Wednesday, January 26, 2011

Headline of the Day

Financial Crisis Was Avoidable, Inquiry Finds:

LOL. I thought this came from the Onion at first, but no, this is for real, from the NYT and other media outlets.

The commission that investigated the 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, which were read by The New York Times. “If we accept this notion, it will happen again.”

No, the "greatest tragedy" is that this still isn't being called what it actually was: FINANCIAL CRIME. And the report seems to blame the ineffective regulators more than it does the parasites who committed the crimes in big banks and big mortgage in the run-up to 2008.

The report is harsh on regulators. It finds that the Securities and Exchange Commission failed to require big banks to hold more capital to cushion potential losses and halt risky practices, and that the Fed “neglected its mission.”

It says the Office of the Comptroller of the Currency, which regulates some banks, and the Office of Thrift Supervision, which oversees savings and loans, blocked states from curbing abuses because they were “caught up in turf wars.”

“The crisis was the result of human action and inaction, not of Mother Nature or computer models gone haywire,” the report states. “The captains of finance and the public stewards of our financial system ignored warnings and failed to question, understand and manage evolving risks within a system essential to the well-being of the American public. Theirs was a big miss, not a stumble.”

Miss, stumble, dropped pass, whatever. Blaming the regulators for missing the orgy of crime on Wall Street is a bit like blaming the FBI for missing the orgy of terrorism in the run-up to 9/11.

This was a massive, virtually incomprehensible criminal enterprise, perpetrated on the American and international markets and people, for which no one has gone to prison. In fact, the only perpetrators who have gone to prison (such as Bernie Madoff) were the cons who committed crimes only to enrich themselves, rather than their banks and investors.

Meanwhile, the Wall Street cons who ripped off the public, plunged the country into a black hole recession, threw millions out of work, and were bailed out by the government for their crimes, are now reporting record profits and bonuses...literally laughing all the way to the proverbial bank.

"A 576-page book — a conclusive sweep and authority" that completely missed the boat.

1 comment:

Patrick Lindsey said...

How much of the crisis should we attribute to oil? It seems as though we never hear about oil when discussing the financial crisis, why?