A Senate committee headed by Carl Levin and Tom Coburn has issued its report on the financial crisis. As you can imagine, it's not pretty. They looked at high risk lending in the person of Washington Mutual, regulatory failures as exemplified by the Office of Thrift Supervision (OTS), inflated credit ratings issued by Moody's and S&P, and the schemes of investment banks such as Deutsche Bank and Goldman Sacks.
WaMu, like so many of its ilk, was basically greedy. Some executives argued that the housing market was in "a bubble” with risks that “will come back to haunt us.” Yet, WaMu issued hundreds of billions in mortgages that really should not have been issued.
Who was supposed to be watching WaMu? The Office of Thrift Supervision. Their peons recorded almost 500 serious deficiencies in WaMu's lending practices from 2003 to 2008. When did OTS act? A week after WaMu went belly up.
And then we have probably the major culprit in this fiasco, the credit agencies. As we know, they believed in Lake Woebegone and rated almost everybody as A or better. Again, employees there knew what was going on and warned management, which preferred to get the checks from their customers.
With Goldman it's the old matter of crappy CDOs being sold as solid investments. The investments were so solid that Goldman bet against them.
Oy vey!
WaMu, like so many of its ilk, was basically greedy. Some executives argued that the housing market was in "a bubble” with risks that “will come back to haunt us.” Yet, WaMu issued hundreds of billions in mortgages that really should not have been issued.
Who was supposed to be watching WaMu? The Office of Thrift Supervision. Their peons recorded almost 500 serious deficiencies in WaMu's lending practices from 2003 to 2008. When did OTS act? A week after WaMu went belly up.
And then we have probably the major culprit in this fiasco, the credit agencies. As we know, they believed in Lake Woebegone and rated almost everybody as A or better. Again, employees there knew what was going on and warned management, which preferred to get the checks from their customers.
With Goldman it's the old matter of crappy CDOs being sold as solid investments. The investments were so solid that Goldman bet against them.
Oy vey!
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