Janet Tavakoli Explains How Banks Converted Us Housing Into "fraud As A Business Model"

[interestrateripoff]

http://www.zerohedge.com/article/janet-tavakoli-explains-how-banks-converted-us-housing-fraud-business-model

Janet Tavakoli shares a presentation she prepared for the Federal Housing Finance Agency Supervision Summit earlier today, in which she attempts to explain to politicians how banks made fraud into a "business model" and how the damage can be repaired. It may not be easy: as she says, MBS became a "widespread interconnected ponzi scheme" - "Securitization professionals at several financial institutions knowingly bundled fraud riddled loans into RMBS. New investors needed to pay-off old investors. To delay being busted, they escalated and sped up the fraud. This required more “complexity” and the involvement of more cronies. Many CDOs and virtually every CDO-Squared were more fraud to cover-up fraud." Of course, the same can be said about the global economy, as now everyone is aware that the global Keynesian system is nothing less than Madoff's scheme taken to the infinite degree. But nobody will ever go to jail for that. For any remaining questions on the motives, the schemes, the payoffs, and, most importantly, the players, both the protagonists and the bribed co-stars, the below presentation attempts to answer all. And, unfortunately, Ms. Tavakoli's suggestion for how to fix this, which is remarkable precisely the same one we have been espousing since our advent, will never happen as it means the end of the Ponzi and the elimination of trillions in generationally stolen middle-class wealth.

Some slides from the presentation:

Securitization professionals at several financial institutions knowingly bundled fraud riddled loans into RMBS. New investors needed to pay-off old investors. To delay being busted, they escalated and sped up the fraud. This required more “complexity” and the involvement of more cronies.

Many CDOs and virtually every CDO-Squared were more fraud to cover-up fraud.

Dec 2006: Merrill, JPMorgan, and Ownit

• Merrill was part owner of Ownit.

• ML global finance head sat on Ownit’s board.

• JPMorgan yanks $500 million credit line.

• Ownit goes bankrupt December 2006; ML finance head

faxes in resignation.

• Stan O’Neal and Jamie Dimon can read newspapers.

That was bitchy

Edited December 8, 2010 by interestrateripoff

[interestrateripoff]

http://market-ticker.org/akcs-www?post=174392

It really doesn't get more damning than this.....

"Fraud As a Business Model", the slides from her presentation delivered today to the Federal Housing Finance Agency's Supervision Summit.

Unfortunately I don't have audio... but the Powerpoint slides speak for themselves...

From one of the slides:

• Investment banks - securities fraud

• Mortgage lenders – widespread fraud

• Rating agencies – junk science

• CDO “managers” – crash test dummies & accomplices

• Certain hedge funds – shorted CDOs they “managed”

• Bond insurers – money for nothing

• Regulators – poseurs and enablers

You gotta love it... and you darn well should read it.

The presentation is brutal, it is spot-on, it encompasses it all.

And now, with it out there under the white-hot light of the public and presented to the government's forum on housing finance supervision from one of the preeminent experts in the world of Structured Finance, there no longer is any excuse for the lack of action on these scams - from top to bottom.

Again, where are....

Handcuffs by genesis

Dennigers take.

[Redcellar]

These thieves rewarded themselves and staff with cruises during the good times. I'm not making that up. They spent the money at an incredible rate, but it was seen as a bottomless pit and they were the ones generating the massive profits, so all the crooks and inhouse 'cops' turned a blind eye. The stupidity and open corruptness of all the senior managers never failed to amaze me. But they patted each other on the backs, and never talked about the evil deeds. And they kept and still keep their jobs, only the small fish were let go. You couldn't make this stuff up.

[SleepyHead]

Just to give some more stuff on Janet Tavakoli, here's a video from a week or two ago. She sounds good.

Janet Tavakoli, president of Tavakoli Structured Finance, on the SEC's civil case against Goldman Sachs

http://www.dailymotion.com/video/xfrokb_goldman-shares-rebound_news

[interestrateripoff]

Cronies Excuse Fraud with a Lie

They thought housing prices would always go up.

No competent structured finance professional uses ever

rising prices as the foundation of an analysis.

Finance pros are highly educated and paid more than

95% of the country to do their jobs.

Another slide.

[Tiger Woods?]

Who is Janet Tavakoli and was she saying this before the chickens were coming home?

Quote from the end of the introduction of her 2003 book Collateralized debt obligations and structured finance, Janet Tavakoli (2003):

"Despite these caveats, I'm an enthusiastic proponent of structured financial products and welcome the growth of new products in the market." Admittedly, she was doing okay up until that point, having alluded to quite a few issues that will be familiar to people on here. In fact given these issues, I find it hard to understand how she could be so enthusiastic about structured financial products...unless of course she was making "loadsa muney" advising on them...oh wait, she was!

Lots of things in that book that should have flashed warnings about the whole market to anyone who read it. (Interesting that Buffet read it and felt compelled to meet Ms Tavakoli.)

Just another parasite? In my humble opinion, no, I don't think she is/was.

Rather, this is a case of a parasite who damn well knew what was going on, which is much worse.

So many experts have just popped out of the wood in the past couple of years to cash in on the speaking circuit to explain the bleeding obvious to the incredulous.

(Edited to add: Just finished reading the slides. Interesting that Meredith Whitney wasn't that bearish on Citi in 2007, and that Jim Rogers was onto them, shorting from $55 to $5. Also interesting that Ms Tavakoli should devote a couple of slides to the fact. I wonder if this is just plain female bitchiness/jealousy or something more subtle and clever? Tavakoli seems very keen on positioning herself near the top of a heap by fawning association and self promotion. cf. her book Dear Mr. Buffet. I bet she kisses up and kicks down like a pro.)

Edited December 8, 2010 by Tiger Woods?

[scepticus]

well said tiger. Ms Tavakoli is becoming a frightful bore to boot.

[interestrateripoff]

Who is Janet Tavakoli and was she saying this before the chickens were coming home?

Quote from the end of the introduction of her 2003 book Collateralized debt obligations and structured finance, Janet Tavakoli (2003):

"Despite these caveats, I'm an enthusiastic proponent of structured financial products and welcome the growth of new products in the market." Admittedly, she was doing okay up until that point, having alluded to quite a few issues that will be familiar to people on here. In fact given these issues, I find it hard to understand how she could be so enthusiastic about structured financial products...unless of course she was making "loadsa muney" advising on them...oh wait, she was!

Lots of things in that book that should have flashed warnings about the whole market to anyone who read it. (Interesting that Buffet read it and felt compelled to meet Ms Tavakoli.)

Just another parasite? In my humble opinion, no, I don't think she is/was.

Rather, this is a case of a parasite who damn well knew what was going on, which is much worse.

So many experts have just popped out of the wood in the past couple of years to cash in on the speaking circuit to explain the bleeding obvious to the incredulous.

(Edited to add: Just finished reading the slides. Interesting that Meredith Whitney wasn't that bearish on Citi in 2007, and that Jim Rogers was onto them, shorting from $55 to $5. Also interesting that Ms Tavakoli should devote a couple of slides to the fact. I wonder if this is just plain female bitchiness/jealousy or something more subtle and clever? Tavakoli seems very keen on positioning herself near the top of a heap by fawning association and self promotion. cf. her book Dear Mr. Buffet. I bet she kisses up and kicks down like a pro.)

Excellent perhaps she could advise Gordon Brown?

[South Lorne]

Excellent perhaps she could advise Gordon Brown?

...knickety knackety noo noo noo.....for Gordo the wee cooper from Fife......

http://ingeb.org/songs/weecoope.html