03/16/2010 06:24:47 AM EST

Michael Lewis, The Big Short

posted by sisco66

Lewis seems to be dancing around the truth a bit. In his numerous interviews he elludes to "what" actually happenend and "when" but fails to put it all in context. Maybe it's all in the book, but I have not had time to read it.
 
However, in his 60 Minutes interview he names some names, and of the 4 it's the one worth watching. No suprise that all circles back to, wait....

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.......Goldman Sachs.

What kills me is the question of why no one said anything or did anything to stop it.  The answer is that the people creating these Trojan Horse CDO's were the same people who were betting against them. Not to mention had the ability to change the rules and control regulators at will.

We knew at least two years ago that Goldman Sachs had packaged bad CDO's and conned AIG into taking bets against these ticking time bombs. Lewis confirms that, again, yet the topic has not come up in any of the interviews by Maddow or John Stewart.  The spin last night on Maddow show is now that Wall Street was a victem.

Let's recapp exactly what happened here and keep in mind that  Henry Paulson from Goldman Sachs, Ben Bernanke, Tim Geithner and Allan Greenspan are all neck deep in every one of these decision and/or actions. 

1.  Gramm, Leach, Bliley (Repeal of Glass Steagle) -1999
2. Commodities Futures Act, CFA (Enron Loop Hole by Henry Paulson and Phil Grahm) – 2000
3.  Enron begins manipulating gas and electric prices in the west – 2000
4.  Enron collapses exposing flaws and loop holes in CFMA – 2001
5.  Bush Tax Cuts accelerating inflation on top of fed rate hikes 2001-2003
6.  Double Digit inflation in housing market begins -2003
7.  Elliot Spitzer and state AG's file lawsuit to stop predatory lending practices, looses. 2003-2004
8.  Fed goes on unprecedented series of rate hikes trapping people in bad loans/credit lines 2004-2007
9.  SEC and Fed allow changes in bank capitalization rules in overheated market (40 to 1), 2004
10.  Banks pull out all stops on lending with Ninja and liar loans – 2005
11.  Bankruptcy Reform Bill – The real inherent guarantee of repayment, passed instead of stopping the predatory lending practices that allowed the ticking time bombs to be rated tripple "A"(Usury credit practices, removing  judges ability to settle debts) - 2005
12.  Mark to Market Accounting rules begin bank runs and triggering CDS payouts – 2007 (Herny Paulson & Chris Cox)
13.  Housing Market Begins to Collapse begins recession – 2007
14.  Oil Hits $140 a barrel due to excess Wall Street  leverage from the CFMA – 2008

And Chris Dodd wants to increase the Feds oversight responsibilities?



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Michael Lewis, The Big Short | 5 comments (5 topical, 0 hidden)
The government isn't going to fix this (none / 0)

I saw the 60 minutes piece as well. We have been on a steady road of deregulation since Reagan. And with each regulation that got stripped away, we got closer to a complete global meltdown.

 We can't rely on politicians to have the courage to stand up to their benefactors to fix this. Wall Street is obviously not willing to allow any meaningful regulations. 

But I don't believe that we're powerless to stop this. I know that Goldman Sachs shareholders are suing to reign in executive compensation. I believe that everyone in America with a 401k plan should also band together. 

 

I write about this here:

http://debby6669.blogspot.c om/2010/03/we-need-to-band- together-to-sue-shit.html?z x=de3986510a32f17d

by debby6669 on 03/16/2010 05:55:22 PM EST

amen (none / 0)
I live in Delaware, where AIG's thrift was based. I have been hammering our Governor to file against them for fraud. We need a trial to get the facts about Goldman out in the public.

Nothing ever goes to trial, so we never hear the truth. That's how they avoid the laws.

by sisco66 on 03/16/2010 06:21:18 PM EST

[ Parent ]
link? (none / 0)
the link brought me back here

by sisco66 on 03/16/2010 09:10:02 PM EST

[ Parent ]
What I didn't like about the 60 Min interview (none / 0)
Is that it once again tried to focus the blame for the crisis on the poor and bad credit risk people that took the home loans in the first place. This is totally bogus. If the loans weren't securitized into a giant bundle where the underlying loan data wasn't available anymore and then the bundles given a AAA rating, none of this would have happened.

There are lots of risky loans made but they're identified as such and given B or some other non Investment Grade rating to prevent pension funds and other large investors from buying them. Why? Because nearly all funds have rules about what they can invest in and for pensions it's usually AA+ or AAA only.

The rating agencies didn't do their jobs but others were in on it. How do I know? The firm I worked for at the time, a trillion dollar money manager, didn't have ANY of these on their books or on any of their clients' books. Not one. How is this possible? Hmmm.

by toosinbeymen on 03/17/2010 12:34:35 PM EST

loans (none / 0)
I felt like the loans were portrayed more like the "Mark" in the scam rather than the guilty party. In the big picture, it ain't the loans as you say that were the problem. It was Goldman Sachs ability to do manipulate the game. Something that still has not changed.

The timing of the mark to market rule changes, interest rate hikes by the fed, bankruptcy reform bill and the Bush adminstration defeat of Elliot Spitzer's attempt to stop predatory lending in 2004 are at the center of this fraud. Not to mention fall in line with Paulson's move from Sachs to Treas.

Now we find out that not only were the traders making the big bucks, but regulators were getting bonuses for "innovation" as well.  Of course innovation on wall street means stealing so.....

by sisco66 on 03/21/2010 07:38:32 PM EST

[ Parent ]
Michael Lewis, The Big Short | 5 comments (5 topical, 0 hidden)
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