the money in circulation is electronic fiat.
The real issue though is that the loan companies were skimming a few thousand from a scam that drove prices up 70%. This is analogous to someone who smashes your car window to steal your car stereo, which they sell for $20. You will probably spend about $1000 fixing all the damage.
That is why we punish those folks based on the $1000 of damage they do, not the $20 they get. That is why I wish we could make those folks pay back what they cost everyone-or at least go bankrupt trying. It would make them think twice about doing it again (as opposed to now, where we have basically given them a green light).
Maybe we could have a loan officer conference and invite foreclosed folks who own guns to stand outside???
It would improve the species, getting folks like that out of the gene pool (the loan officers, not the gun owners).