[Terrapreta] imagine this

[MMBTUPR at aol.com]

          from          Lewis L Smith

Very interesting idea, but how would one monitor the transactions ?   

For individual transactions, it seems to me that the experience of Ebay is 
relevant and that is not exactly salutary.

As for "packages" of credits, we might still have a monitoring problem, even 
if all the credits from a given municipality were "pooled" in some way, with 
guaranteed standards like the mortgages in the highly successful GNMA pools.

In this regard, I recall the Allied soybean oil scandal in days when I was 
even younger than I am now !   A man claimed to have soybean oil in tanks in New 
Jersey and sold participations in the oil at a time when its price was 
rising. Only in many cases the tanks were mostly filled with water with a little oil 
floating on top. People got so swept up in speculating in and trading 
participations that many of them never sent anyone to check out the tank farm where 
their "oil" was supposedly stored. The rest is history. The perpetrator went to 
jail, but a lot of people never even got their money back.

And nowadays of course, we have the subprime scandal. In this case, fraud has 
probably been committed in at least a third of the cases where the mortgagee 
has become delinquent within one year. And banks in Europe [ supposedly 
fiduciary institutions ] have been left holding worthless mortgages on houses they 
have never seen and whose owner they don't know how to find.

In Spanish, we have a saying, "Mucho hojo al pillo", which can roughly be 
translated as "Keep a big eye open for the crook"   [ who may be marauding near 
by. ]

Cordially.   ###






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