The simple definition of a "confidence trick" is: "A confidence trick, confidence game, or con for short is an attempt to intentionally mislead a person or persons (known as the mark) usually with the goal of financial or other gain. The confidence trickster, con man, scam artist or con artist often works with an accomplice called the shill, who tries to encourage the mark by pretending to believe the trickster."

Wall Street is perpetrating a confidence trick on investors around the world, and the major ratings agencies are playing the role of a shill.

Let me explain.

First and foremost is the conflict of interest. If a judge were to hear a case involving criminal charges against a relative, say a niece or nephew, it would be a terrible conflict of interest. Obviously, he'd have to recuse himself from the case due to a conflict of interest.

Here's the problem: all ratings are currently bought and paid for by the very companies that are being rated — and as that money flows into the accounts of the rating agencies, it creates a conflict of interest in the ratings process from start to finish.

He who pays the piper chooses the tune.

In this case, it is the very companies who are seeking the ratings that are paying for those ratings. This is a monumental conflict of interest. It has been that way for years, and the con has gone on for many years as well.

But it's likely the con will soon be coming to an end.

The major ratings agencies are more than willing to play the role of shill for the large Wall Street firms, for a price, of course. And it was an incredibly profitable setup. The problem is that both Wall Street and the ratings agencies got away with this game for so long that they have become incredibly bold in the last couple of years.

Their greed will be their downfall.

If a chief financial officer of a corporation is engaged in embezzlement, and intends to tap into this illegal income stream for many years, that may be possible to do if he is skimming 1% or less of the company profits. That amount can sometimes be well hidden.

But if he ups the level of embezzlement to 10%, 20%, 30% and more, it will be his downfall as the amount of missing money is so large in proportion to the cash flow that it will become glaringly obvious.

In like manner, Wall Street and the major ratings agencies have allowed their greed to spur them to much, much greater heights of arrogance in their confidence game.

It is becoming glaringly obvious that neither cares one bit about maintaining investor confidence so that the game can continue. When watching their actions, it is painstakingly clear that they are trying to siphon as much money from the financial markets as quickly as possible, and are not attempting in any way whatsoever to maintain the semblance of "integrity" in the current system (flawed and corrupt as it is.)

The evidence is in the bundled debt assembled by Wall Street firms and given the prestigious "AAA" ratings by the corrupted ratings agencies.

A risky mortgage is a risky mortgage, no matter how much company it has, and no mater what Wall Street or the ratings agencies say.

A bundle of 100 risky mortgages is no less risky than those same mortgages standing alone, apart from each other.

Risk is risk, and the action of packaging all the risk together does not eliminate the risk.

As mere shills for the Wall Street firms, the major ratings agencies are trying to tell investors otherwise.

This will bring about their ultimate destruction.

Bundles of subprime mortgages, option-ARMs, and Ninja (No INcome, no Job, no Assets) loans are being packaged up by the giant Wall Street firms into CDOs (collateralized debt obligations) and given the highly-coveted, but highly-laughable (in this particular instance) rating of "AAA."

Wall Street does not care about the quality of the loans they are bundling. They simply want as many as possible in order to earn as much in fees as possible.

If a "subprime" borrower is working at Wal-Mart earning $22,000 per year, there is no way in the world he can afford a $400,000 mortgage, even if it is does come with an "teaser" rate of 1% or less, or a negative amortization for the first year or two in order to keep the payments artificially low (and just barely within his ability to pay.)

One subprime loan of this nature does not eliminate the risk of another. Bundling 100 or 1,000 of them together into CDOs does not minimize the risk of default one iota.

The thought that bundles of these extremely, extremely risky loans could be given the highest investment grade on the planet is not just mind-boggling, it should be considered a criminally fraudulent act.

It isn't yet, but the day will come when I believe it will be.