http://www.nytimes.com/2011/04/14/business/14crisis.html?pagewanted=1&_r=1(snip)
The 650-page report, “Wall Street and the Financial Crisis: Anatomy of a Financial Collapse,” was released Wednesday by the Senate Permanent Subcommittee on Investigations, whose co-chairmen are Carl Levin, a Michigan Democrat, and Tom Coburn, a Republican of Oklahoma. The result of two years’ work, the report focuses on an array of institutions with central roles in the mortgage crisis: Washington Mutual, an aggressive mortgage lender that collapsed in 2008; the Office of Thrift Supervision, a regulator; the credit ratings agencies Standard & Poor’s and Moody’s Investors Service; and the investment banks Goldman Sachs and Deutsche Bank.
“The report pulls back the curtain on shoddy, risky, deceptive practices on the part of a lot of major financial institutions,” Mr. Levin said in an interview. “The overwhelming evidence is that those institutions deceived their clients and deceived the public, and they were aided and abetted by deferential regulators and credit ratings agencies who had conflicts of interest.”
The bipartisan report includes 19 recommendations for changes to regulatory and industry practices. These include creating strong conflict-of-interest policies at the nation’s banks and requiring that banks hold higher reserves against risky mortgages. The report also asks federal regulators to examine its findings for violations of laws.
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S&P’s Negative Call Stems From Crisis That Some Say It Caused
http://www.cnbc.com/id/42650973After laying out the strengths of the U.S. and reasons why it is maintainiing the country's highest "AAA" rating, the first reason presented in Standard & Poor’s market-pummeling note for its change to a negative outlook for the country is the financial crisis.
“We note the U.S.'s fiscal profile has deteriorated steadily during the past decade and, in our view, has worsened further as a result of the recent financial crisis and ensuing recession,” said Nikola Swann, in the fourth paragraph of the S&P note. “Moreover, more than two years after the beginning of the recent crisis, U.S. policymakers have still not agreed on a strategy to reverse recent fiscal deterioration or address longer-term fiscal pressures.”
Many investors found the statement ironic, because they believe S&P’s triple-A credit ratings on mortgage-backed securities were a key factor in allowing the investment banks to propel the housing bubble into the stratosphere on the back of bad loans disguised as good credit. It is the housing crash that is the number one reason for the budget shortfalls the country faces today.
“The emperor is naked, but he’s been so for years,” said Patty Edwards of Trutina Financial. “I’m struck by the irony that it is the tailor who sold the emperor the non-existent suit who is now pointing fingers.”
(end snip)
Methinks somebody might be bettin' against America. But then, Greenspan just thinks I am a parasite.
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