"synthetic credit portfolio". Fantasy finance at its best! Why is this nonsense still being allowed to go on?
I suppose any discussion would have to include the Democrats as well as the Republicans for being complicit in failing to enact, or at least push for, regulations with teeth to prohibit and criminalize this fraud on the American people. But that's probably a no-no. Alas!
But, moving on....
The best all-around reference volume one could own, IMO, to make sense of all this, is a little paperback titled, "The Looting of America" by Les Leopold. I refer to it frequently. Mr. Leopold is not an economist, but confesses to having "a morbid curiosity about exotic financial instruments" for the past few years. Having decided to try to make sense of it all for the layperson, he concludes his introduction with, "...if I can understand this crap, so can you."
In that regard, his narrative of how five school districts in Whitefish Bay, Wisconsin, lost their shirts to the kind of "crap" Jamie Dimon promotes is truly horrifying.
Anyway, these synthetic derivatives consist of insuring something that you don't even own. It's not called 'insurance' of course, because the insurance industry is, well.....regulated. Imagine that!
As I understand it, you can't insure something in which you don't have a material interest; say, someone else's home. If one hundred people could buy fire insurance on your home, there would likely be a suspicious fire at some point. The insurance company would be paying multiple claims and you would be homeless. But for Mr. Dimon, this all works out quite well. Until it doesn't, of course. Then the taxpayer can foot the bill.
Jamie Dimon belongs in prison. For the rest of his life would be ok with me. What's wrong with our justice system?
I guess that's a rhetorical question.
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