This process is simple and easy to understand. It takes just a few minutes to fully understand the level of financial crimes and outright treason conducted by Goldman Sachs, AIG, Bank of America and others.
please read on.
Ready?
Go:
Goldman Sachs and other financials institutions saw that fraudulent lending was being perpetuated by industry insiders in the country.
Goldman Sachs and other financial institutions were looking to sell these fraudulent mortgages on the open market so they sold them in bundles of debt, often mixed in with non-mortgage assets, called collateralized debt obligations (CDOs).
Goldman Sachs and other financial institutions were having trouble selling these fraudulent mortgages-bundled-into-CDOs on the open markets so they pressured the ratings agencies of Standard and Poor's, Moody's and Fitch to lend more favorable ratings to the junk CDOs than they deserved (AAA). The financial institutions naturally do business only with ratings agencies who give them more favorable ratings so there is a huge incentive for the ratings agencies to push their ratings toward AAA.
Godlman Sachs and other financial institutions were making a killing and found that there was more market demand for these kinds of products than there were actual (junk) assets to bundle up and sell.
October 31, 2005
The CDO market has become one of the most profitable markets for investment banks," given diminished IPO and M&A activity, says Axel Pierron, analyst and author of the report. "The growth of this market is not going to slow down dramatically, despite various hiccups," he adds.
so:
Goldman Sachs and other financial institutions began producing Synthetic CDOs, called Collateralized Synthetic Obligations (CSOs), these are simply paper, not based on any real assets but linked directly to the value of the garbage CDOs already on the market. (the ones that have an AAA rating by captured ratings agencies).
by November 2008, there were approximately $600 billion U.S. dollars worth of Synthetic CDOs on the market.
Goldman Sachs and other financial institutions knew all along that these were fraudulent loans that were bound to collapse. Indeed, they decided to create specific bundles of debt that were even more worse off than others, designed to "blow up". They then sold those ticking time bombs to clients and at the same time shorted those same Synthetic CDOs on the derivatives market. (to make money as their value went down, as they knew that they would)
The deal lost investors $1 billion but produced $1 billion in profits for Goldman's collaborator, Oregon-based Paulson & Company, a hedge fund betting the housing bubble would collapse.
-------------------------
Summary:
The end result of this massive mortgage fraud, worked in collusion between Goldman Sachs and other financial institutions, was to orchestrate a wide-scale "pump and dump" scheme on the U.S. housing market. The one investment in America strictly relied upon by the U.S. population as their shelter of both life and wealth.
.
This grand theft or, as they called it: The Big Short, necessarily led to overwhelming economic decline, the loss of household wealth, unemployment, pain and suffering in the U.S. population as a whole.
.
It is reasonable to assume that this manufactured economic downturn, by Goldman Sachs and other financial institutions, caused tens of thousands of unnecessary U.S. civilian deaths due to strife, poverty, suicide, illness and outright violence.
Sometimes, I wish that our justice system worked more like China's. . .It is obvious that the Enron prosecutions did nothing to deter this horrific crime of treason against the U.S. civilian population, in a time of war.
I contest that these activities, intended to bring about a domestic economic catastrophe, willfully and duly performed by these individuals against the population of the united states of America, is a form of economic warfare. An attack on the economic and social welfare of the general population of the United States. This attack was so intentional and harmful to the United State's population that it directly contributed to a reduction in our military's capability to act in a time of war, and contributed to sentiments of sedition and mutiny within the rank and file members whose domestic families were experiencing undue financial hardship during this attack.
I think that it would be reasonable to file claim against these people under Federal Code Title 18, Chapter 115 (sections: 2381, 2382, 2384, 2388), and Chapter 96 (The RICO Act)
I want you all to be sure and watch the video and understand that the creation of the synthetic CDO derivatives caused the suffering you see today.
----------
Update: Of course, aided and abetted by the ratings agencies
Here's a 2007 IM exchange, uncovered by congressional investigators, between two S&P employees regarding one of the phantom collateralized debt obligations that killed the economy:
S&P Employee #1: btw-that deal is ridiculous
S&P Employee #2: I know right.. model def does not capture half of the risk
S&P Employee #1: we should not be rating it
S&P Employee #2: we rate every deal
S&P Employee #2: it could be structured by cows and we would rate it
S&P Employee #1: but there's a lot of risk associated with it – I personally don't feel comfy signing off as a committee member.