“TBTF”,Banks; Bad Business decision, or Fiduciary Violation?

SO WHERE IS THE MULTI TRILLION DOLLAR CLASS ACTION LAW SUIT ?

People are still suffering losses. IT ALL WENT WRONG-when the banks violated their fiduciary duty and abandoned their rights, no their obligation to “protect the asset”
Fraudulent mortgage loans do not, can not and will not cause “systemic failure” or “total collapse of the monetary system” .
The mortgage system is not flawed because it is based on lending against an asset; an asset that the lender has a fiduciary obligation to protect. As long as the lender can reclaim the asset, even if at 50% of its original value, the lender will be able to recover over time. (If at 6%; 12 years.)
The “suckers” were the Buyers of the MBS’s. The scheme collapsed when they discovered the banks and their insurers no longer could pay back the money they paid for the so-called ultra safe investment. The future interest income from the mortgages was what securitized the MBS’s—NOT THE LOANS. The banks could not sell them the loans; they didn’t even own the money they printed to make them.
In order to make trillions of dollars in present time profits, they sold and got cash for tomorrows money-the Net Interest Income.
Mortgages were not supposed to be for banks to profit trillions of dollars; then in turn make trillions of profits for financial corps, they were supposed to be for helping people buy homes.
IT ALL WENT WRONG-when the banks violated their fiduciary duty and abandoned their rights, no their obligation to “protect the asset”
To keep the ‘suckers’ buying they gave up the right to foreclose (their protection of the asset) to “the upper tiers” buyers of the investment-the MBS ! Giving up “our protection” and turning that protection over to the MBS’s buyers.
This violation caused the loss of trillions of dollars of “the people money”.
This violation was the cause of the Feds giving the money to the banks to prevent the “systemic failure” or “total collapse of the monetary system”. The loans would have cured themselves but they (banks) could not return the trillions they they spent as profit from the sale of the MBSs. And more important, the Fed could not purchase and restructure the mortgages thereby destroying the future income receipts. The “systemic failure”, “total collapse of the monetary system” could have occured if the ‘people’ were told that the banks and insurance companies were insolvent.
WITNESS : SHEILA BAIR,”How could things have deteriorated so quickly…? In a word, securitization.
…Working with a Wall Street investment bank, the issuer packages the mortgages together into ‘pools’ and divides the right to the cash flows of these mortgages into securities that are sold to investors…”“…but they can’t get the mortgage notes written down to affordable levels for contractual reasons….” Quote Sheila Bair ,
(Former FDIC Chairman appointed in 2006(“BULL BY THE HORNS”) THE KEY WORDS BEING, “… the right to the cash flows of these mortgages into securities that are sold to investors…” These contracts allowed the investors to take away the rights of the lenders to modify the mortgages: they sold “the cash flows” for cash . How could they get back the trillions of dollars they already spent so they could repurchase the MBSs ?
The Fed would have been able to “fix” the modification problem with simple strokes on a computer: Allow all to stay at market value, with loans at 3% for 40 years,period. 85% would stay, the other 15% would become welcomed ‘short sales’. END OF CRISES, stabilizing the housing industry, saving millions of jobs and even creating more jobs. But if they were to reveal the banks made trillions of profit by selling-future interest income and would have had to return that money; the banks would have crashed. The banks would be provn that they were insolvent. Also, the Insurance industry would have “failed” because they were also insolvent, that is also they could not “pay out the trillions needed to cover the banks insured losses.
The banks made a fatal error in that they turned over to the investors all control over the performance of the basic asset..with total disregard of their fiduciary duty- thereby making it impossible for the TBTF” banks to make good on their “representations”. The only way available for the Fed was to “make the banks and the insurers whole”. Return the trillions they took since it was discovered that not only were they not of “good faith and credit” but also the insurers they paid were also not of “good faith and credit”. Has anyone asked ,why the Fed purchased almost $1 trillion of MBSs instead of the mortgages ?
Because the mortgages were not the problem and such a purchase would have been even more disasterous because the buyers of the MBS would see their purchases go to zero as there would be ZERO future interest income for them. And the Fed would have exposed-we are in a system that is flawed and could result in catastrophic failure.
Please feel free to correct any errors and any profound wisdom is welcomed.
” … “Believe nothing merely because you have been told it…But whatsoever, after due examination and analysis,you find to be kind, conducive to the good, the benefit,the welfare of all beings – that doctrine believe and cling to,and take it as your guide.”- Buddha
WITNESS : BEN BERNANKE
Former Federal Reserve Chair Ben Bernanke joined practically everyone in America by saying in his new memoir, The Courage to Act, that more Wall Street executives should have gone to jail for criminal misconduct that led to the financial crisis.
“It would have been my preference to have more investigation of individual action, since obviously everything what went wrong or was illegal was done by some individual, not by an abstract firm,” he wrote.”The mortgage securitization process that fed the housing bubble and generated the financial crisis also led to widespread foreclosure fraud, and in April 2011, the Fed, along with the Office of the Comptroller of the Currency, issued enforcement orders against ten major banks over “misconduct and negligence related to deficient practices in residential mortgage loan servicing and foreclosure processing.”
WITNESS FEDERAL RESERVE AT JACKSON HOLE 2016:
“The apparent consensus at (2016) Jackson Hole:
Quantitatively, an enormous overhang of mortgages and their containerized relatives, mortgage-backed securities, needed to be taken from the market to give that fundamental sector of the US economy a chance to recover from the disastrous excesses of pre-Crisis governmental housing policy, compounded by massive irresponsible behavior of financial institutions that had climbed upon the housing bandwagon.(http://seekingalpha.com/article/4004127-feds-policy-process#comment-)

