Mystery Men of the Financial Crisis

New York Times ^ | February 4, 2010 | William D. Cohan

[lbryce]

Now that we have pulled back sufficiently far from the near “destruction of the modern financial system” — as the former Treasury Secretary Henry Paulson described the events of 2008 in his new memoir, “On The Brink” — to focus on how to prevent such a calamity from recurring, the time has come to hear from those players in the drama who really know what happened and why.

Until people such as Warren Spector, the former co-president and head of the fixed-income division at Bear Stearns, and Dan Jester, a mysterious former Goldman Sachs banker turned Treasury official — among many others — come forward and share with us the roles they played before, during and after the crisis, there is little hope that the members of Congress working on financial reform legislation will be able to craft a bill that will succeed in its mission, and the longer they will spend dithering with the ill-conceived ideas being pushed by the former Fed Chairman Paul Volcker.

To date, these elusive but important Wall Street executives have kept an exceedingly low profile, hoping against hope that the whole thing just blows over. We can’t let that happen. There is just too much at stake now, and Wall Street has proved repeatedly over the past 40 years — since the firms went from private partnerships (where partners had their entire net worth on the line) to public companies (where bankers and traders were encouraged to take huge risks with other people’s money) — that it is incapable of regulating itself.

We need to get beyond the amusing political theater of the recent Financial Crisis Inquiry Commission hearings featuring tight-lipped Wall Street chief executives like Lloyd Blankfein of Goldman, John Mack of Morgan Stanley and Jamie Dimon of JPMorgan Chase

[lbryce]

This is a remarkable call for accountability, transparency at whar is nothing less than the very preservation of our beloved republic regarding,the events that led up to the financial meltdown the repercussions of most of which still lurking over the horizon,

The fact is we all know more or less those who were involved in this crisis how it evolved, mushroomed into what some fear might well be the seeds of our very destruction.

While it an audacious move in the hopes of getting to the heart of the matter, I am afraid it might not ever see the light of day.

The fact is, as we know more or less, where culpability lies in this crisis, where the buck never did stop, as being widespread, reaching the very height of power and influence in this country and if accountability is ever going to be attained, there's just not going to be anyone left to run the government.

[G Larry]

BUMP!

[hennie pennie]

*ping*

[Wolfie]

All sound and fury, signifying nothing.

Accountability? Sure thing. Meanwhile, the new “regulatory” Bill making it’s way through Congress ensures $4 Trillion of our tax dollars for future bailouts.

[csmusaret]

I admit to being naive to the ways of high finance, but weren’t derivatives the reason the crisis was so deep, far reaching, and hard to bring under control?

[concerned about politics]

there is little hope that the members of Congress working on financial reform legislation will be able to craft a bill that will succeed in its mission, and the longer they will spend dithering with the ill-conceived ideas

The Community Reinvestment Act, i.e., housing loans to those who can't afford to pay them back, has to be eliminated. Until the dems stop giving away the fort to people who have done nothing to earn it, these people are just going to keep raping the system.
This will keep happening over again and again until they dump this act. You can't keep poring water down the drain and expect the well to remain full.

[mo]

These guys need a Pecora Commission to enemize the industry....

http://en.wikipedia.org/wiki/Pecora_Commission

[Arthur Wildfire! March]

related links:

More light shed on the way we are economically manipulated.
Russia Urged China to Dump FANNIE, FREDDIE Bonds...
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=afbSjYv3v814
http://www.freerepublic.com/focus/f-news/2441326/posts
“This is indicative of how dangerous the Chinese holdings of U.S. debt are. It is a huge financial weapon ...”

Barney Frank gets clarity. Finally
http://www.freerepublic.com/focus/f-news/2441738/posts
WASHINGTON - Barney Frank has been one of the staunchest defenders of Fannie Mae and Freddie Mac and their mission to increase access to affordable housing. Now he’s helping to lead the charge to dismantle the troubled mortgage giants.
[Would that be because of Paulson’s book now revealing the Russia/China negotiations to sabotage our economy?]

[In light of Russia’s attempt to manipulate Fannie/Freddie bailout during China’s Olympics ...]
YouTube:Shocking Video Unearthed Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis
http://www.youtube.com/watch?v=_MGT_cSi7Rs&feature=channel_page

More light shed on the way we are economically manipulated.
Russia Urged China to Dump FANNIE, FREDDIE Bonds...
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=afbSjYv3v814
http://www.freerepublic.com/focus/f-news/2441326/posts
“This is indicative of how dangerous the Chinese holdings of U.S. debt are. It is a huge financial weapon ...”

[Arthur Wildfire! March]

The Economic Meltdown Plot thickens. [Summary link blast in previous post.]

Other shockers:

Struck Down: Feds Refuse to Explain How Agent Injured Daily Caller Writer
http://www.freerepublic.com/focus/f-news/2444627/posts

Edward Chen [A Zero Judicial Favorite to keep us “bitter clingers” in line]
Senate Panel Backs Obama’s Judge Nominee [Former Radical ACLU Lawyer: Tried Overturning Prop.209]]
http://www.freerepublic.com/focus/f-news/2444644/posts

[Arthur Wildfire! March]

On Rush yesterday: Obama postponed aid to Haiti for the Superbowl.
[There’s so much Super Bowl advertising that I can’t find a link in Google.]

