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|User Info||White Paper: Securitization Is Illegal; entered at 2012-08-03 11:00:36|
Registered: 2010-12-18 Wisconsin
While I can't read the paper in full [yet], it appears the complaints raised aren't so much about the process of securitization as much as they are about how securitization has been implemented by various entities. The implementation part [disclosures, fees, assignment of documents, conflict of interest, etc.] has been a huge problem and has been well documented - but that alone doesn't mean securitization is illegal. It means players who've been doing it have engaged in activities associated with securitization that are illegal [and have yet to be meaningfully prosecuted for it].|
It also doesn't help that investors either were never communicated the risks of holding lower tranches [that goes back to the "people did stuff that was illegal" problem], or knew the risk and plowed in anyway thinking that they had some God-given right to make money whether the investment performed as advertised or blew up in their face [which just points out how some people are stupid and think everything is supposed to make money no matter what]. Either way, that doesn't back up the "securitization is illegal" argument.
Maybe I change that position later tonight when I can finally pull down the document and read it more closely.