“This is not some evil conspiracy of two guys sitting in a room saying we should let people create crony capitalism and steal with impunity. But their policies have created an exceptional criminogenic environment. There were no criminal referrals from the regulators. No fraud working groups. No national task force. There has been no effective punishment of the elites here.”

-William K. Black, a professor of law at University of Missouri, Kansas City, and the federal government’s director of litigation during the savings and loan crisis.

>

That is the question asked by Gretchen Morgenson and Louise Story in today’s NYT, In Financial Crisis, a Dearth of Prosecutions Raises Alarms: “Why, in the aftermath of a financial mess that generated hu”ndreds of billions in losses, have no high-profile participants in the disaster been prosecuted?”

It is a theme that Matt Taibbi hammered on back in February in Why Isn’t Wall Street in Jail?.

The Times piece today is a huge 4,000 word column, highlighted by a graphic comparison of the S&L crisis, where over 1000 bankers went to jail, and the current situation.

>

click for huge graphic

Via NYT

>
Source:
In Financial Crisis, a Dearth of Prosecutions Raises Alarms
Gretchen Morgenson and Louise Story
NYT, April 14, 2011   http://www.nytimes.com/2011/04/14/business/14prosecute.html

Category: Bailouts, Digital Media, Legal

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

76 Responses to “Why Has No One on Wall Street Gone to Jail (Yet)?”

  1. cognos says:

    Still on the “witch hunt”… huh?

    You must be pissed that TARP, TALF, PPIP, etc… all ended up massively profitable for taxpayers.

    Markets go up and down… every 10yrs, and every 50 yrs they go way down. This is not a “felony” offense.

    ~~~

    BR: How are these massively profitable for taxpayers? They are still $275B yet to be paid.

    And if you want to include GM/AIG/C stock, explain to me how Uncle Sam is going to sell stock that is 80% of the float at these firms?

  2. cognos says:

    The US (and the world) lost much, much more $ from the mis-managed Iraq war… say $2T. And from the Bush tax cuts… say $2T. Than from any exotic mortgages…

    Speaking of which… given the regulators just slept at the wheel on exotic mortgages… I nominate Shiela Bair to be prosecuted first. She does deserve to go to jail for incompetence. Hank Paulson is prob my #2. Elizabeth Warren is #3.

    ~~~

    BR: You are daft . . .

  3. budhak0n says:

    Why has no member of a Law School faculty gone to jail yet? Same answer.

  4. A says:

    There are a number of factors that come into play. One, the rich and powerful can afford the legal power to stay out of jail – and they have the resources to pay their way out. Secondly, these same rich & powerful ‘business people’ often fund the campaigns of the bought-and-paid-for politicians that should be chasing them. Third, the government has proven itself inept in realizing what has happened and how to deal with it.

    Corrupt government + corrupt business people. Oh well, it is an election year. So perhaps the current administration will chase one or two Wall Street underlings to buy some votes.

  5. curbyourrisk says:

    Barry…I was a recent S&P seminar on investing in 2011. One of the preseners (will remain nameless) spoke on the banks and how they have all been saved (I was “shocked” at how bullish EVERYONE of their presenters were – uh, not really). During the question and answer period…I actually asked this guy…… During the S&L crisis we say MANY people get indicted and actually go to jail. Why do YOU think this time is different? Why haven’t we seen people indicted? Do you think people should go to jail?

    His answer……..long pause…….”uh, I am not sure anyone actually broke the law. What would sending these people to jail fix?”

    I was was dumbfounded.

  6. AHodge says:

    partly because O desperately needs what he can get of the broad business class vote. This produces an unholy R and D alliance. But if Plouff etc had any brains they would cut Wall Street out from the rest of the business herd, and you know…
    say over and over we not after main street, and dont publicize putting the blade in..

  7. curbyourrisk says:

    Cognos……seriously…massively profitable…. stop reading the .gov teleprompter. The idea of “massively proftiable” has been debunked on numerous FACT based web sites numerous times. I am not going into it, but come on….

  8. Jo says:

    In cognos we see the blogosphere metaphor of a ‘regime thug’.

  9. Woof says:

    Seems to me that the major financial institutions are not only TPTF the are also too big to prosecute. Easier and to go after the relatively small S&Ls. A lot of small banks have failed, have there been no prosecutions in those cases?

