Posts filed under “Bailout Nation”
More to come after I digest this, but so far it looks spectacular . . .
Highlights from the NYT:
“The 2008 financial crisis was an “avoidable” disaster caused by widespread failures in government regulation, corporate mismanagement and heedless risk-taking by Wall Street, according to the conclusions of a Congressional inquiry.”
The government commission that investigated the financial crisis casts a wide net of blame, faulting two administrations, the Federal Reserve and other regulators for permitting a calamitous concoction: shoddy mortgage lending, the excessive packaging and sale of loans to investors, and risky bets on securities backed by the loans.
“The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done,” the panel wrote in the report’s conclusions. “If we accept this notion, it will happen again.”
And then there is this:
“The report itself finds fault with two Fed chairmen: Alan Greenspan, a skeptic of regulation who led the central bank as the housing bubble expanded, and his successor, Ben S. Bernanke . . . It criticizes Mr. Greenspan for advocating financial deregulation and cites a “pivotal failure to stem the flow of toxic mortgages” under his leadership as “the prime example” of government negligence.
I never want to make excuses for the excesses of Wall Street or the horrific judgment exercised by iBank management — you cannot, its inexcusable — but it long past time we begin holding the Street’s grand enabler’s responsible for their actions. Which brings me to the accountants. The New York attorney general may be…Read More
I never wanted to write Bailout Nation. That only came about after Bear Stearns collapsed. McGraw Hill approached Bill Fleckenstein to do a follow up to his successful Greenspan’s Bubbles: The Age of Ignorance at the Federal Reserve, about the end of Bear. Fleck turned them down. When the publisher asked him who else was…Read More
I really like the way Michale Hirsh, author of Capital Offense: How Washington’s Wise Men Turned America’s Future Over to Wall Street, describes the causes of the crisis: A now infamous 1999 Time magazine cover featured Alan Greenspan (then chairman of the Federal Reserve), Robert E. Rubin (then Treasury Secretary) and Lawrence H. Summers (then…Read More
For many years, I’ve been a fan of Warren Buffett’s long term approach to value investing. Understanding the value of a company, regardless of its momentary stock price, is a great long term investing strategy. But it pains me whenever I read commentary from Buffett that glosses over reality or is somehow self-serving. His OpEd…Read More
What is more important than survival? On planet Earth, nothing. The most basic rule of life is SURVIVE. The Biological imperative of living things is to perpetuate their existence — survive, procreate, further the species. It is hardwired in the DNA of every living organism. Those that do not succeed in satisfying these imperatives are…Read More
Fascinating discussion in Alan Abelson’s column in Barron’s today (Courting Trouble) about the Banking Sector. It is, perhaps, only slightly exaggerated. The main focus is on misaligned exec compensation, but the subtext is quite astonishing: According to Dennis Butler of Centre Street Cambridge Corp, the Banking sector, on aggregate over time, is a big money…Read More
I’ve spilled so many pixels on Lehman Brothers, I have almost nothing new left to add. For those of you newer to the site, however, here are a few of the Big Picture’s “Greatest Hits” regarding Lehman: • 2 years ago today, we wrote: The Terrible Lessons of Bear Stearns (as applied to LEH) • …Read More
In this morning’s NYT column — Lehman’s Last Hours — Andrew Ross Sorkin wrote: “But what is clear is that the politics of the moment played a factor — or at least was discussed among senior and junior staff — in the decision not to lend to Lehman Brothers, perhaps the greatest mistake of the…Read More