Just five years ago, ten percent of American adults were reported victims of financial fraud.
In 2003, the Federal Trade Commission (FTC) conducted a national survey of 2,500 adults to determine the level of consumer fraud in America. The figures were just released in August 2004, showing that more than one in 10 Americans, nearly 25 million adults, were victims of consumer fraud in 2003 (Ibid)
Thieves used the credit card system to bilk billions from banks and card holders. The credit card industry absorbed billions of dollars worth of hijacked card use, but, one must ask: who finally paid those bills?
Who pays the bills for the seemingly endless bailouts for the companies who are considered "too big to fail?" Who pays the freight for the "sour debts", bad deals, and loans gone wrong?
Where is the money going to come from? Most importantly, how can risk be gauged for an industry that has created debt out of instruments for which there has never been a valutation? How can we measure the loss of something if we don't know how much it was worth in the first place? How can risk be assessed if we don't know the risk factors?
The (Wall Street) Journal says the fresh $10 billion bill is particularly challenging because the terms of the current $150 billion rescue package for AIG don't cover those debts. The structure of the soured deals raises questions about how the insurer will raise the funds to pay the debts.
Who paid XyP Chain store for the $800 worth of clothing charged on a stolen credit card? Who paid the local greasy spoon when a credit card thief used a stolen card to pay for a meal for a few fellow card thieves? Who paid for the billions of dollars worth of stolen credit cards, misappropriated credit card accounts and bogus charges?
Who paid for the forged mortgages, bogus securitized mortgages, loans with no collateral, loans with no income, loans to people who couldn't afford a bucket to urinate in, nor hold on to the house with the window to empty the bucket?
Who paid for the wild ride on this pirate's express? Look in the mirror.
After years of consumer and institutional fraud, after years of forging loan documents, lying on applications, "manipulating income statements to match loan requirements", after more than a decade of aiding and abetting thieves within the banking and financial services industry and refusing to close security loopholes in the financial data networks, the credit card industry, and the bank and finance industry continue to wrack up debt and losses like a hog gorging itself in a ripe cornfield. Unfortunately for us, we don't know how big the hog's stomach is, or when, or even if, he'll ever get full.
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