Financial Crisis Commission Releases Final Report
Financial Crisis Inquiry Commission chair Phil Angelides....
By Dr. Pitchfork
It's out. The Financial Crisis Inquiry Commission has issued it's official report on the causes of the financial crisis. This is a very important document and I'm sure that Congress will be very interested in poring over its 662 fun-filled pages of charts, graphs, tables and endnotes. That way, they can have all the information they need before they get to work on drafting a good, thoughtful financial reform bill....
Wait. What's that you say? They passed a huge financial reform bill to fix the financial system BEFORE finding out what caused the crisis? Oh well, they probably didn't read the financial reform bill before voting on it, either. No harm, no foul, then.
Summary is available here...
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Must read stories published earlier today based on the report...
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If there are any more tasty nuggets (like this one), we'll report keep you aware.
Jan 27, 2011 at 11:57 AM
Reader Comments (6)
http://www.nakedcapitalism.com/2011/01/fcic-insiders-say-report-gives-wall-street-a-free-pass-simply-sought-to-validate-conventional-wisdom-about-crisis.html
"FCIC Insiders Say Report Gives Wall Street a Free Pass, Simply Sought to Validate Conventional Wisdom About Crisis"
From the very outset, the Financial Crisis Inquiry Commission was set up to fail. Its leadership, particularly its chairman, Phil Angelides, was seen as insufficiently experienced in sophisticated finance. The timetable was unrealistic for a thorough investigation of a crisis this complex, let alone one international in scope. Its budget and staffing were too small. The investigations were further hampered by the requirement that subpoenas have bi-partisan approval along with Its decision to hold hearings with high profile individuals, including top Wall Street executives, before much in the way of lower-level investigation had been completed. The usual way to get meaningful disclosure from a top executive is to confront him with hard-to-defend material or actions; interrogations under bright lights, while a fun bit of theater, generally yield little in the absence of adequate prep.
The fourth Republican, Peter J. Wallison, who was the chief lawyer for the Treasury Department and then the White House during the Reagan administration, is offering his own, 99-page dissent, which argues that government housing policies fostered the housing bubble and the creation of 27 million subprime and so-called alt-A loans.
It was the losses associated with these weak and risky loans that brought down financial institutions, not deregulation or predatory lending, Mr. Wallison, now at the conservative American Enterprise Institute, writes. He argues that the Dodd-Frank law “seriously overreached” and will “have a major adverse effect on economic growth and job creation.”
http://finance.yahoo.com/news/Dissenters-Fault-Report-on-nytimes-1830774346.html?x=0&sec=topStories&pos=3&asset=&ccode=
http://www.reuters.com/article/2013/07/17/us-financialcrisis-fraud-probes-idUSBRE96G13620130717
"Federal prosecutors had previously ruled out criminal charges in many investigations into the causes of the financial crisis.
As part of the attempt to breathe new life into criminal cases, Federal Bureau of Investigation agents are monitoring civil fraud suits against major banks like JPMorgan Chase & Co (JPM.N) and Bank of America Corp (BAC.N), which acquired two of the largest players in the mortgage securitization world - Bear Stearns and Countrywide Financial - in 2008, according to two government sources.
FBI spokesman James Margolin said the bureau sometimes has to rely on civil court cases to turn up evidence of criminal behavior. Amy Bonitatibus, a spokeswoman for JPMorgan, and Lawrence Grayson, a spokesman for Bank of America, both declined to comment.
Civil cases can involve detailed document discovery processes and interviews that law enforcement agents may not have the time or the resources to do, Columbia University School of Law Professor Daniel Richman said.
At the greatest risk of being charged, according to legal experts who have been monitoring the fallout from the mortgage crisis, are former mid-level investment bank employees who, during the peak years of mortgage bond issuance in 2005-2007, stitched together hundreds of thousands of doomed home loans into packages and sold them as highly rated securities.
To prove any banker committed bank fraud, the government would have to show that those packaging and selling the securities deliberately lied about their quality, and that they targeted commercial banks in sales pitches."
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....As had been mentioned by Cheyenne and others, the new tactic is the old one, and it's run the clock out.
Ex-Paulson executive: Hedge fund's plans no secret in Tourre case
http://www.reuters.com/article/2013/07/17/us-sec-goldman-tourre-idUSBRE96G19720130717
[snip]
(Reuters) - A key participant in the notorious Abacus investment knew that hedge fund Paulson & Co Inc planned to bet against the deal, a former Paulson managing director said on Wednesday, potentially undercutting part of the case against Fabrice Tourre.
Former Goldman Sachs bond trader Tourre has been accused by the U.S. Securities and Exchange Commission of misleading investors in the subprime-mortgage-linked deal called Abacus 2007-AC1.
In testimony Wednesday, Paolo Pellegrini, the former Paulson & Co managing director, said he made clear to ACA Capital Holdings Inc that Paulson wanted to bet against the deal.
"As I told all collateral selection agents, we were interested in shorting a CDO, shorting subprime securities in a CDO," said Pellegrini, one of the architects of hedge fund manager John Paulson's bet against subprime mortgages in 2006 and 2007.