The Mortgage Industry's "Invitation to Fraud"

60 Minutes had a revealing story on tonight about the "epicenter" of the housing bust. Particularly noteworthy was their description of the mortgage industry's bonfire of avarice, before its implosion:

Almost all of the people involved in the transactions made huge amounts of money, then passed the risk onto someone else. Instead of keeping the dicey loans in their own portfolios, the big banks and giant mortgage companies that originally underwrote them, resold the mortgages to big New York investment houses.

Firms like Bear Stearns and Merrill Lynch sliced the loans into little pieces and packaged them up with other investments, then sold them to their best customers around the world as high-yield mortgage-backed securities, turning sows' ears into silk purses, all with the blessing of rating agencies like Standard & Poor’s.

"At every step in the way, somebody has his or her hand out, getting paid. And everyone, for the time, is happy. The broker got paid. He or she was happy. The lending officer, ditto. The rating agencies got paid for passing judgment on these securities. They, too, were pleased, and their stockholders were happy."

Incidentally, the two investment firms mentioned in the story are also in the list of top contributors to Hillary Clinton's campaign, each giving over $100,000 to Senator Clinton.