Video: Felix Salmon says investment banks face massive legal risk due to the way they built their mortgage bonds. He explains EXACTLY how banks built these bonds - with lies and cover-ups every step of the way.
This is a very, very good clip. Great explanation, excellent detail, and it runs only 2 minutes. Don't skip the last 30 seconds and Salmon's conclusion.
Story background:
80% of Citigroup's mortgages were defective
Chris Whalen Explains Foreclosures, Loan Put Backs & Bank Risk
David Faber: Mortgage Put-Backs Don't Require Fraud Just Inaccuracy
---
Salmon writes:
I’ve been getting a lot of good feedback about my post yesterday on the way in which just about every major investment bank in the world might have huge legal risk surrounding the way that they built their mortgage bonds. The stock market in general might be relatively sanguine about the mortgage mess, but bank stocks are falling, and I suspect that the worst is yet to come. Certainly the tail risk to the banking industry as a whole is as high as it’s been since TARP was first unveiled.
---
---