I especially like the explanation of the type of fraud that allows banks to continue to report good earnings while they're actually going under.
Basically, as Black explains it, let's say I'm a bank that made a dumb $60m commercial real estate loan to a developer. The developer never makes any money, so he never pays back any part of the loan. Thus I, the bank, am the new owner of a $60m development that's almost certainly not worth $60m.
However, I don't want to eat the loan because it will hurt my profits and I might not get my bonus. So the next time someone darkens the door of the bank, I talk him into taking out an $80m loan to buy my worthless development for $78m and then have $2m "walking away money." Now, I've kicked the can down the road because 1) I sold the property at a profit and 2) the new owner of the development can use some part of his $2m to service the debt for a little while.
During this time, of course the bank is in even worse objective shape (since it's now loaned $80m against the same property we know wasn't even worth $60m) but I can continue to collect bonuses and possibly even stave off regulators if they don't stick their noses too far up into my business.