[LomanBill]

[there is little hope that the members of Congress working on financial reform legislation will be able to craft a bill that will succeed in its mission,]

 

Then craft a bill that simply confines governance (financial and otherwise) to the specified purpose, the specified mission - for American governance: "TO SECURE THESE RIGHTS, governments are instituted among men".

[LomanBill]

[Until people such as Warren Spector, the former co-president and head of the fixed-income division at Bear Stearns, and Dan Jester, a mysterious former Goldman Sachs banker turned Treasury official — among many others — come forward and share with us the roles they played before, during and after the crisis]

 

Paulson is so full of it.   That's like waiting for the snakes to tell about how they looted the eggs from the henhouse.   Ain't gonna happen - and he knows it.

 

How 'bout if Congress just does its job for a change? 

 

"TO SECURE THESE RIGHTS, governments are instituted among men"

 

The job of Congress being to Secure the rights of the governed by keeping the snakes, like Paulson, out of the henhouse in the first place!

[Neidermeyer]

MYSTERY MEN!

[PGalt]

Interesting article in that secondary names are mentioned. Good comments at the source.

“TO SECURE THESE RIGHTS, governments are instituted among men”

BUMP!

“It is impossible to introduce into society a greater change and a greater evil than this: the conversion of the law into an instrument of plunder.” - The Law - Frederic Bastiat 1801-1850

[Leisler]

It goes back to the nature of our banking system. We have fractional reserve banking. Ten dollars is deposited in a bank, and it can lend out a hundred dollars. This is the law. It is lawful.

If the economy contracts, loses, whatever ten percent, the shock is increased back to the banks, all through the lending, loan, credit system.

Everybody starts running for cover. Kind of a musical chairs. There are only 9 chairs worth of money for ten economic actors. Some people try to sit on two chairs, cahos.

Further. During the boom times, there is a lot of bad, poorly run business going on, but the easy money hid it. GM for example. When money got tight, credit got tight, customers few, prices squeezed, all sorts of lousy run, corrupt run, weak, poorly run companies, like old infected deers in a harsh winter, got killed off, or should of, but got bailed out by you and me. GM, AIG, ect.

Derivatives are everywhere, and have been. Nothing wrong or right with that.

On the plus side. People will go to school to learn( some, anyways ), people like to buy, other people like to sell, people like nice houses and new cars. Kids get born, old die. All the true, real economy exists as it has always. We just, unfortunately, have a predominantly leftist elite and political class that get’s in the way of us all sorting it out, pushing the old economy off on a iceberg and getting our new economy on it’s feet.

[Leisler]

[PGalt]

ABSOLUTELY!

[csmusaret]

Thanks for the explanation. I have been told that derivatives exacerbated the bad loan problems. They took one bad mortgage and spread it throughout several different portfolios. I would appreciate your thoughts on that.

[Toddsterpatriot]

Ten dollars is deposited in a bank, and it can lend out a hundred dollars. This is the law. It is lawful.

So you open a new bank. I'm the only depositor and I put in $10, say 10 singles.

Next guy comes in to borrow $100. Show me how you make that happen with only 10 singles in the vault. Thanks.

[Leisler]

I had a uncle who had a GM dealership and I wanted/needed a new car, just for transportation, so he basically gave me a striped down Chevette, which was a fine car for my needs and wallet. He had a bunched parked out back and said pick one.

I asked him why he had so many, and he said that in order for him to get the cars his customers really wanted, and he could make money on, GM also said you got to take these and move them, or else.

So too with poorer quality goods in other markets. Anyone can sell, move the good in demand stuff. Kind of like being in the Army and you getting a few good troops that would do the work of three without baby sitting, you also got to take a few dolts that everyone is trying to palm off on each other.

I’m sure the financial institutions could and did buy really nice blends of mortgages, but they were expensive, so they moved down the quality blend. There is fundamentally nothing wrong with this, it is common everywhere, a fact of business life. You want the good stuff, you got to take some of my lower quality goods too.

Actually, I’ve been a fan of even poor people getting credit the last decade or so. It is that credit market changed, er...provided credit faster than the real world market could, say, build houses. So, for quite a while we had a lot of credit pouring into a housing market that couldn’t keep up, physically, with building housing stock. More money, not so much more houses, price go up...speculators...and well, we know the rest of the story.

I’m in construction which is really really bad right now. But, looking back the last fifteen years, for the nation it has been good. We built a lot of house, most of which will be standing and housing people long after our children or their children are dead. And, long after this mess in our laps is long forgotten.

As for the deritives, I blam not having these ‘instriment’ registered in a controled market, like a stock exchange. Or, as is the case, these were unregistered so called securities, well fine, that is a private matter and should not be bailed out or supported by the citizens at large. All these finacial types, banks, AIG...are all big boys, well educated, well paid. Let them figure it out, and eat the losses. Like I said, the rest of us in the real, rubber meets the road, go to work every morning, do what it takes ecomomy, we don’t really need them. They need us. We are the foundation, the bedrock.

Bush, Congress, Paulson should of fire stopped at us and let the fire burn out AIG, Citi...etc.

I’m afraid the fuel, the dead wood is still out there.