Holding Wall Street Accountable
http://thedianerehmshow.org/shows/2011-11-30/holding-wall-street-accountable
A federal judge in New York has rejected a proposed settlement between the SEC and Citigroup. The SEC claimed Citigroup knowingly misrepresented the value of mortgage backed securities in the run-up to the 2008 financial meltdown. In the settlement Citigroup would have been forced to pay a fine but would not have been required to admit to any wrongdoing. The ruling raises the stakes for both parties, and for many others who continue to wonder why so few of the players alleged to have had a hand in the 2008 near collapse of the U.S. financial system have paid a price: Ongoing efforts to hold Wall Street accountable.
Guests
Michael Greenberger
director, Center for Health and Homeland Security at the University of Maryland; former senior regulator, Commodities Futures Trading Commission.
Peter Wallison
Arthur F. Burns fellow in financial policy studies at the American Enterprise Institute; served as general counsel of the U.S. Treasury department in the Reagan Administration
Gretchen Morgenson
Pulitzer Prize-winning business reporter and columnist for The New York Times; co-author of the book, “Reckless Endangerment”
Harvey Pitt
former chair, SEC
Kalorama Partners, LLC
Comments
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Mr Wallison's claim that the financial crisis was caused by government policy alone and that the private market had no fault is like claiming the tail was wagging the dog. What the AEI and this ideologue included are trying to do is make sense of their world view that has been shattered. Their claims that the markets could regulate themselves... that fraud is not an issue because investors will mark it into the market price and that markets would punish bad behaviour has proved to be extremely naive.
His selective use of the facts and history doesn't hide the fact that at the hight of the subprime boom, private market mortgages were 84% of the market. Of the subprime loans that were made, 30% were guaranteed to fail, so called "liars loans" or Alt-A (e.g. no underwriting). As long as housing prices went up, the ponzi scheme kept going. I'm sorry Mr Wallison but WAMU and Countrywide's liars loans were not driven by Government policy and were COMPLETELY driven in the private sector misincentives.
The fraud happend because the Fed like you believe the mortgage market would govern itself. Your selective use of facts and rewriting of history can't change the facts that drove the crisis and that this event was a huge blow to your faith based Economic ideology.
Please avoid including these Economic hacks on your program in the future. They add little to the discussion and their selective use of the facts only serve to mislead the rest of us.
And for the faith-based Economic adherants who will argue like Mr Wallison that there was no fraud, I suggest the following article that is a good primer done by Economist Bill Black:
http://www.financialsense.com/financial-sense-newshour/guest-expert/2011...
and reporting: http://www.mcclatchydc.com/2008/10/12/53802/private-sector-loans-not-fan...
I take heart from the excellent and thorough comments here debunking the AEI guy's Big Lies.
So, why wasn't he called on them as he almost smugly kept repeating them?????
I mean this sincerely and seriously...WHY don't our representatives from the MCM ever bother to call guests, even other reporters, on outright lies?
I asked earlier if it was because they felt it was "impolite"..or "impolitic." Is it because the Powers That Be will cut off access to any real reporters who report the facts as they are and not as they are spun or made up by these Powers That Be?
Once I had such great respect for many reporters. Sadly, that has dwindled and become skepticism for what many reporters of the MCM (Mainstream Corporate Media) now say and write. I know that I must dig further because we are so seldom given the actual story, the real facts, but only shaded and spun factoids. The better to bamboozle us?
When I think about things I miss, this is one of them: A press which I can trust.