_____
****
Posted on 05/16/2010 2:21:29 AM PDT by Daisyjane69
Day after day, bankers have been paraded before Congressional committees regarding their role in the financial crisis which brought the financial system to the edge of the abyss on September 18,2008. Every one has claimed that they were not responsible in any way for the disaster. They blame once in a lifetime circumstances that no one could have anticipated. It was a perfect storm and they had no way of knowing. These Harvard MBA Wall Street geniuses, who collected compensation in excess of $100 million each before the collapse, had no idea what was going on within their own firms. Ignorance and stupidity is no excuse for losing a trillion dollars. The truth is that the CEO’s of all the Wall Street banks encouraged a casino culture of greed and gambling. The generation of fees became the sole driving incentive for every firm. It started with collateralizing subprime mortgages into packages of mortgage backed securities. Then they created Credit Default Swaps as insurance on these mortgages. When they ran out of chumps to put into houses, they created side bets with Credit Default Obligations that didn’t require an actual homeowner.
(Excerpt) Read more at theburningplatform.com ...
:(
There was no ignorance ....... only a type of "ignorance of the soul".
Wait for this 'Cap and Trade'/Carbon ripoff.
It will make the other (the financial crisis which brought the financial system to the edge of the abyss on September 18,2008) look like child's play.
____
Beck is all over the CrimeInc./Cap and Trade Vendetta ....... yet the MSM says nothing, which of course means that they are in on it too.
By the way, these same folks are the reason we have a Marxist in the white house. This article is just trying to point a finger at the rich white guys.
I suggest everyone read The Looting of America by Leopold. It explains in detail exactly what we’re experiencing and names names.
(snip) --- As the financial system crashed on September 18, 2008 and the protagonists of the story became rich beyond all belief, there was no joy. They weren’t happy that they had been proven right. They were disgusted by the entire Wall Street culture. Michael Burry shut down his fund in disgust with his ungrateful investors. The system broke and the Wall Street gamblers should have paid the consequences. Instead, the US taxpayer bailed them out. In the twenty years since Lewis had written Liar’s Poker, Wall Street became greedier, nastier, more corrupt, more arrogant and more incompetent. He traced the biggest financial disaster in history back to his old boss John Gutfreund. His decision to convert Salomon Brothers from a private partnership to a public corporation opened Pandora’s Box. The other Wall Street partnerships followed like lemmings. The risk of failure was shifted from the partners to the shareholders and the citizens of the United States. Lewis details this fateful decision:
From that moment, though, the Wall Street firm became a black box. The shareholders who financed the risks had no real understanding of what the risk takers were doing, and as the risk-taking grew ever more complex, their understanding diminished. The moment Salomon Brothers demonstrated the potential gains to be had by the investment bank as public corporation, the psychological foundations of Wall Street shifted from trust to blind faith.
__
(snip) -- “The people in a position to resolve the financial crisis were, of course, the very same people who had failed to foresee it. All shared a distinction: they had proven far less capable of grasping basic truths in the heart of the U.S. financial system than a one-eyed money manager with Asperger’s syndrome. … The world’s most powerful and most highly paid financiers had been entirely discredited; without government intervention every single one of them would have lost his job; and yet these same financiers were using the government to enrich themselves.”
****
Good point.
_____
Maybe a couple of Quaaludes and a shot of whiskey too ..........
STEVE EISMAN – Manager of FrontPoint Financial Services hedge fund, which was owned by Morgan Stanley. During the financial crisis he wished he could have shorted Morgan Stanley. “Even on Wall Street people think he’s rude and obnoxious and aggressive,” says Eisman’s wife. “He has no interest in manners. He’s not tactically rude. He’s sincerely rude. He knows everyone thinks of him as a character but he doesn’t think of himself that way. Steven lives inside his head.” The upper classes in this country raped this country. You fucked people. You built a castle to rip people off. Not once in all these years have I come across a person inside a big Wall Street firm who was having a crisis of conscience. Nobody ever said ‘This is wrong’.” Eisman understood Wall Street thoroughly: “What I learned from that experience was that Wall Street didn’t give a shit what it sold.”
Les Leopold
Les Leopold -
After attending Oberlin College and Princeton University’s Woodrow Wilson School of Public and International Affairs (MPA 1975), Les cofounded and currently directs two non-profit educational organizations: The Labor Institute (1976) and the Public Health Institute (1986). He designs research and educational programs on occupational safety and health, the environment and economics. He is now helping to form an alliance between the United Steel Workers Union and the Sierra Club. This profound work of non-fiction should be required reading for anyone.”
I wouldn’t believe one word he wrote...
http://www.bookbuffet.com/index.cfm/fuseaction/news.article/type/home/article_ID/CC9F503F-7ADC-42D2-8F49C5F5E6616F63/index.cfm
Eisman says …… the single greatest line I ever wrote as an analyst was after Lomas said they were hedged. He recited the line from memory, “The Lomas Financial Corporation is a perfectly hedged financial institution: it loses money in every conceivable interest rate environment. He enjoyed writing that sentence more than any sentence he ever wrote.
____
Yoi.
Apollo, “a country that voted for G W Bush, twice,” and then voted for Obama, “deserves to be f***ed.”
You left out the most pertinent part, considering it was Clinton who started ball rolling. But to be fair, it is the entire generation of post war baby boomers, destined for the dust bin of history, and what a legacy. The same as a swarm of locusts.
(my bold)
It is much more complicated than that. That was just Act One of an ongoing surreal play.
_____
True!
_____
****
While I’m an agnostic on Beck most times, I believe his connecting of the dots on this Cap and Trade is important.
