Bear-Stearns Traders Knowingly Selling Investor 'A Sack Of Shit': Lawsuit from 2008 Now Made Public

From Atlantic Magazine biz page:

Former Bear Stearns mortgage executives who now run mortgage divisions of Goldman Sachs, Bank of America, and Ally Financial have been accused of cheating and defrauding investors through the mortgage securities they created and sold while at Bear. According to e-mails and internal audits, JPMorgan had known about this fraud since the spring of 2008, but hid it from the public eye through legal maneuvering. Last week a lawsuit filed in 2008 by mortgage insurer Ambac Assurance Corp against Bear Stearns and JPMorgan was unsealed. The lawsuit's supporting e-mails, going back as far as 2005, highlight Bear traders telling their superiors they were selling investors like Ambac a "sack of shit."

Denninger has been on top of this all along, alleging that the frauds originate at the very beginning of the process--the creation of the individual mortgages themselves. Little wonder that so much of the paperwork has gone missing...

OS is no financial whiz, no economist.

But he does know this: If you bleach all the trust out of a culture, where no one has any idea whether or not he is dealing with an out-and-out crook--things grind to a halt. Perhaps slowly, but inevitably.