  10. Greg0658 says:

    “massively profitable for taxpayers” .. hum .. cash returned to the TBTF by interest on credit cards .. when the MEW ran out …. but NOT for me here – I played by the rules – was looking for 1 more year to 55yo to begin receiving a reduced pension to do something with in a spare building I’ve been hacking on over the years – dump some ROI into it for something – like a miniMart (not) – but alas China got those dollars (and is now driving the worlds economy) … so alas I may need to strip the property for its commodities – rather than return my sweat equity over to someone for dimes on the dollar … I swear I won’t burn it down – that just wouldn’t be right – besides the insurance would barely haul it away (my insurance company doesn’t like that either – but they should if you think about it)

  11. number2son says:

    Elizabeth Warren is #3

    Huh? Are you daft? Warren is one of the few honorable people in this mess.

  12. AHodge says:

    Curb here is my S&P story
    with names
    i went back and forth with David Wyss over and over about accounting in the crisis.
    and by early 09 had partly convinced him they would never ever see again the values they were carrying on mortgages etc.
    by 2010 he had completely reneged.
    drifts away from me sayin ” I’m going to convince you we can value asset backed at hold to maturity prices” then spent the rest of the conference running away from me.
    My loud “no you’re not” as he receded might be part of that.

    so of course they are giving all the banks a complete top grade accounting based blessing,
    though even they say its only if –reference hoenig narrow banking yesterday–they assume complete support from the govt.

  13. budhak0n says:

    Warren’s an academic. Her honor is not relevant.

  14. Petey Wheatstraw says:

    cognos:

    You completely ignore the disease (fraudulent criminal enterprise in which the end result was toxic securities laundered and sold the world over), and focus on the snake oil remedy: TARP, TALF, PPIP. By your logic, John Gotti should have been left alone because he was generous to his old neighborhood.

    Also, “exotic” mortgages weren’t the problem. Good ol’ prime loans were as fraudulent as any exotic.

  15. Bruman says:

    I saw this in the paper this morning and I thought “That’s going to be a TBP topic.”

    For asleep-at-the-wheel regulators, one wonders if this is the non-genocidal equivalent of “we were just following orders.”

  16. Lugnut says:

    This goes back to your “what would you ask the AG conference attendees?” post. My response, what actually did you receive (or were threatened with) in exchange for sitting on your hands.

    Appropos to this post, Federal Regulators are hammering out a ‘deal’ on the fraudclosure debacle to paper it over with no fines and no prosecutions, to little journalistic fanfare or scrutiny.

    http://www.zerohedge.com/article/todays-exercise-wristslapping-full-text-draft-bankter-regulator-settlement

    perhaps if this were France, the news of this deal would cause cars to be burned and store windows to be broken in riots. Not saying thats the path to resolution, but I can’t help but be astonished by both the amount of blatant outright capture that has occurred by the banks in this country, along with the near total complacent acceptance of it by the public who refuses enough to care to learn what is being done to them by the Federal Government and the banking interests that rule the roost.

    So…..

    Where is Congress? No Hearings? No outrage on the get out of jail free card from ‘captured’ revolvoing door regulators?

    Where is US AG Eric Holder? Shouldn’t he be telling the regulators, “no deal until determine the extent of prosecutable offenses committed and what actions we intend to take”? Did he OK this? Does he have any jurisdiction anymore?

    Where is the President taking a leadership position on upholding the law of the land? Was he not a Consitutional Law professor?

    Or is the ‘stability of the housing ad mortgage markets’ aka ‘business as usual’ more important.

    Buehler? Buehler?

    Seriously, am I being over reactionary here? I’m a 40 something telecom saleman wearing a suit in an office typing this, but I feel like compared to most everyone I know I should be wearing a Che t-shirt, a beret and Doc Martens. I’m really fed up with how the sausage gets made in this country anymore, but I don’t know what to do about it. Both parties are equally bad and complicit IMHO.

    pissed of in NJ

  17. Stuart says:

    Simon Johnson nailed it. There was a financial coup in Washington. They are not going to eat their own. Simple as that.

  18. baldski says:

    This speaks well of how corrupt our country has become. All empires fail from within and sadly we are following the same path of corruption that other empires have followed.

  19. AHodge says:

    speaking of Hoenig, his staff passes on
    that he gave a speech with text in feb on narrow banking, dodd frank no good, and slamming the big guys
    http://kansascityfed.org/publicat/speeches/hoenig-DC-Women-Housing-Finance-2-23-11.pdf
    has an obsure title and got no coverage but is direct in parts.
    though not as direct as Barry’s rippin summary of this round which i guess remains otherwise “secret and prvate”

  20. Hantra says:

    I think everyone is missing an important point here.

