The layer upon layer of deception, financial sleight of hand and outright fraud that is the subprime mortgage scandal is  being peeled away. In its current issue, Vanity Fair reports that some on Wall Street are calling it the "greatest financial scandal in history"!! And they do mean great — some of the banks involved profited at a rate of 40% every two months.  

As two-bedroom condominiums in Manhattan continue to sell for $3 million apiece and the  Fed wades in to relieve investors a shout of UNFAIR echoes across the country. But it is hard to know who, if anyone, at the top is listening. 

And while we’re talking about those at the top…The folks who are supposed to be regulating this business —  the Bond raters — Fitch, Moody’s and Standard & Poor’s didn’t just ok, they gave the coveted AAA rating on loans they knew were way subprime. In fact they invented a whole new type of debt and gave it a fancy new name: securitized debt obligation. Worth less but sounding good. And then they gave that their AAA rating.  

AAA is AAA, right? Wrong. And there’s more. There are supposed to be blinders to prevent conflict of interest — they gave up on all those –and thought plenty about their own profits as they rated securities.

One analyst at the credit ratings agency was blunt: “Let’s hope we are all wealthy and retired by the time this house of cards falters.” In a December 1996 email — Did you hear that? 1996. The information’s disclosed in a blistering report out this week from the Securities and Exchange Commission.

Sadly it’s not just Wall Street’s house of cards, it’s real houses — peoples homes — that are crashing down.

Laura Flanders

Laura Flanders

Laura Flanders, author, and host of RadioNation on Air America Radio, has built a reputation for courageous investigative journalism coupled with compassion and a sense of humor. In writing her last book, Blue Grit, she traveled the country reporting on grassroots success stories and broadcast live to over 150 radio stations from community centers in places including Helena, Salt Lake City, New Orleans, Miami, Las Vegas, and Milwaukee. In her television appearances (Lou Dobbs, Larry King Live,) on radio and in her many books (including Bushwomen: Tales of a Cynical Species) and articles (The Nation and others,) Flanders calls for a new politics of fairness, equality and citizen action. Articulating the human dimension of American communities in trouble, her programs have become destinations for those seeking the skills and the will to make a difference. Flanders is a regular contributor to the Nation Magazine and CNN. Before joining Air America, where she was part of the original lineup, and hosted “The Laura Flanders Show” for three years, Flanders was the founding host of the award-winning “Your Call” weekday mornings on public radio, KALW in the Bay Area and CounterSpin, the radio show of the mediawatch group, FAIR.

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