Photo: Robert Johnson, Business Insider
Today, in the cold rain, around 100 Occupy Wall Streeters stood and listened to Matt Taibbi explain how banks packaged subprime mortgages, shipped them around the world, and brought the global financial system to its knees.That, he said, was a crime and a very clear one — fraud. And it is one thing that authorities have still not busted the banks for.
Right now, Taibbi’s working on an article about Bank of America. He told the crowd that when he called one of his sources to ask how to describe how bad the bank’s dealings were, his source said, “how many pages are your editors going to give you, thousands?”
Here’s how he explained packaging mortgages:
“The easiest way to explain this is that banks were selling oregano as high grade weed…That’s how the banks turned people like you with no jobs and bad credit into mortgage holders. Berkshire Hathaway…Warren Buffett’s company is not AAA, but they (banks) turned an unemployed janitor in Los Angeles into AAA.”
He explained the process by holding up an empty Talbot’s bag. People with good credit and bad were all piled into the same investments (the bag), he said, and that bag was sold to institutional investors etc. all around the globe.
“It makes a sort of sense as long as there’s some money in the bag,” he said, “the questions is ‘how much money there is in the bag?'”
And don’t even get him started on credit default swaps… “It’s like banks selling a lot of cars with faulty breaks, and then buying life insurance policies on everyone who bought the cars.”
Watch a video of his explanation below: