Janet Tavakoli shares a presentation she prepared for the Federal Housing Finance Agency Supervision Summit earlier today, in which she attempts to explain to politicians how banks made fraud into a "business model" and how the damage can be repaired. It may not be easy: as she says, MBS became a "widespread interconnected ponzi scheme" - "Securitization professionals at several financial institutions knowingly bundled fraud riddled loans into RMBS. New investors needed to pay-off old investors. To delay being busted, they escalated and sped up the fraud. This required more “complexity” and the involvement of more cronies. Many CDOs and virtually every CDO-Squared were more fraud to cover-up fraud." Of course, the same can be said about the global economy, as now everyone is aware that the global Keynesian system is nothing less than Madoff's scheme taken to the infinite degree. But nobody will ever go to jail for that. For any remaining questions on the motives, the schemes, the payoffs, and, most importantly, the players, both the protagonists and the bribed co-stars, the below presentation attempts to answer all. And, unfortunately, Ms. Tavakoli's suggestion for how to fix this, which is remarkable precisely the same one we have been espousing since our advent, will never happen as it means the end of the Ponzi and the elimination of trillions in generationally stolen middle-class wealth.