Has NO STAFFER on Capitol Hill pointed any of this out to their bosses? Seriously? I realize members of Congress cannot reasonably be expected to be watching GB while in session but, really they don’t know? Now we have to call their offices to make them watch GB, because he’s the only one doing the job that journalists used to do? WTF.
My mom is a retired newspaper reporter. In a way, I’m glad that at her age, she is slipping a bit. After toiling under editors who lived on coffee and cigarettes (no fancy journalism school, either!) yelling “DEADLINES! We operate under DEADLINE, you lazy scoundrels. I’m not getting any younger or more beautiful!”
I can’t imagine what she would make of this whole thing if she had her faculties, 100%.
Indeed this is the heart of the matter. As much as everyone wants to look around and point fingers at the bankers to unqualified homeowners, the truth is there was an astounding lack of personal integrity in motion at the time. It still exists today and all the investigations, all the bail-outs only compound the problem.
I call it plainly greed. It wasn't just the bankers who gambled on Wall St., it was us too. Some more, some less, but those who put all their nest eggs into 401Ks, etc. took a gamble. Those who took the gamble and then closed their eyes hoping for ladyluck to smile on them, were rudely awakened when they realized the only one who wins if you do that is the house.
It would be nice to be able to just say it was the banker on Wall Street. It would be easy to say that. It would be wrong.
If we didn't understand the investment vehicle, we should have never placed our money in it. No matter what they claimed the return was or how safe. If we didn't understand it, the money should have stayed in our wallet. Greed, was the motivating factor to get our money. One wouldn't go to a store and buy the thingamajig if you didn't know what it was for...why would one invest that way?
So go on point your fingers, but remember to remove the timber from your own eye.
Too busy watching porn, I guess.
The loan papers were NOT classified documents. In a lot of cases they were available on the Internet. Back in 2006, I pulled up a dozen or so in one Florida county. About half of them were with a company I never heard of, called “New Century”. The terms were horrendous - starting interest 3% (or less), then Prime plus 10% after 5 years (in one case), usually Prime plus 6 or 8% (and Prime was at least 4% then). They were for around $300k. I should have shorted them...but was not in the market at that time. New Century collapsed in early 2007 (they were the first) - there was NO WAY those loans could be repaid once the WAY OVERINFLATED Florida market stopped climbing, which actually occurred a year earlier (peak was in Summer 2005). I did manage to short Countrywide and ride them all the way down, and rode down a number of others (but not all the way down - I got cold feet). It amazed me that I could get into the stock market so late, and those companies, holding Florida-type loans, were still near their all-time highs.
I only bring this up because, I, a FReeper that has NOTHING TO DO with financial markets (i.e., totally out of my education or work experience) and no special access, was still able to see what was coming. It wasn’t hard, there were local reports in Florida and elsewhere about the types of loans, the failed housing auctions in 2006, and a market that had stopped dead in its tracks (i.e., housing inventory was through the roof, and nothing was selling). But, even as some companies were collapsing, and trillions of dollars were at risk...the stock market pretty much hummed along, and those loans still kept being made, for another 30 months (until August, 2008).
If that was too much, there was some VERY EASY numbers to read - such as housing prices being equal to about 10 times family income in Southern California and at least 5 times in Florida, Nevada, Arizona, and the Northeast (where 3 times is about as high as you want to go), there were “Option ARM” loans were the loan principal actually INCREASED as you made your payments, because the payments were so low they did not even cover interest. In one small town that I’m familiar with, there were advertising $500k houses for $1500 monthly payments. I read the fine print - I guess others didn’t. Stay in that house without refinancing, you’ll be paying $2,500 the second year, and $4,000 per month (after 5 to 10 years). But who cared - you’d just REFINANCE. Except that only works with an inflating market...Oh, did I mention that, generally, these were “Stated Income” loans where you don’t even have to prove your income.
It goes on and on. My point is that these BIG SHOTS all had to know this - and they chose to IGNORE IT ALL, as they were making big bucks and were not going to drop out until there was nothing left to squeeze out. They should be thrown in jail.
As to the guy that makes $20 an hour working in a machine shop, but gets financed for a $350k Option ARM loan that he can NEVER pay back. The guy who has trouble adding up the numbers in his checkbook (thank you public schools), and knows NOTHING about the world of high finance and loan to income ratios. Technically, I guess, you can blame him for borrowing too much - but even 10 years ago and throughout the prior 224 years of this country’s history, there was NO WAY IN HELL that he would have been offered that type of loan. So who’s fault is it really - him for taking money that was dangled in his face, or the person offering it, and knowing full well it could NOT be repaid? You decide.
IIRC this term was coined in the jungles of Vietnam...and Lewis merely applied it to the big earners at his firm.
Big Swinging Deal.
There is of course a long list of candidates for receipt of blame, Wall Street being one of many. May I add to that list Andrew Cuomo, then Clinton’s HUD Secretary? Apparently his part in the mess perfectly qualifies him to be New York’s next Governor.
REALLY guys, this whole “Attack Goldman/Wall Street” is a scam job conducted by the Democrat White House/Congress to divert blame from the likes of Frank, Raines, Cuomo et al?
First, SEC announces investigation of Goldman
Then, Senate conducts Kangaroo Kourt villainizing Goldman
Next, Feds announce criminal investigation of Goldman
Coming up... ???
That doesn’t seem like a prearranged coordinated attack designed to help push through finreg and just MORE government control of everything?
I’m not an apologist for Goldman Sachs - but I will defend them against stupid cynical attacks by hypocritical politicians.
“I’m not an apologist for Goldman Sachs - but I will defend them against stupid cynical attacks by hypocritical politicians.”
Oops, I forgot “self serving”.
I’m not an apologist for Goldman Sachs - but I will defend them against stupid cynical attacks by hypocritical self-serving politicians.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.