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Why hasn't anyone been arrested?

By       Message Gene Messick       (Page 1 of 2 pages)     Permalink    (# of views)   16 comments

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View Ratings | Rate It Headlined to H3 10/31/08

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Only about a month ago, most of us ordinary folks were shocked to learn that the greatest economic empire the World has ever known was basically rotten to it's core.  We're barely a month into the 2nd American Revolution.  Life as we knew it will never be the same.

As we struggle to understand how we got to this place, a lot of questions need answers.  Here's one of the more critical inquiries.

Ancient and venerated financial giants on Wall Street began toppling like hollow images of themselves.  And hollow they were, we came to learn, as we watched in awe as they collapsed, one by one, like the World Trade Center towers did at the other end of GwB's rule.

These were not attacked by foreign terrorists.  They were carved away from the inside with a razor sharp scalpel of greed, lethally removing muscle and bone, right down to their foundations, until the slightest breeze could bring them down.

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GwB was warned of a possible terrorist attack on the US when he stole into office.  He ignored it.  For years, he's been warned about the impending collapse of Wall Street.  He ignored it.

How could the Street be in trouble when it was soaring into the stratosphere?  Yet those inside knew, as they stuffed their bags with bonus cash on the way out, when what they were entrusted to protect began folding.  Why should they leave empty handed?  StealAllUcan, whileUcan.

We should have guessed something was up when banks started stripping the word 'trust' out of their names.

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But why hasn't anyone been arrested?  Hometown bankers made bad mortgage loans, on houses worth two, three, or four times what the borrower could afford.  Even when homes by hundreds of thousands across our land went into foreclosure, they kept making impossible loans, betting they could take houses back and sell them again.  Dare we call them home wreckers?

When that didn't work, they bundled bad mortgages together and discounted them to Wall Street Bankers, sight unseen.  After all, this was the full thrust of GwB's much touted Ownership Society.

Then, whiz kids with Harvard MBAs and at Uncle Miltie Friedman's urging, started inventing financial instruments out of nothing at all.  Using stacks of contractual papers that only an advanced calculus major could understand, they invented "derivatives." 

Worthless sub prime mortgages were repackaged in sparkling tinsel, tied up with fancy bows they called Credit Default Swaps, an insidious form of derivative.

Senator Phil Gramm had tacked a Rider onto an Appropriations bill in the last hours of a session, saying that derivatives, whatever they were, would not be regulated like stocks and bonds.  They were to be sold 'over the counter' by unregulated private agreements.

Derivatives are NOT investments.  They are bets against both sides losing.  Hedge Funds hedged these bets.  Derivatives are nothing but gambling, pure and simple.

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It's a giant shell game that Wall Street played expertly, always one step ahead of discovery.  Until, someone figured out, there never was a pea under any shell, not from day one.

So why does this affect the price of tea in China?  If the banker boys are just jerking each other off over in a dark corner, who cares?

Because, like the silent killer, AIDS, a similar virus was traveling incognito into financial markets around the World.  Based on 'trust' (remember that word?) of the American Financial Empire, global banks bought instruments stuffed with derivatives, and were happy to do so, trusting the indecipherable sales contracts.

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For 17 years Gene Messick studied and taught Design at NC State University and Cornell. Co-founding the Visual Design Program at NCSU, he established the Photography Program at Cornell, where he taught in the Architecture Department, most interested (more...)

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