    The S&L crisis was perpetrated largely by people outside of Wall Street. Hence the prosecutions.

    This whole thing was orchestrated by Wall Street, and supported wholly by the revolving door between Wall Street, and the Federal government. That’s the difference.

  21. Transor Z says:

    Certain commenters magically materialize at low ebbs in the public fortunes of certain interests. If you haven’t realized the pattern by now…

  22. DeDude says:

    I am afraid that part of the explanation is that during the Bush years a lot of financial crimes were made legal, or the burden of proof made so difficult that it was like making those crimes legal. It is not enough that harm was done if doing that harm was not illegal, or if there is an impossible burden to prove that the harm was intentional.

  23. wally says:

    If you are going to look for absurdity and injustice today, you will find it everywhere.
    The fact is that the wheels are off the wagon.

  24. budhak0n says:

    Sorry I fail to see how this is a constitutional issue. It reckons back to some of the backstory of Hamilton but a “constitutional” issue? Please connect me.

  25. budhak0n says:

    It’s really simple. You don’t want financial institutions in your life? Stop using them.

    Oh and you “should” pay them back before you cut them out. Other than that, what other issue is there so long as they repaid their obligations?

  26. MorticiaA says:

    Yet Congress is hell-bent on bringing Barry Bonds to “justice.”

    This should answer your question: I’m sure baseball doesn’t have lobbyists.

  27. peachin says:

    Barry, you have an interesting group of followers – speak about of moral “out of touch!”

    This is going around and certainly needs to be printed here:

    Remember when teachers, public employees, Planned Parenthood, NPR, and PBS crashed the stock market, wiped out half of our 401Ks, took trillions in TARP money, spilled oil in the Gulf of Mexico, gave themselves billions in bonuses, and paid no taxes? Yeah, nor do I!

    Finally remember a big thief (insider) – really.. big who went to jail? Martha Stewart!
    Wall Street’s answer: “We gave you Madoff, what more do you want?”

  28. peachin says:

    budhak0n Says:
    April 14th, 2011 at 10:40 am
    It’s really simple. You don’t want financial institutions in your life? Stop using them.

    My reply: I’m speechless!

  29. Francois says:

    It is this criminogenic environment that produce indefensible outcomes such as this:

    http://www.rollingstone.com/politics/news/the-real-housewives-of-wall-street-look-whos-cashing-in-on-the-bailout-20110411

    But if you want to get a true sense of what the “shadow budget” is all about, all you have to do is look closely at the taxpayer money handed over to a single company that goes by a seemingly innocuous name: Waterfall TALF Opportunity. At first glance, Waterfall’s haul doesn’t seem all that huge — just nine loans totaling some $220 million, made through a Fed bailout program. That doesn’t seem like a whole lot, considering that Goldman Sachs alone received roughly $800 billion in loans from the Fed. But upon closer inspection, Waterfall TALF Opportunity boasts a couple of interesting names among its chief investors: Christy Mack and Susan Karches.

    Christy is the wife of John Mack, the chairman of Morgan Stanley. Susan is the widow of Peter Karches, a close friend of the Macks who served as president of Morgan Stanley’s investment-banking division. Neither woman appears to have any serious history in business, apart from a few philanthropic experiences. Yet the Federal Reserve handed them both low-interest loans of nearly a quarter of a billion dollars through a complicated bailout program that virtually guaranteed them millions in risk-free income.

    RS Politics Daily: Political news and commentary from Rolling Stone writers and editors

    The technical name of the program that Mack and Karches took advantage of is TALF, short for Term Asset-Backed Securities Loan Facility. But the federal aid they received actually falls under a broader category of bailout initiatives, designed and perfected by Federal Reserve chief Ben Bernanke and Treasury Secretary Timothy Geithner, called “giving already stinking rich people gobs of money for no fucking reason at all.” If you want to learn how the shadow budget works, follow along. This is what welfare for the rich looks like.

    Questions:

    1) Does that pass the smell test?
    2) Is this shit even legal?
    3) Where is the national media on that?

    I know! I know! The last question is purely rhetorical; we do not have a free press anymore in this country, since none of the media owners is free from the federal government for their financial well-being.

