Rise of the Bezzle (how corruption& thievery killed our markets)

canadianbusiness. ^ | Jeff Sanford

[dennisw]

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[George Smiley]

Good post from 2005 explaining the origin of the term "bezzle".

I had never heard of it until I started reading Karl Denninger's musings at market-ticker.org.

[TigerLikesRooster]

Ping!

[George Smiley]

I recall "mortgate pools" back in the mid-Eighties when I was in corporate trust banking.

These were "bundles" of mortgages that were bought and sold by financial institutions.

We didn't VALUE them, but we did serve as custodian for the actual documents.

And we'd get notifications that a given mortgate had been paid off; we'd remove it from the pool, and, in some instances, be given another mortgage with which to replace it.

If all the mortgates in a given pool were paid off, that particular pool would be retired.

[dennisw]

Good post from 2005 explaining the origin of the term “bezzle”.
I had never heard of it until I started reading Karl Denninger’s musings at market-ticker.org.
____________________

Yeah I was lead to this by a Denninger post today by TigerLikesRooster. Bezzle means embezzlement and also scams and highly remunerative corruption. It grows as the bubble reaches the point where it bursts

The worst sub primes were manufactured at the end of the real estate bubble. Same for the most toxic CMOs...came at the end.

[Travis McGee]

[dennisw]

I recall "mortgate pools" back in the mid-Eighties when I was in corporate trust banking.

These were "bundles" of mortgages that were bought and sold by financial institutions.

We didn't VALUE them, but we did serve as custodian for the actual documents.

And we'd get notifications that a given mortgate had been paid off; we'd remove it from the pool, and, in some instances, be given another mortgage with which to replace it.

If all the mortgates in a given pool were paid off, that particular pool would be retired.

This sounds like a very honest approach that was corrupted as the years went by and the real Harvard/Ivy League financial engineers came into Wall Street's system. To hammer these into wild derivatives that were rushed out the door and foisted upon the (mostly) unsuspecting

[dennisw]

John D Rockefeller used to hand out silver dimes during the Depression. I think a steak dinner was a quarter or less back then

[April Lexington]

I recall "mortgate pools" back in the mid-Eighties when I was in corporate trust banking. These were "bundles" of mortgages that were bought and sold by financial institutions. We didn't VALUE them, but we did serve as custodian for the actual documents. And we'd get notifications that a given mortgate had been paid off; we'd remove it from the pool, and, in some instances, be given another mortgage with which to replace it. If all the mortgates in a given pool were paid off, that particular pool would be retired.>/i>

With all due respect, you were a paleo banker. Your successors figured out how to turn these pools into securities and get every banker in the world to buy these things instead of doing the druge work you were doing in identifying solid credit risk and lending for the spread. Life was good and banks were safer when you were in that space.

[Travis McGee]

Just remember the first rule of bank runs:

Get there first!

[EggsAckley]

*ping*

[ASOC]

Thanks for posting this very cogent article.

Add me to the PING list if you would.

[George Smiley]

I saw the handwriting on the wall during the era of bank mergers; the employment opportunities for trust officers was shrinking and I coincidentally got an offer to lateral transfer into information technology.

As IT was a growth area, I went for it and have been a computer geek for twenty years now and probably make better money than most trust division managers.

[ken21]

interesting.

thanks.

how ‘bout a government “gezzle”?

for the amount of money sucked off of taxpayers by the likes of barney frank, mad max, chris dodd, chucky schumer et al?

[ex-Texan]

I was trying to post a long detailed reply about high level crooks and thieves and corruption. It involved Senator Phil Gramm making ILLEGAL securities legal [Credit Default Swaps] It involved insurance giant AIG going bust, billions in bailout money, allegations of bribery and members of Congress that should be impeached.

I have tried to post that info several times here on FR. Each time I have made the attempt my computer froze up. It seems people in power do not want the bitter truth posted here.

[RedMonqey]

There's an old adage in my family. "If you cannot explain( the basics of) something in the time to drink a cup of coffee,then you're dealing with a fool, a liar, or an "........." " None of which upon any respectable person would wanted to be associated with. Good advice. If these bankers and investors would have followed this old saying they wouldn't be in the mess they dragged the country into.

[dennisw]

SEnd it to me-—freepmail-—— I’ll try and post it

[dennisw]

I was trying to post a long detailed reply about high level crooks and thieves and corruption. It involved Senator Phil Gramm making ILLEGAL securities legal [Credit Default Swaps]

Gramm is the stupidest most evil kind of libertarian...
He helped get Glass Steagell lifted
Also did other things to get regulators off the backs of the thieves of Wall Street
Last I heard he was a paid lobbyist for them

[GOPJ]

Who changed the regulation so loans could be sold after two payments were made? Who changed the regs so people could borrow 125% of the value of their home? Who changed the rules so no taxes were paid on profits if the home was lived in for 2 years? These were all part and parcel of the “bubble”. And that’s not counting the nutty, “everyone should have a home”... that pretended a rental home wasn’t a “home”. Nah, there’s lots of fingers in this pie and most of them go back to Clinton.