I posted this on my blog a while back but I think it’s worth a second look. I wrote this in response to article about a couple of umemployed sub-prime mortgage broker agents.
It’s called a Ponzi scheme and it works as long as you have new suckers to keep feeding the scheme. Well folks every scam has a beginning, a middle, and an end. We are at the end! Now is the time that all the suckers look around and ask where the money is. In a Ponzi scheme this big there are a ton of losers but there are also some winners. Now the winners are going to claim that they had no idea it was a Ponzi scheme therefore they shouldn’t have to give any of the money back. The key term here is plausible deniability, it’s also called being too dumb to know any different. This little card can work out pretty well if played correctly but in a mess this big we can usually sort the innocent out by how broke they are. And by broke I don’t mean that they maxed out their credit cards, home equity, and personal loans so that they could live like pagans. No my friend the best defense against this sort of behavior is poverty. The kind of poverty that can only occur when you have sold just about everything you own save the clothes on your back to pay your creditors. A $10,000 dollar a month budget with a Corvette in the garage and a view of the ocean is not poverty so save that shtick for somebody else. For all the ‘victims’ of this scheme, and I’m not talking about the homeowners who took out loans they could never pay back and now want to feign ignorance, rest assured there will be retribution. Anytime there is a Ponzi scheme this big some people do go to jail. Quite a few small time lenders will most assuredly do time over this. And yes one or two big fish are going to fry. If I was the gentleman in charge of Countrywide, or at some of the other repeat offenders, I would be shopping around for some expert legal counsel with the millions I raked off this little operation. For those of you who still don’t get it I am reminded of the Soprano’s episode where Tony was bankrupting a childhood friend over gambling debts. I can’t remember the exact dialogue but when Tony’s buddy finally realizes what’s happened he turns to him and asks ‘why?’ Tony replies ‘that’s just how it is, that’s how these things work’. Then he says something else; he says ‘hey, you came to me!’ Yes Tony, they really came to you this time.