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To: goseminoles

More regulatory than accounting - but the SEC’s change to the net capital rule (playing keep up with the Euros) in the mid-2000s was a factor:

http://www.nysun.com/business/ex-sec-official-blames-agency-for-blow-up/86130


9 posted on 10/26/2010 6:14:43 PM PDT by vrwconspiracist (The Tax Man cometh)
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To: vrwconspiracist

One more observation - at the end of the day there may be massive fraud underlying many private-label MBS sold especially in 2005-2008. There are lawsuits beginning to fly - many under state law asking for recission of trades based on violations of reps and warranties - but there’s a lot of smoke and all of this can’t have been error. I believe some of the ratings agencies have also put out mea culpas on the AAA ratings they geve many of these securities - which provided tons of liquidity for loans that the banks that bought the securities could never have held in portfolio - they relied on the rating and the credit enhancement in the structures rather than the quality of the loans and underwriting. They blew a real estate bubble and like all bubbles it eventually popped.


10 posted on 10/26/2010 6:20:34 PM PDT by vrwconspiracist (The Tax Man cometh)
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