the flaw ..

[frenchy]

so i watched this documentary yesterday called the flaw .. it was made in 2010 and it was all about the crash we had and what led up to it .. they called it the flaw cause thats what alan greenspan called it when he testified before congress.. he said things were goin along pretty good and then there musta been a flaw in the system .. pretty good explanation huh ?..

so for those of you who didn't see it i'll summarize it briefly for you .. we had the crash because real estate values had been falsely goin up because banks were loanin money to anybody for anything for any amount because as soon as they wrote the loan they'd bundle it with a bunch of other loans and sell them .. so they could proceed to write a bunch more loans that were for over inflated values and bundle them up and sell them till finally like playin with a live grenade .. kaboom ..

now i'm not aware of any solutions to this flaw but as i said this was made in 2010 so it was all still pretty new .. but i'm willin to bet that as soon as the heat dies down these rascally bankers will be right back to their old shenannagins and writin bad loans they can sell .. so how do we stop them ?? my plan is pretty simple .. lets say you buy a tv from sears .. you'd wanna know the warranty wouldn't ya ?? and if there was a problem what do ya do ?? you could return it to sears .. or if its past a certain point then sears will steer you back towards the manufacterer .. but someplace down the line if its still within the warranty period you should get some kinda satisfaction .. either a new tv or at least get that one fixed .. 

we can do this one of two ways .. the first would be to prohibit banks from bundlein mortgages period .. thats probably too simple a plan and would get a lot of pushback from the banks .. cause they like to sell and resell stuff to make money .. even if it ain't worth what they're sellin it for ..

the second way which is probably the way it would end up goin would be to make the original writer of the loan responsible for any loan failures .. this way they can bundle em up all they want but like musical chairs if its a bad one then it boomerangs back to the originator .. and you could sell that loan 127 times .. but if it fails if it was written by bankamerica then its their baby ..

either way the mortgage brokers would be a lot more careful when they wrote loans , which was not the case before the crash .. and if they didn't act in a fiscally responsible way they could start sendin some of these mortgage brokers to camp cupcake for a few months to get their minds right .. cause thru all this whole mess how many people actually went to jail ?? besides bernie madoff ??

anyway .. its a start .. at least we'd be doin somethin .. even if it was wrong .. it couldn't be any more wrong than what they did so far could it ??   

[ProblemAgain]

you really need to watch this one...

http://www.pbs.org/wgbh/pages/frontline/untouchables/

The untouchables : are Wall Street's leaders too big to jail? / [vi...

[Arlington, Va.] : PBS : PBS Distribution, c2013.
Subjects	Mortgage-backed securities -- United States
	Investment banking -- Corrupt practices -- United States.
	Banks and banking -- Corrupt practices -- United States
	Bank fraud -- United States.
	Securities fraud -- United States
	Finance -- Corrupt practices -- United States.
	Bank failures -- United States
	Global Financial Crisis, 2008-2009
	Wall Street (New York, N.Y.)
	Documentary films
	Nonfiction films
Alt Title:	Are Wall Street's leaders too big to jail
Edition:	Widescreen.
Description:	1 videodisc (60 min.) : sd., col. ; 4 3/4 in.
Summary:	Looks into reasons why, despite apparent evidence of fraudulent pra...
Notes:	Documentary. Originally broadcast January 22, 2013 as an episode of the televisi...

[P.A.]

Pretty good ideas Frenchy. I think you are right about the original writer being responsible. Small banks would also help. My bank, "Bank of Dickson" has only four branches and they are all in town here. There told capitalization is about 200 million dollars. I can walk in a they know my name. I can ask to talk to Donald and the President of the Bank will come out and call me Ted.
This bank can do everything I or anybody else needs. I have investment at a small brokerage firm for the same reason.
No "too big to fail" at either.

[Lifesighs]

The insurers who guarantee loans could have also stopped this, they knew what was happening but they liked keeping all that money coming in better than doing their jobs. Crooks all of them. Wall Street, Insurers, Bankers big and small.

[ProblemAgain]

How a Wall Street Felon Stayed in This Mansion by WSJ Live 4:58 min...

[P.A.]

I would get so confused by all of that, that I wouldn't know where to go home to

[ProblemAgain]

even when they get caught being shysters, they still get to keep what they stole. remember michael milken, the king of the junk bonds? he finagled a billion dollars out of investors and when he was caught, his sentence was 18 months in a halfway house and he had to give back half the money. wonder why they don't do that when a guy robs a bread store and gets 70 bucks?

and this asswipe should go back to prison and his wife and other relatives as well for defrauding the courts and you could even bust them under a rico statute....then turn the irs loose on them

[ProblemAgain]

Prosecutors are still chasing billions in uncollected debts

Justice Department and other financial watchdogs face challenges pursuing judgments

By Michael Rothfeld and Brad Reagan 7 hours ago

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The Justice Department has been unable to recover $97 billion arising from enforcement actions and other criminal cases, an amount that has tripled since 2004, highlighting prosecutors' challenges in tracking down money stolen from investors and others.

