lustylad,
Is it because the pornstar is running a massive Ponzi scheme? If it is not, I don't think I understand the point you are trying to make. As I recall, nobody looked twice at Bernie Madoff until he stopped paying redemptions even though a lot of people had a notion that something was not quite right. My point is that the big banks did not blink at facilitating fraud, but seem to get all timid at the possibility of someone running a sexual business.
As to trying to pass the buck from the banks that issued worthless paper, I'm not sure pointing to systemic fraud or government policy is really a defense. The bottom line on both cases is that the bank failed to make the requisite disclosures to prevent their clients--the ones to whom they owed fiduciary duties--from making misinformed financial decisions while the bank profited from those same misinformed decisions. In the case of Bernie, it was letting them hand their money to a fraudster. In the case of the MBS, it was letting them buy junk. Originally Posted by Karl Hungus
Wow, you really are that dense... Let me try again. If you were mugged over and over again by the feds, wouldn't you lay low and try not to do anything even remotely questionable? US banks have become easy marks. They keep getting mugged for billions of dollars by libtard politicians, opportunistic state district attorneys and suddenly overzealous regulators accusing them of all kinds of alleged sins. People like you don't get how bogus this is because you don't understand banking at all. I am sure if the feds fined JPM-Chase for allowing a porn star or a call-girl service or someone running a sexual business to open a checking account, you would be the first to applaud.
Large banks administer hundreds of thousands of deposit accounts. Since when are they supposed to police each of the millions of transactions flowing through these accounts each day? That is absurd on the face of it. If you buy a car that turns out to be a lemon, do you blame the dealer or the dealer's bank? Before he ran a Ponzi scheme, Bernie Madoff operated a legitimate clearing business and sat on the board of NASDAQ. His investment business (the Ponzi scheme) was regulated by the SEC, which looked at his books repeatedly and found nothing amiss. Why do you expect the banks to do the SEC's job for it? Bernie Madoff's victims were not even clients of JPM-Chase so why would the bank have any fiduciary duty to them? You're not making sense.
As for MBS, these securities have been around for 30+ years. By and large, they have made mortgages more available and affordable for millions of Americans. In the early 2000s, greedy investors began to pressure MBS issuers for higher-yielding paper. To accommodate this demand, the banks started to securitize sub-prime loans. Anyone who knows two cents about investing understands that higher risks go with higher returns. As I mentioned already, the issuing banks listed those risks in the MBS prospectuses, so they DID make the required disclosures. Why do you blame the banks when the MBS buyers were too lazy, stupid and/or greedy to read the prospectuses? Or maybe they read them and decided at the time the risks were acceptable?
Btw, very little of this paper became totally “worthless”. As soon as it was issued, it could be bought and sold in secondary markets. A lot of MBS traded at deep discounts during the financial crisis, but not at zero. Anyone ballsy enough to buy the paper back then made a lot of money as the housing market recovered. “Junk” is in the eye of the beholder. A shitty security at 98 may be a screaming buy at 28.
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