    Those who balk at this statement should read this:
    http://www.salon.com/news/opinion/glenn_greenwald/2011/04/10/journalism

  30. Petey Wheatstraw says:

    budhak0n Says:

    It’s really simple. You don’t want financial institutions in your life?
    ____________

    I don’t want them running my government (to their own benefit), printing scrip, loan-sharking, or sucking my tax dollars into the black hole that is their personal store of wealth.

  31. plantseeds says:

    Didn’t it all come down to securities FRAUD?
    Doesn’t responsibility to prosecute then rest squarely on the shoulders of the SEC?

  32. Francois says:

    And to answer the original question, no one went to jail because:

    1) The SCOTUS has made financial crimes prosecution quasi-impossible. Between friends you know…

    2) The media are ALWAYS way behind the curve on this for reasons exposed in my last post.

    3) Pray tell how can prosecutions be even conceivable when the Federal government has within its ranks, agencies like the OCC which are nothing more than financial industry lobbyists paid by the taxpayers?

    4) Barack needs a cool billion just for his re-election. Ditto for the Bought-N-Paid-For Rent-A-Congress. You do not bite the hand that feeds you now, do you?

  33. davver1 says:

    Its making people rich is the obvious and probably correct answer, but lets leave it aside for a second.

    1) Republicans have an ideological commitment to Wall Street and their own conception of free markets.

    2) Democrats have a political commitment to Wall Street because they panicked and bailed everyone out, and now they own the bailouts and the people they bailed out. They also own really weak financial reform. If people start getting prosecuted it will become obvious how much they fucked up policy over the last few years, and they don’t want to do that.

  34. KJ Foehr says:

    “Why, in the aftermath of a financial mess that generated hu”ndreds of billions in losses, have no high-profile participants in the disaster been prosecuted?”

    a) Nepotism
    b) Salutary neglect
    c) Reliance on the invisible hand to spank them
    d) Unwillingness to kill the goose that lays the golden contribution
    e) Belief that the bad karma they created will provide appropriate payback

    .
    Answer: Any of the above; whichever suits you.

    My question is, if they won’t prosecute them, why don’t they at least demand that all those above the Senior VP level complicit in no doc, NINJ, liar, 110% LTV loans and intentionally overrated “AAA” CDOs or other MBSs be fired!

  35. budhak0n says:

    Awww. It seems somebody in the room missed the “free market” part of this course.

    It’s simple. If you are say … a homeowner or a small business owner or a car dealer or a tailor or a jester, pig farmer or jewel thief, it doesn’t really matter. You are free to go to any local business person and seek a loan if you wish. But there’s no requirement that you do so.

    I’ve had my own personal issues with some corporate players. Therefore I’ve decided to no longer do business with them any longer after having satisfied my agreements. They participate in business practices which I do not approve therefore I don’t do business with them any longer.

    But other than that, it’s not exactly a “criminal” issue. I borrowed their money. I paid them back. They got their money through some questionable means but it doesn’t change the fact that I borrowed their money. I didn’t have to do so.

    Same thing here. If you have a problem with the way a certain institution goes about their business. Don’t do business with them. It’s really that simple but it’s certainly not criminal.

    The distinction between criminal and civil acts as well as the distinction between things that are harmful to “society” versus the normal ugliness of business is becoming way too cloudy.

    There may be some “civil” arguments concerning what went on here but there’s no prosecutions because it’s not a criminal act in the United States to act in your own financial self interest. The threshold of criminality is much higher and frankly with the right people in your camp even that line can get wavy at times. Just my two cents.

  36. daf48 says:

    The answer to the question obscures the bald, naked deceipt that people in the financial world use to fool themselves. The corrupt nature of the “business opportunity”, taking advantage of somebody to make a buck has been exposed. All this BS about free markets is replaced by socialism, privatizing the profits and publically pawning off their losses. And if you’re involved in the financial world, then you’re complicit in a corrupt system. Marx was right. The wheels are coming off wagon because of our lack of morals.

  37. daf48 says:

    @davver1

    I thought TARP came from Paulson. Wasn’t he Republican? And besides, you can’t do anything to Goldman-Sachs except slap them on the knuckles.

  38. Fred C Dobbs says:

    If you really want to know why, if you want to hear the truth, ask the US Attorney for the Southern District of New York why the US Attorney has not prosecuted anyone. The venue for prosecuting almost all of the TBTF banks is NYC. It may have something to do with Obama or Schumer, since all US Attorneys are appointed by the President, and serve at his will, on the recommendation of the Senior Senator from the State of New York. Ask the person who knows, and ask on the record. See if you can get a truthful response. The silence or non-prosecution so far tells you all you really need to know: someone told the US Attorney, as a matter of prosecutor discretion or local policy, to do nothing, or lose the job.

