Curious about the bonuses. Does it seem to anyone else

[Horse with no Name]

like a giant money-laundering scheme?

Good money in-->toxic assets purchased--->bailout money

In the middle of ALL of this is real estate.

Where is the real estate that is considered toxic? Does it REALLY exist? If it does, why not work on community outreach projects to house the homeless or award to people wishing to start small businesses? If it doesn't exist, then can't we get the bonus money PLUS back from "the best and the brightest" under existing racketeering laws?

[dkf]

1. I don't think the real estate is considered toxic, its the

artificial derivative that was created out of mortgages that is toxic.

[Horse with no Name]

2. Perhaps it is simplistic thinking

but somewhere in the pile of horseshit is a pony.
Can't we find the pony and make good use of it?

[Warpy]

3. Toxic real estate exists in former boom markets

like urban California, Phoenix, Las Vegas, and much of Florida. The toxicity comes from having a speculative bubble pop, leaving people owing considerably more on the mortgage than the property is now worth, meaning these people are more likely to default on their mortgages just to get out from under. The real estate will never be worthless. What's worthless are the bets placed on whether or not the mortgages will be paid.

Our whole financial system devolved into a racket as worker bees were required to generate unrealistic returns for people who'd gotten too used to them during the dotcom bubble.

Toxic assets are something else entirely, exotic paper that guaranteed generous returns but had no intrinsic value. The upper reaches of the financial industry devolved into a gigantic casino with bets being placed on bets and all of it stuck in asset columns. Since these "assets" had no real value and represented nothing but bets, institutional investors like banks, insurance companies, pensions and even states and countries are now finding out they're broke.

As for those bonuses paid to the thieves who created all this, my reading suggests they were mostly paid overseas. Good luck to us and the Red Sox getting them back. However, the furor might discourage other corporations from giving bonuses out in the open.

[KharmaTrain]

4. The Tip Of The Iceburg...

The dirty secrets of many of these schemes are sure to come to light. For example Madoff and Alan Sanford's connections to drug cartels that provided lots of cash into these schemes and a convenient way to launder their money.

The real estate isn't what's toxic, it was how the deals were done. It was the selling and reselling of mortgages, each time the seller making a profit and driving up values that put those values way out of whack with reality...houses that were only worth $100k 10 years ago would be worth 250k a couple years later...something there just didn't smell right, and now we know why. It was all this gambling that was predicated on a hot housing market, once it cooled, the bubble burst. It was the deals, not the land that is toxic.

That said, unfortunately there are properties that are "toxic"...and have been for years and decades. Those are areas in our cities...neighborhoods void of any major employer or source of jobs...that has been allowed to run down and sit as vacant lots and desperation. I'd love to see some "stimulus money" go into encouraging the long-needed revitalization of the industrial sector that will create jobs and then help raise ALL property values.

We're just unraveling 30 years of dirty secrets...my hopes are some of those "best and brightest" who jobbed the system to the point of collapse are held accountable...either criminally or kept from ever dealing with any large sums of money ever again.

[lilgayghostgirl]

5. De-regulation at its finest...

[Skink]

6. The black market peso exchange.

sounds way more sinister then money laundering. Probably why you never hear about it.

[DCKit]

7. It's not the real estate, it's the swaps and all the other BS they pulled.

People are slowly beginning to realize that the banks, hedge funds and Wall St. sold the same assets several times and, each time, at inflated prices.

Massive fraud was committed and the government is only beginning to go after the perps.

[Horse with no Name]

8. then why can't we recover the bonuses and personal assets through

racketeering laws?

[DCKit]

9. You're preaching to the choir Horsey.

Even the Republics changed their tune (on the bonuses) when it finally sank in just how angry we are. The Congress, on whole, just isn't scared enough of us... yet.