I paid my tab at heidi's.

I think it actually was worse than the example posted. Many along the pathway handeling those instruments had to know this was seriously questionable if not fraudulent in nature.

One government argument against serious prosecution is that might limit their future creativity. Or it might paint wall street as it really is. The whole issue rotates basically around implied easy credit to non qualified high risk borrowers..Same effect as mentioned in the posted example.

Everyone picks up there respective commisions up front when this is all going on. They never lose anything. As also implied the taxpayer in general takes the loss.

You almost have to wonder if all these things where calculated in advance. Since the eventual end of this behaviour was not subjective. They well understood even initially it had to collapse in some fashion at some point.