  39. Petey Wheatstraw says:

    davver1 Says:

    “Democrats have a political commitment to Wall Street because they panicked and bailed everyone out, and now they own the bailouts and the people they bailed out.”
    ____________

    I don’t think that’s how it went. The bail outs (at least TALF and TARP), belong to Bushco. TARP was signed into law Bush on October 3, 2008.

  40. Petey Wheatstraw says:

    In a free market, corporate interests don’t need to own the government to channel money directly into their own gullets. In a free market, losers are allowed to lose — no matter how large they are.

  41. Petey Wheatstraw says:

    “There may be some “civil” arguments concerning what went on here but there’s no prosecutions because it’s not a criminal act in the United States to act in your own financial self interest.”
    _______

    When your financial self interests are based on fraud, criminal negligence, money-laundering, perjury, and racketeering, it is a crime of the felonious kind.

  42. budhak0n says:

    Yes but Pete, they paid it back. You’d have a much stronger argument if they didn’t. So now the issue is that there’s too many players in the system?

    I can see the argument that this is devaluing all of our dollars and that now the wealthy don’t have as much swag as they used to have because they can’t just solely control access but in all honesty unless you were personally left holding the bag on something I don’t get the anger.

    For instance, there’s a whole crew of pissed off people who bought real estate at the top and did it with borrowed money. They made a bad move and are pissed. That’s understandable. But nobody told them to do that.

    The world has to have the ability to separate the freedom to contract from good financial decisions. Just because you have the legal capacity to contract doesn’t mean you’ll make good decisions and it’s not the “law’s” job to intervene on a person’s bad decision. The “law’s” job is to give you the opportunity to make a good decision. There’s been a whole lot of overreaching decisions trying to extend the “law’s” influence but in reality when you enter an agreement it’s up to you to seek your best deal.

    Frankly it’s the incessant behavior of people who never want to honor any deal they ever make that makes the world 400 times more complicated than need be.

    But that too is their right to behave like shmucks incessantly.

  43. Lugnut says:

    “I don’t think that’s how it went. The bail outs (at least TALF and TARP), belong to Bushco. TARP was signed into law Bush on October 3, 2008.”

    and Clinton didn’t veto Gramm Leach BIley, so what? Both sides are a little complicit in their ability to take money from the banking lobby

  44. farmera1 says:

    I wonder….

    I have this feeling that when there are no rules as in deregulation it must be difficult to prosecute someone.

    Remember Kenny Boy’s quote (Ken Lay of Enron fame)

    “The only rules there are no rules”

    He then proceeded to rape, pillage and plunder. (But he was also a great patron of the arts and a philanthropic in Houston.)

    It has only gotten worse since Kenny Boy did his thing. Corporations are now citizens that can give all they want to politicians. So as the 1% gets richer and has more power, they aren’t going to jail and they aren’t going to give up power easily. The world just doesn’t work that way. They will use their power to protect themselves.

    Power corrupts and absolute power corrupts absolutely (who said that) . I have this uneasy feeling that this country is ungovernable as the rule of law becomes a quaint memory. Things are spinning out of control on many levels.

  45. davefromcarolina says:

    “…I feel like compared to most everyone I know I should be wearing a Che t-shirt, a beret and Doc Martens. I’m really fed up with how the sausage gets made in this country anymore, but I don’t know what to do about it. Both parties are equally bad and complicit IMHO.”

    You are not alone.

  46. Fred C Dobbs says:

    To follow up a previous comment, the US Attorney for the SDNY appointed by Obama is “Preetinder S. Bharara[1] (born 1968), commonly known as Preet Bharara… [He] previously served as the chief counsel to Senator Chuck Schumer and played a major role in the United States Senate Committee on the Judiciary investigation into the firings of United States attorneys. He was assistant United States Attorney in Manhattan for five years, bringing criminal cases against the bosses of the Gambino and Colombo crime families and Asian gangs in New York City. Bharara is a naturalized American citizen. He is married with three children.” [source: Wikipedia] He is a graduate of Harvard College and Columbia Law School.

  47. HarleyHoward says:

    Cognos should change his name to Uncognos, or Uncons, or Buying the Gov B.S. He is why the 1% will continue to rule and steal and laugh at the rest of us.

  48. Braden says:

    What’s the big deal? It’s not like they lied about taking steroids or anything.

