(IL CONTAGIO GLOBALE) Subprime mess is a crime story
sara' la notizia di oggi sulle perdite di Swiss Re(insurance)...
sara' che la stessa societa' di riassicurazioni aveva detto che era "minimamente impattata" dai subprime...
ma se e' vero quello che si dice in
questo articolo:
3. Perpetrators should not be in the same country as victims. If victims are foreign, police investigations are less politically justifiable.
ho paura che EU, Cina, Japan e altri subiranno grossi danni...
non so se (e non spero che) il CONTAGIO GLOBALE arrivera' (arrivi) a tanto, ma i segnali sono preoccupanti...
Subprime mess is a crime story
Diane Francis
Financial Post
Saturday, November 17, 2007
The subprime mortgage and asset-backed paper scandals constitute one of the biggest frauds ever perpetrated. They have resulted in mass foreclosures, writedowns, bankruptcies, firings and billions lost. The US$10-trillion U.S. home-lending sector was, and perhaps still is, rotten. At the top were mortgage lenders, then Wall Street and others who exported junk debts to lenders around the world after prettying them up.
At the bottom was a corrupt system that handed out mortgage broker licences like driver's licences, and then handed out mortgages like candy at Halloween. In between were crooked appraisers and organized crime.
The stories are now seeping out. A money manager friend of mine said his limousine driver in Chicago became a mortgage broker then made a fortune indiscriminately handing out mortgages to friends and relatives. He retired to Poland a multi-millionaire. In Cleveland, a church preacher moonlighted as a broker and put his parishioners into houses they could not afford, including a 78-year-old woman just kicked out of her home.
Miami police have uncovered a massive foreclosure fraud scheme involving appraisers, brokers and accountants who recruited straw buyers, inflated condo prices, drew up fake tax returns, got huge mortgages, paid developers less than the mortgage raised and pocketed the difference. The straw buyer was paid off and abandoned the property to foreclosure.
The press thinks this is a financial story. It's a police story. These scandals contain all the necessary elements that characterize all world-class frauds:
1. Many "little" people must be involved who don't know what others are up to or that they are party to a crime. That makes proving conspiracies and criminal intent difficult.
2. As many borders as possible must be put in place between the victims and the perpetrators. That makes investigation expensive or impossible.
3. Perpetrators should not be in the same country as victims. If victims are foreign, police investigations are less politically justifiable.
These three elements provide the "winning conditions" for every successful fraud because far-flung wrongdoing, involving many jurisdictions, frustrates the press, the law enforcement officials and makes litigation expensive or even impossible.
Offshore manoeuvres, like Enron or Bre-X's, allowed the frauds to grow undetected, giving the bad guys time to get away or to hide their ill-gotten gains. Some have had time enough to end up on a beach somewhere that doesn't have any extradition treaties.
This is why the RCMP did not "get their man" in the $9-billion Bre-X fraud. The case was too complicated and expensive to pursue and too many victims and the perpetrators were outside of Canada. Enron, by contrast, was heatedly pursued because the victims and the perpetrators were in the United States, plus there were links to the George Bush Presidency.
In the subprime mess, there seems little political will to do much of anything south of the border. Foreclosures dot the urban landscape, mostly affecting speculators or disenfranchised people. Wall Streeters get tossed from jobs, write down fortunes and collect obscene severance. It's all business and usual. I hope intermediaries will be sued out of existence by the deep pockets they damaged and defrauded.
dfrancis@nationalpost.com - Diane Francis blogs atwww.financialpost.com/dianefrancis
© National Post 2007
PS: sul
suo blog c'e' una versione dal titolo:
"Subprime Mortgage and Debt Fraud: Worse than Enron and Bre-X"
che finisce cosi':
"Even so, and once again, crime pays."