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You're lacking in creativity. It shouldn't be too hard to put a face to the victims: take a look around you. This kind of disparate fraud impacts all of the no

You're lacking in creativity. It shouldn't be too hard to put a face to the victims: take a look around you. This kind of disparate fraud impacts all of the non-beneficiaries. That includes me, you, your aunt and uncle, etc. etc.

asdfasgasdgasdg 8y ago
In fact, I pointed out the exact effect you mentioned: that this fraud caused diffuse losses. It's well documented that most humans have trouble feeling empathy in the face of statistical harms, so in that sense I'm just a normal person. It has nothing to do with creativity or understanding. I am comfortable with my emotional stance on this article. Also worth noting that, broadly speaking, the same general class of folks harmed by this practice were also helped by other "bank errors" in their favor. (By that, I mean the wealthy. People who can afford to be shareholders in banks.) So it's doubly hard to feel bad, since, by and large, the wealthy have never been doing better.
- arthurofbabylon 8y ago
  You're "normally" devoid of creativity? Your second paragraph: you relate "general class of folks harmed by this practice" (ie everyone) with "the wealthy" ...? Can you explain that, I'm a bit confused.
  - asdfasgasdgasdg 8y ago
    Yes. Almost anyone who has enough capital to consider owning MBSen (or interest in entities that transitively own MBSen) would be in the top 20%ile of wealth, at least. And in terms of exposure, naturally, as you have more wealth, you're more exposed to wealth destruction. So the big losers were mostly members of the top 1%. But it is my contention that the top 1% are doing quite well. You do not need to feel bad that a handful of their bets paid off poorly, any more than you should feel bad upon hearing that the eventual winner of a poker tournament lost a hand at the first table.
    - lotsofpulp 8y ago
      There is no evidence of who lost money, and it very well could have been taxpayers through the various bailouts. There is also a significant societal loss when trust is no long assumed in transactions. In the US, you are fortunate that you can trust the money you get is not counterfeit, the documents you sign are legal and have force in court, the court’s officers are not bribeable, etc. But if you start chipping away at this trust, it’s 10x harder to earn it back, and in my opinion, once it reaches a tipping point, enough people figure out its every man for himself and gaming the system snowballs irreversibly. Then you have a system like many poor countries, where you have no idea when you could be dragged into court and bled dry because someone disputes your claims and you don’t have the political (bribes/connections) clout to defend yourself.
      - asdfasgasdgasdg 8y ago
        > There is no evidence of who lost money, and it very well could have been taxpayers through the various bailouts. The taxpayers did not lose money in the bailouts . . . they didn't get acceptable risk-adjusted returns, but they didn't lose money.
        lotsofpulp 8y ago
        It's the same thing. Warren Buffett got a great deal, Blackstone got great deals, anyone with cash at the time got better returns (equity) than taxpayers. Why shouldn't the taxpayers have been similarly rewarded?
- intended 8y ago
  Man, when people get inured to out and out corruption in America, and not some third world country, you know its bad. The most likely answer though is not a lack of creativity - because its very hard to imagine the harm caused by these, relatively, arcane legal instruments. There is a harpers article linked in the story, it should be illustrative of the clear harm being done to normal people, and how corporations made a calamitous end run around legal procedure - the same issue which is happening today (the "two-fer" paragraph). If you need faces, realize that people were foreclosed on when they should not have been, those deeds were NEVER legally owned by the banks because the banks and their intermediaries didn't follow up on the paper work. Yet those people got evicted, and banks claimed ownership. An economy is largely predicated on working systems of assessment and legal redressal, more so for First World economies. And this happens because, as you said, its hard to imagine the harm being caused.
  - scatters 8y ago
    > people were foreclosed on when they should not have been That's not what happened here, though; the homeowner managed to avoid foreclosure despite not servicing the mortgage, precisely because the banks messed up the paperwork. There are victims in the overall saga: people who were missold mortgages that they were never going to be able to service, at rates higher than they were entitled to, who lost their savings as a result. But they don't feature in this story.
    - intended 8y ago
      Right, this is NOT that story, and I am not saying it is. But that story has been written, as have pages upon pages of what happened. Reading through it all and being well informed will likely be the realm of a few people, the best we can hope for is to be directed to other resources.
- pc86 8y ago
  It costs $71 to buy a share of Citi right now. Less than half that for Bank of America. You don't need to be wealthy to have a financial interest in the financial sector. You need only to have a retirement plan.

