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I've written several times about the need for a raft of high-level prosecutions before this era can come to a material and psychological close. I have company.
Other than a couple of bush league hedge fund managers, who's been arrested?
Other than a couple of bush league hedge fund managers, who's been arrested?
posted by The Cunning Realist at Wednesday, December 10, 2008
9 Comments:
OT, but "hues to the almost impossible standards"? Both a writer and an editor at Reuter's botch a homophone.
--wmr
This also goes for the current regime of criminals. By pardoning Nixon, we got Cheney & Rumsfeld with Shrub being the dufus face in front of the camera diverting our attention from the undermining of America.
"It seems to me that the intellectual level that we are surrounded with both in government and in the industry is exceptionally low at the moment, it makes me angry."
I can't agree more. Congress is clearly clueless. It really feels like no one is in charge these days. Which just means that we don't know who's really in charge (at least I don't).
Then I hear that Treasury can't account for over $200 billion of the money it has disbursed. Seriously? That is inexcusable. What is this, Iraq under Bremer? Did Hank Paulson just show up with palettes full of cash? I want to know what's really going on here, since it's obviously not what we are being told.
I heard this on NPR this morning. It is all the fault of encouraging home ownership among the poor:
"Peter Wallison of the American Enterprise Institute would take a very different tack in reforming the financial system.
"The problem centers on and comes from the housing policies of the United States," says Wallison. "And if you want to prevent this from happening again, you should change those policies."
Wallison says the crisis wouldn't have happened if Congress hadn't pressured banks to make loans to low-income borrowers through the Community Reinvestment Act. In his view, that began to erode the quality of home loans throughout the financial system and led to the subprime mortgage crisis.
"The government encouraged the making of loans in the United States that were much weaker in terms of their quality than had ever happened before," says Wallison. "And it's those loans, those very poorly underwritten, very poor quality loans that are the source of the problem we're facing."
I know this is not a Q&A blog, but you work on the street. Do you have an estimate of the magnitude of financial instruments (CDS's and the like)of questionable value that financial services companies are carrying on their books as assets? I am a news junkie, but just can't seem to stumble across that number.
Thanks.
The second wave
http://www.msnbc.msn.com/id/28035238/
Peter Wallison is either an idiot or a liar.
Exclusive: WaMu Insiders Claim Execs Ignored Warnings, Encouraged Reckless Lending
Ex-Washington Mutual Risk Manager: Execs 'Took the Brakes Off and Drove Over a Cliff'
By PIERRE THOMAS and LAUREN PEARLE
Oct. 13, 2008—
With Americans reeling from a global financial crisis, dozens of former Washington Mutual insiders have come forward to expose what they claim were calamitous executive decisions that led to the biggest bank failure in U.S. history.
These former WaMu employees, 89 of them who worked throughout the company and around the country, described a bank eager to profit from a housing boom and lending frenzy that seemed to have contributed to the credit crunch and housing bust now plaguing the economy. Some of them spoke to ABC News, all of them are confidential witnesses in a recently filed shareholder class action lawsuit against WaMu.
In court documents, the insiders said the company's risk managers, the "gatekeepers" who were supposed to protect the bank from taking undue risks, were ignored, marginalized and in some cases, fired. At the same time, some of the bank's lenders and underwriters who sold mortgages directly to home owners said they felt pressure to sell as many loans as possible and push risky but lucrative loans onto all borrowers, according to insiders who spoke to ABC News.
And this is "only the tip of the iceberg,"a former high-level executive claimed in the lawsuit.
A company representative told ABC News that Washington Mutual Inc. would not comment for this story.
Former Risk Manager: WaMu 'Took the Brakes Off the Car'
Dale George, a former WaMu senior risk manager who spoke exclusively to ABC News, explained that risk managers are like the brakes on a car. WaMu executives "took the brakes off and drove over a cliff," he said.
more at link...
Oh, there's more:
Was There a Loan It Didn’t Like?
By GRETCHEN MORGENSON
Published: November 1, 2008
AS a senior mortgage underwriter, Keysha Cooper was proud of her ability to spot fraud and other problems in a loan application. A decade of vetting mortgage documents had taught her plenty, she says.
But as a senior mortgage underwriter at Washington Mutual during the late, great mortgage boom, Ms. Cooper says she found herself in a vise. Brokers squeezed her from one side, her superiors from the other, she says, and both pressured her to approve loans, no matter what.
“At WaMu it wasn’t about the quality of the loans; it was about the numbers,” Ms. Cooper says. “They didn’t care if we were giving loans to people that didn’t qualify. Instead, it was how many loans did you guys close and fund?”
more at link...
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