Tuesday, November 16, 2010

THIS HELPS TO EXPLAIN WHY WE'RE SCREWED

If you've ever wondered why congress is so clueless when it comes to understanding how to unwind and fix our financial mess take a look at this from Zero Hedge.

It appears that Dan Edstrom, who performs securitization audits (Reverse Engineering and Failure Analysis) for his company, wanted to find out who actually owns his home and how his home fit into the securitization process (ABS, CDO, CDS, etc.) that was created by the geniuses on Wall Street. After a year, this is what he came up with ...


Zero Hedges Williambanzi7 put it best when he commented: "Take a look at this chart and then decide how long you think it will take for Barney Frank and Eric Holder to sort everything out."

Put another way, this chart shows why we're screwed.

Worse, unlike the students in my "Myth of the Free Market" class, most members of Congress don't understand the basics behind how we got into our current predicament and, consequently, don't know how to clean up this mess. For our members of Congress it's a lot easier to hide behind blind ideology, shrug, and say "let the market work ... let's deregulate."

Throw in a few campaign contributions and ... well, you get the picture.

At the legal seminar Mr. Edstrom is organizing for December, topics to be discussed include "control fraud" (see William K. Black), the securitization process, and the legal loopholes behind the engineering of complex financial instruments by Neil Garfield.

- Mark

P.S. Here's the link for an expandable version of the chart.

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