Jim Sinclair of MineSet.com reports that James Galbraith, author of The Geithner Plan Won’t Work, was on Bloomberg TV this morning and noted the mortgage collateral fraud that I have been warning about for many years.
“Galbraith alluded to a fractional reserve approach towards mortgage securitization by intent of error whereby the same mortgages were securitized more than one time.”
What this means is that the bank portfolios are full of mortgages for which there is no real house. So toxic assets is a misnomer. Yes, there is toxicity. However, there are no real assets. There are, however, civil and criminal liabilities. Which means that if these toxic assets were auctioned off in an open process, the price would be set by how much the people with civil and criminal liability would pay to buy back the files to protect themselves.
But, wait, is this why the Federal Reserve, Congress and the Treasury are funding bailouts? Are the liable parties simply using borrowed money to have all the documents destroyed?