  49. KJ Foehr says:

    “The world has to have the ability to separate the freedom to contract from good financial decisions. Just because you have the legal capacity to contract doesn’t mean you’ll make good decisions and it’s not the “law’s” job to intervene on a person’s bad decision. The “law’s” job is to give you the opportunity to make a good decision. There’s been a whole lot of overreaching decisions trying to extend the “law’s” influence but in reality when you enter an agreement it’s up to you to seek your best deal.” — budhak0n

    Imo, the law’s job is to provide justice for those who have been harmed by the unfair (unlawful)treatment of others. But I guess the idea of adjudicating fairness is not an acceptable function of government to libertarians, unless, of course it involves the protection of private property rights. (I don’t know if budhak0n is a libertarian; it’s just that I see that philosophy creeping into more and more people’s thinking these days.)

    And this.

    “But that too is their right to behave like shmucks incessantly.” — budhak0n

    Caveat emptor! It’s every man for himself! Grab what you can for yourself and the hell with the other guy – it was his free choice! It’s survival of the fittest! John Galt is my idol!

    At first we tried to help each other, but now it is becoming every man for himself, and the devil take the hindmost, along with the poor, the sick, the feeble minded, the naïve and uninformed, and all the other shmucks. Let them rejoice in the freedom to enter into contracts with wolves, sharks, the greedy, and the evil without the interference of tyrannical laws and regulations.

    .
    I have become convinced that the libertarians are winning, and if they do take full control of the country, it will be time for me to leave it. I don’t want to live in a “society” where self-interest and greed reign supreme, a dog-eat-dog world where only the strong survive, and the rest are ignored at the curbside.

    The idea of freedom gave birth to this country, and it appears to me now that selfish individualism born in the name of personal freedom will be its demise.

  50. cognos says:

    BR -

    I am sorry you think I am daft. I know you are trying to sell books hawking the “crisis”… but the #s just are not there:

    WSJ, March 17, 2011 – HEADLINE – With Fifth Third Out, Banks Have Repaid 99% of TARP. See:

    http://online.wsj.com/article/SB10001424052748704261504576205142438418336.html

    Another quote from the same article (typically the WSJ checks facts…) – “The Treasury currently estimates that bank programs within TARP will ultimately provide a lifetime profit of nearly $20 billion to taxpayers.”

    So now… that the banks. The biggest portion of TARP by far, and includes Citibank. And the current overly conservative estimate is for a PROFIT of $20B (and 99% repaid already). Hmm…

  51. cognos says:

    AIG then has $60B in equity market cap outstanding (granted 80% owned by the US govt)… saying you are wrong if you think AIG will lose any money for the US govt.

    AIG has been able to dispose or sell over $50B in assets. They have many more valuable businesses. They are currently servicing their debt and rated A- / BBB… so it does not look like they default.

    Do you see AIG losing any money for the US govt? (Short all the equity, make $60B… wont happen.)

  52. cognos says:

    Bernanke has consistently said in Fed testimony something like — ‘not only does it look like we will be profitable on the spv deals and debt assumed by the Fed, such as the Maiden Lane guarantee structures taken on after the collapse of Bear Stearns…” HE SAYS something to the effect of… “it actually looks like NO SINGLE DEAL will lose money”.

    Bc the Fed took lots of security, and bought in the crisis. Buying in the crisis almost always works. Esp when you fund at 0%.

  53. VennData says:

    Since no one’s mentioned how “The Liberals in Congress should be imprisoned for CRA…” Oh wait… in the FT, swap and derivative stooge… er… a… lobbyist er… a… thoughtful leader Mark Brickell states…

    http://www.ft.com/cms/s/20becc00-65e4-11e0-9d40-00144feab49a,Authorised=false.html

    …that the mortgage mess was due to bad government data on mortgages relied upon by the industry.

    But you may ask, “How did the government get “bad data” on mortgages?”

    …by including all the data about mortgages that were affected by bad gov’t policy.

    But you may ask, “How did the government implement bad gov’t policy?”

    … the CRA that made mortgage-providers provide mortgages they wouldn’t have otherwise done.

    See?

  54. cognos says:

    You guys who say — “Cognos is like the govt”. That is wierd. I think every senator and senate commission and even the president act EXACTLY like you all. They all want to witch hunt, point fingers, and cry over spilled milk.

    1. Why did regulators NOT regulate before the crisis? These people are the most culpable. If all mortgages simply had 20% down… there would be no crisis. That is a fact.

