- Low interest credit and "financial innovation"
are a deadly-combo. They've knocked the banking system for a loop, clogged
the credit markets with billions of dollars of subprime sludge, and left
the real estate market sprawling on the canvas. Still---even though $2
trillion of capitalization has been wiped-out from falling home prices;
and even though the financial system is in a terminal state of paralysis---no
one has been held accountable. In fact, not one trader, mortgage lender,
rating's-agency official, fund manager, or investment banker has been indicted
or charged with criminal wrongdoing.
-
- NOT ONE. The system operates without rules or guard
rails. It's the Wild West!
-
- The system is so thoroughly marinated in corruption,
that every trace of regulatory-oversight has been removed. The SEC is little
more than a public relations sham loaded with business-friendly sycophants
who try to sustain the publics confidence while kow-towing to their corporate
paymasters. It's a complete hoax. Last week, the Chairman of the SEC, Christopher
Cox, gave a speech at the Ronald Reagan Building. He said:
-
- "We've already launched an initiative in this area
to investigate possible fraud or breaches of fiduciary duty involving collateralized
debt obligations. Among the issues confronting us this year will be determining
whether bank holding companies and securities firms made proper disclosure
in their filings and public statements of what they knew about their CDO
portfolios and their valuations. We'll determine whether brokers carefully
followed suitability requirements when they sold complex debt-related derivatives
that shortly afterward went bad. And in this area, as elsewhere, we'll
be investigating whether unscrupulous insiders used non-public information
to bail out of these securities or to sell them short, in violation of
the securities laws."
-
- Huh? So, after 6 years of sitting on the sidelines watching
the fat-cat investment banks and hedge funds sell dodgy securities, (comprised
of mortgages from unemployed thrift-store workers with bad credit) Cox
has finally decided to "to investigate possible fraud or breaches
of fiduciary duty."
-
- What a joke. Trillions of dollars have been lost, the
financial system is reeling, and the nation is headed into recession.
We want scalps---not excuses!
-
- Did Cox know that the CDOs, the MBSs, the ABCP and the
rest of the alphabet soup of "structured investments" were unalloyed
garbage?
-
- Yes, of course, he did. Everyone knew. But they were
making so much money selling snake oil to credulous investors
they couldn't help themselves. They went ape. Two week's ago TV investment
guru, Jim Cramer, even admitted that he and his business buddies used
to call the investors who bought these sketchy "debt pools" "morons"
and Bozos". That says it all, doesn't it?
-
- Does Cox expect us to believe that he and his Keystone
Cops at the SEC didn't know what was going on?
-
- Bullshoes!
-
- Here's a video clip from the Daily Show with Jon Stewart
with CNN's personal finance editor, Gerri Willis. Willis explains in simple
terms how the subprime fiasco evolved. She acknowledges that the loans
were made to "people who really couldn't afford to pay them off"
and that when "Wall Street saw how successful they were, they decided
to sell them as investments all around the world". Good thinking,
eh? She even admits that the sellers knew that the investments were rotten
but duped their customers by saying "Trust us" .
Unfortunately, the naive investors found out later that "they
were sold swampland in Texas".
-
- Watch the whole video at: http://www.thedailyshow.com/video/index.jhtml?videoId=148477&title=gerri-willis
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