Please feel free to correct any errors and any profound wisdom is welcomed.
” … “Believe nothing merely because you have been told it…But whatsoever, after due examination and analysis,you find to be kind, conducive to the good, the benefit,the welfare of all beings – that doctrine believe and cling to,and take it as your guide.”- Buddha
WHO REALLY SAW THIS COMING?????
Did Frederick Soddy see that coming in 1932? Quote from ‘The Role Of Money”-“…
(This book) is concerned
less with the details of particular schemes
of monetary reform that have been advocated
than with the general principles to which, in the
author’s opinion, every monetary system must at
long last conform, if it is to fulfil its proper role
as the distributive mechanism of society. To allow
it to become a source of revenue to private issuers
is to create, first, a secret and illicit arm of the
government and, last, a rival power strong enough
ultimately to overthrow all other forms of
government.”
“There never was an idea stated
that woke men out of their stupid indifference
but its originator was spoken of as a crank.”
— Oliver Wendell Holmes, Sr.
(1809-1894) American Poet
.*** BUT, why not read and challenge a Noble Laureate for Physics and challenge ? ******Excerpt from http://en.wikipedia.org/wiki/Frederick_Soddy
“In four books written from 1921 to 1934, Soddy carried on a “quixotic campaign for a radical restructuring of global monetary relationships”[this quote needs a citation], offering a perspective on economics rooted in physics—the laws of thermodynamics, in particular—and was “roundly dismissed as a crank”[this quote needs a citation]. While most of his proposals – “to abandon the gold standard, let international exchange rates float, use federal surpluses and deficits as macroeconomic policy tools that could counter cyclical trends, and establish bureaus of economic statistics (including a consumer price index) in order to facilitate this effort” – are now conventional practice, his critique of fractional-reserve banking still “remains outside the bounds of conventional wisdom”[this quote needs a citation]. Soddy wrote that financial debts grew exponentially at compound interest…”
http://archive.org/stream/roleofmoney032861mbp/roleofmoney032861mbp_djvu.txt“The Role Of Money”
(Entire book as a free download)

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