My favorite comment at some meetings I was at, on issuing public bonds for large transportation projects that clearly didn't have a credible financial repayment scheme, was from bond salesmen on commission from some big Wall Street names: "there are new realities in the market you don't understand"! As someone with a mathmatical economics degree I usually asked what the ROI was anyhow, and usually got some half assed non answer. Many of my colleagues-public sector planners-even thought it rude of me to ask.

The scheme was to underwrite the dubious bonds on commission (up front, of course), then create credit default swaps (hedge bets without any underlying risk reserves, since they really weren't "insurance" which would legally require regulated risk reserves) package them and sell them as safe "backed by government bonds" instruments. Then these dubious instruments were sold to the unsuspecting school district as "safe" for an immediate commission and bonus. Or worse to the other firms that believed their own hype (there is no fool like a fool who believes his own lies?), then walk away.

As long as nobody asked stupid questions about things like ROI (like me?)and trees continued to grow "forever to the sky"-everything was just fine. No transparency, no regulation, no integrity, and no consequences, since there were actually "bonds" or real mortagages at the bottom of this scheme-so technically it wasn't actually "legally" fraud.

CIT is hardly one of the worst of the culprits, and are now more victims of the collapse on "main street"-the real theives were bailed out early and held harmless-and now it's become too much of a political risk to bail out these folks. The rail investments are practically sound compared to loans for inventories of things like "Crocs" that sit unsellable. It will really hurt cash flow strapped small businesses on "main street" who have been frozen out by the big guys, who are back into speculation based on some of the same nonsense, as we speak.