asdfasgasdgasdg 8y ago

In fact, I pointed out the exact effect you mentioned: that this fraud caused diffuse losses. It's well documented that most humans have trouble feeling empathy in the face of statistical harms, so in that sense I'm just a normal person. It has nothing to do with creativity or understanding. I am comfortable with my emotional stance on this article. Also worth noting that, broadly speaking, the same general class of folks harmed by this practice were also helped by other "bank errors" in their favor. (By that, I mean the wealthy. People who can afford to be shareholders in banks.) So it's doubly hard to feel bad, since, by and large, the wealthy have never been doing better.

arthurofbabylon 8y ago
You're "normally" devoid of creativity? Your second paragraph: you relate "general class of folks harmed by this practice" (ie everyone) with "the wealthy" ...? Can you explain that, I'm a bit confused.
- asdfasgasdgasdg 8y ago
  Yes. Almost anyone who has enough capital to consider owning MBSen (or interest in entities that transitively own MBSen) would be in the top 20%ile of wealth, at least. And in terms of exposure, naturally, as you have more wealth, you're more exposed to wealth destruction. So the big losers were mostly members of the top 1%. But it is my contention that the top 1% are doing quite well. You do not need to feel bad that a handful of their bets paid off poorly, any more than you should feel bad upon hearing that the eventual winner of a poker tournament lost a hand at the first table.
  - lotsofpulp 8y ago
    There is no evidence of who lost money, and it very well could have been taxpayers through the various bailouts. There is also a significant societal loss when trust is no long assumed in transactions. In the US, you are fortunate that you can trust the money you get is not counterfeit, the documents you sign are legal and have force in court, the court’s officers are not bribeable, etc. But if you start chipping away at this trust, it’s 10x harder to earn it back, and in my opinion, once it reaches a tipping point, enough people figure out its every man for himself and gaming the system snowballs irreversibly. Then you have a system like many poor countries, where you have no idea when you could be dragged into court and bled dry because someone disputes your claims and you don’t have the political (bribes/connections) clout to defend yourself.
    - asdfasgasdgasdg 8y ago
      > There is no evidence of who lost money, and it very well could have been taxpayers through the various bailouts. The taxpayers did not lose money in the bailouts . . . they didn't get acceptable risk-adjusted returns, but they didn't lose money.
      - lotsofpulp 8y ago
        It's the same thing. Warren Buffett got a great deal, Blackstone got great deals, anyone with cash at the time got better returns (equity) than taxpayers. Why shouldn't the taxpayers have been similarly rewarded?
intended 8y ago
Man, when people get inured to out and out corruption in America, and not some third world country, you know its bad. The most likely answer though is not a lack of creativity - because its very hard to imagine the harm caused by these, relatively, arcane legal instruments. There is a harpers article linked in the story, it should be illustrative of the clear harm being done to normal people, and how corporations made a calamitous end run around legal procedure - the same issue which is happening today (the "two-fer" paragraph). If you need faces, realize that people were foreclosed on when they should not have been, those deeds were NEVER legally owned by the banks because the banks and their intermediaries didn't follow up on the paper work. Yet those people got evicted, and banks claimed ownership. An economy is largely predicated on working systems of assessment and legal redressal, more so for First World economies. And this happens because, as you said, its hard to imagine the harm being caused.
- scatters 8y ago
  > people were foreclosed on when they should not have been That's not what happened here, though; the homeowner managed to avoid foreclosure despite not servicing the mortgage, precisely because the banks messed up the paperwork. There are victims in the overall saga: people who were missold mortgages that they were never going to be able to service, at rates higher than they were entitled to, who lost their savings as a result. But they don't feature in this story.
  - intended 8y ago
    Right, this is NOT that story, and I am not saying it is. But that story has been written, as have pages upon pages of what happened. Reading through it all and being well informed will likely be the realm of a few people, the best we can hope for is to be directed to other resources.
pc86 8y ago
It costs $71 to buy a share of Citi right now. Less than half that for Bank of America. You don't need to be wealthy to have a financial interest in the financial sector. You need only to have a retirement plan.