Ponzi schemes work because of the continuing success of the tactical big lie — i.e., nobody would tell a lie that big because it would discovered and therefore it must be true.
The big lie became deadly on Wall Street when it moved a deformed securitization tactic into the lending marketplace, claiming that loan accounts were being created. In truth, they were being avoided and extinguished.
The obvious answer to most questions is simply that securities brokerage firms are in the business of selling securities, not making loans. None fo them wanted the profit center to be from paymetns on loans nor did they want the risk of loss associated with loans. So they did not accept those risks and they did not pass on those risks tpo investors. Instead they eliminated the risks.
The fact that they figured out a way to satisfy the supposed “loan” balance through the sale of securities and not report it to anyone is testament to their ability to sustain the lie that crashed the US economy in 2008 and now threatens to do so again.
The only loan balance that was ever created andd satsified is the loan that was made, usually by offshore sources, to securities brokerage firms (“investment banks”) who used that money to advance funds to the closing table with homeowners. When they sold the securities, the loan was paid off and satsified. No other loan balance existed.
Homeowners of course believed that they and received what they requested — a loan. But then they found out that there was no company anywhere that maintained an unpaid loan account on their books and records. There was only lawyers who claimed or implied that such an account existed.
And then homeowners learned that the courts were now saying that they MUST owe money to somebody — and why not the party designated by lawyers to be a Plaintiff or beneficiary under a deed of trust.
Those lawyers produced a “payment history” that was asserted to be a business record of a company that has been designated as a “servicer”.
But since no payment had ever been deposited intot eh account of such a designated “servicer” that apayment history did not reflect any business conducted by the alleged “servicer.” Hence the record was not a busienss record and should not have been accepted into evidence as an exception to the hearsay rule. It was a report on the report of third parties who remain undisclosed.
Today those third parties have been identified by the CFPB as FINTECH companies and have been reclassified as “servicers.” (Look it up).
Lawyers should take note: only a witness from the FINTECH companies is competent to testify to the existence of business records of the FINTECH company.
And such witnesses cannot testify as to the records or business practices of the companies designated as “servicers” because the FINTECH companies do not work for the designated “servicer.” Instead, they work for the securities brokerage firm that initiated the securitization scheme.
The “servicer”, like the “REMIC trustee” is a ruse. It is a big lie.
Steven Hoffenberg, Debt Baron Who Ran a Vast Fraud, Dies at 77
https://www.nytimes.com/2022/0
The current 25-year run of “securitization” and “derivatives” is based entirely on a foundation of prior Ponzi schemes. Some of those were running concurrently with the start-up of “securitization “ in 1983 — went the current shadow banking marketplace was ZERO instead of what is now reported as approximately $1..4 quadrillion.
The “vast frauds” created by people like Bernie Madoff and Steven Hoffenberg barely covered a single day’s work for most “investment banks.”
To put that in perspective, the shadow banking market is trading paper that is at least nominally worth around 16 times the total fiat currency in the world. This is important because it is the reason that the power of central bankers has been reduced in controlling currency and inflation.
It was toxic from the beginning. But the toxicity of these weapons of mass financial destruction became fatal when they moved to the lending marketplace. It continues to drain the economy, the federal reserve, and everything. To prop up the economy, we issued new currency in epic proportions. This is the current base of inflation.
Change in our perception is probable and not merely possible. These transactions are based on the thin air of imagination and not any fundamental values as we commonly accept.
Such schemes depend on continued sales of the “Shitty deals” reported in Goldman Sachs correspondence around the time the company was both issuing and betting against certificates falsely labeled as mortgage-backed securities. Any securities issuance plan that depends upon continued sales of new securities to pay off investors is, by definition, a Ponzi scheme.
The IOUs issued in the form of Certificates were a discretionary promise by securities brokerage firms to make payments to investors who were stupid enough to buy the certificates. Those payments could stop at any time. The prospectuses all had a provision for “servicer advances” that were not paid by any servicer.
And they were not an advance since the prospectus disclosed that the money was coming from the proceeds of sales of certificates. That is not an advance. That is a return of money.
They were not securities — something Wall Street firms had achieved with the exemptions created in 1998 and 1999. They were entirely free from regulation. [Registrations with SEC are merely filed to enable uploading documents to sec.gov and then downloading them with the Sec.gov name in the header to create the illusion that it is a government document].
They were not mortgage-backed since the certificates conveyed no interest to the payments, obligations, debts, notes, or mortgages of anyone.
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