http://www.propublica.org/article/banks-self-dealing-super-charged-financial-crisis " Over the last two years of the housing bubble, Wall Street bankers perpetrated one of the greatest episodes of self-dealing in financial history. Faced with increasing difficulty in selling the mortgage-backed securities that had been among their most lucrative products, the banks hit on a solution that preserved their quarterly earnings and huge bonuses: They created fake demand. " It can't be "Fraud", because there are no criminal indictments. Is it "Capitalism"?
My next book is PT Barnum. He used to run a few pawn shops. He'd drop a few stubs around the streets of New York and people would pick them up and try to redeem them at his pawn shop. But first, he'd charge the people to look at the item (which was a worhtless piece of junk ie broken lamp, etc). The customer would then pass on redeeming the item.
Pretty much like Enron, they had a lot of fake corporations and could take stuff off the books internally... some guy made his bones as an analyst by watching cash flow and detecting that something was up that smelled bad... can't recall who that guy was though...
It's in the article. If you don't want to read the whole thing http://www.propublica.org/special/cdo-world Managers included pieces of CDOs that nobody else wanted into other CDOs under pressure from banks. The CDOs were owned by the banks which is why they were holding so much garbage when it blew up. But they got paid their hefty fees and bonuses up until then.
I saw this scam where a guy would walk into a coffee shop while he was talking on a cell phone and he would talk loud enough that other people could hear and he would say "Yeah, I forgot my wallet and I was at the flea market and this woman is selling this rare plate for $60. I can re-sell it tommorrow on ebay for $1000 minimum. I need you to hurry up and bring me 60 dollars so I can buy it before anyone else does. Just meet me at the booth. Its booth #29 at the flea market. Hurry!" Then the guy would leave the cafe and many times the people that listened to his conversation would go straight to the flea market and buy the plate for $60. The person selling the plate would then put out another plate exactly like it after they left. The same plate could be bought at walmart for $3. These people would just do this all day.
it was faked and they didn't see it coming, so which was it? <object width="640" height="385"><param name="movie" value="http://www.youtube.com/v/-fTh2GffJsM&color1=0xb1b1b1&color2=0xd0d0d0&hl=en_US&feature=player_embedded&fs=1"></param><param name="allowFullScreen" value="true"></param><param name="allowScriptAccess" value="always"></param><embed src="http://www.youtube.com/v/-fTh2GffJsM&color1=0xb1b1b1&color2=0xd0d0d0&hl=en_US&feature=player_embedded&fs=1" type="application/x-shockwave-flash" allowfullscreen="true" allowScriptAccess="always" width="640" height="385"></embed></object>