    2. Why do regualtors over regulate since the crisis? People like Elizabeth Warren and Shiela Bair all of a sudden turned into bank failing, “equity capital” zealots… only AFTER the crisis. This is utter nonsense and holds back a natural recovery. Since March 2009… ALL LEVERAGE JUST WORKS! They deserve jail for being total idiots.

    3. It is very sad that the US homeowner foreclosure crisis was not better solved for the benefit of all parties — homeowners, investors, and banks. “Foreclosing” on homes to recover 5-10 or at best 20 cents on the dollar is total senselessness. Any basic restructuring plan could’ve saved so much pain and useless paperwork in courts, lawyers, moving costs, delay, etc. But the world lacks commonsense leadership.

    It has no lack of angry witch-hunters!

  55. curbyourrisk says:

    Thanks COGNOS…..all those …ZZZZZZZZZZZZZzzzzzzzzzzzzzzzzzzzzzzzzzzz

    sorry I dozed off reading what you said.

  56. Transor Z says:

    This discussion thread brought to you today by Trolls R Us, a division of HBGary.

    Anybody who says the law doesn’t function to rescue people from bad contracts doesn’t know WTF they are talking about. Unconscionability, Undue Influence, Fraud, Misrepresentation, Mistake, Duress, Public Policy, Contra Proferentum, Cramdown… The exceptions don’t swallow the rule but they aren’t chopped liver either. So, you know, please be quiet and stuff.
    ————-

    Things I want to know more about:
    (1) Details of how GS justifies representing its position as “net long” and only intermittently “net short” during the relevant period.

    (2) How many hours of video Mozilo has of high-profile people snorting coke off of naked hookers (or even more demented/twisted shit). Because I want to see those DVDs… for investigatory purposes of course. Smile for the camera, Senator!

  57. gordo365 says:

    Wow – seems like lots of folks are following instructions today…

    ________
    Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

  58. davver1 says:

    Petey Wheatstraw,

    You know your in trouble when claiming to be on the same side as Bush is a defense.

    Look at the house and senate roll call votes. The bailouts were democrat supported measures rammed through by Nancy Pelosi and the democratic leadership. They were opposed by most republicans, and they even failed the first time because of it.

    Obama also re-appointed Bernanke, so any bailouts done by the Fed have his blessing. Once again it was a democratic initiative to get him reappointed.

    Many of Obama’s top economic advisers were critical in pushing deregulation, the bailouts, and many got rich working for banks.

    If you vote for it and support the people who did it, you own it.

  59. budhak0n says:

    KJ over time you become less ascribed to any one philosophy and more dedicated to trying to see the world for what it is.

    Call it “Realism”. Just keeping it real.

  60. budhak0n says:

    Consider yourself blessed . On most days I’m not always so forthright hehehe

  61. willid3 says:

    davver1 Says:
    April 14th, 2011 at 2:27 pm

    Petey Wheatstraw,

    You know your in trouble when claiming to be on the same side as Bush is a defense.

    Look at the house and senate roll call votes. The bailouts were democrat supported measures rammed through by Nancy Pelosi and the democratic leadership. They were opposed by most republicans, and they even failed the first time because of it.

    so who proposed them? this was in 2008. so that could only be your friend GWB. and considering his opinions on these sort of things, one can only think that he did it only because if he didn’t there would have been a bigger depression that the last one. and what was the suggestions from his fellow party members? i seem to recall one suggested insurance. guess they don’t understand insurance well. it will collapse if the moment its bought there is a claim.

  62. Petey Wheatstraw says:

    davver1 Says:

    I think you have me confused with a Bush supporter. The (R) camp would have voted for eating children if the (D) camp proposed a law against it. Bush could have vetoed. What was the (R) plan for dealing with their own mess?

    In a nutshell: We are living the results of conservative government with feckless opposition from the less far right party.

    We did better when there were liberal and conservative camps in both parties and the entire political spectrum was left/center.

    Then, there’s the blatant hypocrisy and dishonesty:

    “June 2002: Congress approves a $450 billion increase, raising the debt limit to $6.4 trillion. McConnell, Boehner, and Cantor vote “yea”, Kyl votes “nay.”

    May 2003: Congress approves a $900 billion increase, raising the debt limit to $7.384 trillion. All four approve.

    November 2004: Congress approves an $800 billion increase, raising the debt limit to $8.1 trillion. All four approve.

    March 2006: Congress approves a $781 billion increase, raising the debt limit to $8.965 trillion. All four approve.

