[Wingy]

The sale of those mortgage backed derivatives should never have been permitted, but there was no law against them that I know of.

There is no law against selling MBS, and as far as I'm concerned there shouldn't be, but fraudulently marking them up to hide the true risk to the buyer is against the law. That law was broken and no one was charged. Why?

[kenavi]

The risks were there for the buyers to see, in the prospecti and the footnotes to the banks' financial statements.

Goldman Sachs was hauled before Congress for a MBS it had sold, when the buyers themselves weren't suing them for it. And it had nothing to do with the financial meltdown.

What there was was a bubble economy and concentration of investment risk on U.S. home prices, which grew out of whack in relation to household income.