Slashdot Mirror
Email Trails Show Bankers Behaving Badly
An anonymous reader writes "The New York Times is running a pair of stories about U.S. financial institutions being investigated by the Federal government and courts for alleged systemic and illegal activities that helped bring about the housing crisis and collapse of the world economy in 2008. Emails produced during courtroom discovery reveal that insiders at JP Morgan Chase knew that the bundles of securities they were marketing to investors were rotten with bad loans. And emails show the credit rating agency Standard & Poor's (a division of McGraw-Hill) was determined to stop losing deals to its competitors by being too tough on the banks whose products they were evaluating."
As someone who has been through an E-Discovery process (lawsuit by a patent troll we were fighting) there is amazing forensic analysis technology that goes into collecting and collating emails, IM's, and documents.
Suppose you were an idiot and suppose you were a member of Congress
Those "bag-of-shit" securities were, in very large part, guaranteed by the US Gov't. That Wall Street Banks offered crap investment opportunities that no one understood is nearly as bad as the so-called investors who bought them with an equal lack of understanding, and don't get me started on people who "bought" homes they could never, ever make the payments on that formed the basis for the "bag-of-shit" investments no one understood.
That they were "highly-rated" by the security analyst firms means very little - I'll leave you with this sage advice from that classic film "Tommy Boy"
Ken
To be frank, deregulation has started in the 80s, with Reagan, Thatcher in the UK, and then continued with Bush senior and Clinton. A key event being the abrogation of the Glass Stingall Act, which separated retail and investment banking. This Act had been put in place after the crisis of 1929, to... avoid a new crisis. Obviously lessons are quickly forgotten when a lot of money are involved. Watch the documentary "Inside Job" for more about this.
Hell, the definition of "sub-prime" is "Freddie and Fannie won't touch this".
Freddie and Fannie didn't insure a single one of these mortgages. Their problem is that they got suckered into backing their prime mortgage insurance business with investments that had been rated AAA by S&P.
If I have been able to see further than others, it is because I bought a pair of binoculars.