A bunch of NY Times stories caught my eye recently:
"Plaintiffs, led by the Public Employees’ Retirement System of Mississippi, accused rating agencies and banks of misleading them about the safety of 84 mostly investment-grade offerings of residential mortgage-backed securities.
The plaintiffs said the securities they bought were in fact “not of the ‘best quality,’ or even ‘medium credit quality.’” They said that, after being downgraded to junk status, the securities were worth far less than they paid."
As readers know, I'm all in favor of holding buyers of assets accountable, but if there is one party in the financial crisis that was most grossly negligent, in my opinion it's the ratings agencies.
I was actually going to write a slightly different version of this piece, but Sorkin beat me to it. I've been arguing with a friend lately who works in a prop trading group at a big bailed out bank. I tell him that I think that his job will be legislated away by some sort of Volcker rule, and he says it's extremely unlikely that anything actually gets passed and implemented. When I read statements like the ones out of Jamie Dimon yesterday expressing regret at using the TLGP, and out of Geithner today talking about how unfortunate the bailouts were, it actually makes me think my friend may be right. Wall Street is starting to wake up to the fact that the public is furious. Unfortunately, a fear is that they try to TALK over the issue, to avoid having legislation passed against them.
I'll let you read this one on your own. Again, readers know that I'm in favor of debtors bearing responsibility for their actions, but I wonder if the HSBC spokesman's statement “We are confident we are treating our customers fairly and with integrity,” isn't a bit of a stretch when they were charging in excess of 27% interest on a judgment for a loan that they were already owed, WHILE garnishing the borrower's wages...
Finally, a 3 week old headline:
I may have actually written about this one already, but I included it because today the headline was still on Dealbook's front page, and I misinterpreted the headline. After all, we've already provided multiple massive Ponzi-esque bailouts: the Fed buying up all the bad debt on the planet, ZIRP, TLGP, etc... Then I realized that the article was talking about bailouts for victims of actual Ponzi schemes, like Madoff, who lost "false" wealth that never really existed...