Shadow Banking”Let’s explain:

Shadow Banking"Let’s explain: When a bank issues a mortgage, it is required to hold a certain amount of capital against the loan in case of default. But if the bank securitizes the mortgage, that is, it chops the mortgage up into tranches, pools it with other mortgages, and sells it as a bond (mortgage backed security), then the bank is no longer required to hold capital against the asset. In other words, the bank has created money (credit) out of thin air. This is the ultimate goal of banking, to maximize profits off zilch capital.So how is this different than counterfeiting?There’s no difference at all. The banks are creating “near money” or what Marx called “fictitious capital” without sufficient resources, without supervision, and without any regard for the damage they may inflict on the real economy when their ponzi-scam blows up. What matters is profits, everything else is secondary."http://www.counterpunch.org/2012/11/28/shadow-banking/Where is he wrong?