Amvona

Tattoos, Pyramid Schemes and Social Justice

Friday, 12 November 2010 14:02
pyramid_scheme We had planned to write a blog post on systemic fraud in the US financial infrastructure, particularly as it relates to the mortgage industry, mortgage origination and servicing fraud.  However, today a very good article was published by Matt Taibbi of Rolling Stone which includes colorful first-hand accounts that vividly illustrates the problem on both a macro and micro scale. 
 
 
The plan was to outline these same points regarding the device of “securitization” of mortgage lending through derivatives that allow the formation of a traditional “pyramid” scheme, or what we prefer to call in the US a “Ponzi” scheme – perhaps, within a few years we may just opt to drop the name “Ponzi” altogether in favor of something like “business model for US banks in the early 21st century”.  However, rather than reproduce what Rolling Stone has already done, we thought it would be a better to simply promote the existing article, with a few additional and brief thoughts on what we feel is likely the only solution.
 
Published in Economic Analysis

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