The uncollected debts—which include criminal fines owed to the Justice Department from companies and individuals and restitution payable to investor victims—have grown because judgments have steadily increased but the percentage collected hasn't.

In 2004, for instance, the Justice Department collected 28% of the amount of new criminal debts and interest in that period; that percentage dropped to 22% in the 2013 fiscal year that ended Sept. 30, according to federal statistics.

A Justice Department spokesman said the agency "makes strenuous efforts to identify the assets of fraudsters and other financial criminals and to collect as much restitution as possible from them." According to the Justice Department, just $10 billion of the $97 billion outstanding is able to be collected.

The spokesman said enforcement actions in recent financial-fraud schemes have resulted in large restitution orders based on victims' losses but "not always commensurate with the defendant's gain or ability to pay." He also noted that the agency collected $8.1 billion in civil and criminal actions in fiscal 2013, nearly triple the cost of the department's 94 U.S. attorney's offices and its litigating divisions.

Recoveries have been modest in some prominent cases. The Justice Department has received a fraction of a judgment from Jordan Belfort, founder of shuttered brokerage firm Stratton Oakmont and depicted by Leonardo DiCaprio in "The Wolf of Wall Street."

In 2003, a federal judge ordered Mr. Belfort to pay $110.4 million in restitution after he pleaded guilty to securities fraud and money laundering in 1999. He has paid $11.8 million so far, largely from the forfeiture of properties, while earning income from selling his story and other endeavors.

Last year, the Justice Department moved to have him declared in default, but it withdrew the motion pending negotiations.

"Either they are just not very clever or the people they are up against are extremely smart," Bob Shearin, 67, of Manhattan Beach, Calif., a victim of Stratton Oakmont, said of the government.

Diane Nygaard, a Kansas City attorney representing Stratton Oakmont victims, said in a letter to prosecutors earlier this year that victims are "outraged" that Mr. Belfort is "living so well without having made restitution to them."

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In a statement, the U.S. attorney for the Eastern District of New York said: "We continue to make strenuous efforts to find every asset of Mr. Belfort's and hold him accountable."

Mr. Belfort didn't respond to requests for comment. He now is a motivational speaker and has said in recent media interviews that he intends to continue making restitution payments from his income, as required by his plea agreement.

The government has had some successes. The Justice Department has collected about $4 billion of $17.5 billion in principal investments lost in Bernard Madoff's Ponzi scheme. A bankruptcy trustee has collected $9.8 billion more.

Aside from the Justice Department, other financial watchdogs also have had trouble collecting judgments. In a page-one article Wednesday, The Wall Street Journal detailed how the Securities and Exchange Commission, a securities regulator that employs civil penalties and seeks returns of ill-gotten gains, collected 42% of the amounts defendants were ordered to pay in the three years that ended last September, down from 63% in the prior three-year period.

The article highlighted the case of former corporate raider Paul Bilzerian, in which the SEC has collected just $3.7 million of a $62 million judgment in two decades.

The SEC's enforcement director, Andrew Ceresney, said the SEC's collection successes are "unmatched" and that the agency is very aggressive in pursuing unpaid debts "when assets are available."

In cases brought by the Commodity Futures Trading Commission, a regulator of the commodity and futures markets, the government has collected 51% of $4.8 billion in fines ordered in the decade ending in early 2013.

But that money goes back into the U.S. Treasury, under federal law—not to victims. The CFTC reported that just $4.8 million to aid harmed investors had been collected out of $3.7 billion—one tenth of 1%—in judgments over the same period.

CFTC officials said additional money may have been collected in those cases through court-appointed receivers, but the enforcement agency couldn't say how much, if any, was collected that way. Officials also said collection rates are low because wrongdoers frequently spend all their money and declare bankruptcy.

Often, the government can't get anything back at all. Consider the case of Thomas L. Mitchell, who pleaded guilty in 2010 to a Ponzi scheme in which he defrauded Los Angeles County transit workers out of their retirement savings. A judge in his criminal case ordered him to pay $7.1 million in restitution.

Mr. Mitchell is serving a nine-year sentence in federal prison. He has said he had no money, and since he is in prison, hasn't been able to earn any. The government didn't find any, and no one is looking anymore.

Patricia Mayes, who drove a train for 23 years before retiring at 52, said the fraud cost her $312,000, all of her savings.

In a 2010 email to Mr. Mitchell, Mrs. Mayes wrote: "YOU HAVE NO RIGHT TO TAKE WHAT I WORKED FOR AND LEAVE ME DESTITUTE AND HOMELESS."

A spokesman for the U.S. attorney's office in Los Angeles said that, as in many cases, "we will likely recover very little, if any, money for the victims." He said investigators "found evidence of extravagant spending and no evidence of remaining cash."

Write to Michael Rothfeld at [e-mail]