    September 2007: Congress approves an $850 billion increase, raising the debt limit to $9.815 trillion. All four approve.”

    http://thinkprogress.org/2011/04/14/republican-leaders-debt-limit-hypocrisy/

    Without offsetting cuts in spending, even. Now, those cuts are essential?

  63. dead hobo says:

    cognos,

    Sorry, but for a while I thought you were doing better. You’ve gone back to nut status. I feel dirty.

  64. dead hobo says:

    Oh well, back to being a son of a bitch to current and former nuts. So much for that trust thingie.

  65. dead hobo says:

    Transor Z Says:
    April 14th, 2011 at 2:20 pm

    Anybody who says the law doesn’t function to rescue people from bad contracts doesn’t know WTF they are talking about. Unconscionability, Undue Influence, Fraud, Misrepresentation, Mistake, Duress, Public Policy, Contra Proferentum, Cramdown… The exceptions don’t swallow the rule but they aren’t chopped liver either. So, you know, please be quiet and stuff.

    reply:
    ———-
    I’m a big fan, but what you proclaim applies to Judge Judy and cases that don’t involve wall street. Lose money to sophisticated financial fraud and say goodbye to it. They win. I’m starting to wonder if a general disrespect for the rule of law is around the corner since so many of the monied set got away with legendary theft with Uncle Stupid’s full support. Gas is $4. Republicans want grams and gramps foregone health care to pay for big tax cuts for rich people. Crooks get free money because they steal big and donate to politicians while stealing. Why should I fucking play by the rules any more?

  66. Transor Z says:

    Because you don’t look at crooks and politicians as role models? Check out the stuff you can find online from McKay’s 1848 account of the South Sea Bubble of 1720. These asswipes don’t have the power to change human nature one iota. I think something is percolating in the collective mind. We’ll see what happens.

  67. contrabandista13 says:

    Not to worry…. Corruption breeds the seeds of it’s own destruction….

  68. bulfinch says:

    Cognos; Budhakan, & co.

    RE: “Yes but they paid it back,” blah blah blah

    Total bailout funds disbursed to date: $4.72 TRILLION DISBURSED

    Total funds oustanding: $1.93 TRILLION OUTSTANDING

    http://www.sourcewatch.org/index.php?title=Total_Wall_Street_Bailout_Cost

    This says nothing of the banks borrowing from the Fed at near zero to buy Us treasury securities and other low risk assets. This is also a form of bailout, never to be paid back.

  69. [...] “Datapoint of the Day” comes from the NYT column we referenced yesterday: “Data supplied by the Justice Department and compiled by a group at Syracuse [...]

  70. DeDude says:

    “there’s a whole crew of pissed off people who bought real estate at the top and did it with borrowed money. They made a bad move and are pissed. That’s understandable. But nobody told them to do that”

    Actually those houses had their price overinflated because of fraud, theft and swindling on Wall Street – a lot of it legalized by Bushco. The same thing with current commodities prices; jacked up by Wall Street by theft and swindle – paid for by main street.

  71. DeDude says:

    “The bailouts were democrat supported measures rammed through by Nancy Pelosi and the democratic leadership.”

    The legislation gave Bush (Paulson) the authority to save the financial system. It was that or let society collapse. The legislation did not tell him to do so by bailing banks out. He could have gone Swedish, fired management etc. but chose a different route. After the authority was handed over to Obama we had a different type of saving companies (fire management, haircut to bondholders etc.) – of the auto-industry.

  72. Why Isn’t FCIC Peter Wallison Facing Criminal Prosecution After He Lied To Congress?

    In his latest Bloomberg op-ed, FCIC Commissioner echoes his perjured testimony, wherein he claimed that the Commission ignored the discredited analysis of his colleague at the American Enterprise Institute.

    The FCIC “never investigated what information about Fannie and Freddie’s loans was available at the time,” writes FCIC Commissioner Peter Wallison in an op-ed piece for Bloomberg. It’s a new slant on the same lies he put forth in his written dissent and in his prepared testimony before Congress. Those lies could not be more obvious, and they provide the foundation for his dishonest claims about the mortgage crisis. Specifically, he claims that the FCIC refused to examine the loan data on the GSEs and the research and analysis of his colleague at the American Enterprise Institute, Edward Pinto. Pinto claims that subprime and Alt-A loans constituted half of the total loans outstanding, and that a big share of those loans were held or guaranteed by Fannie and Freddie