Why isn't Wall Street in jail?

they cant find the mortgages to back the loan packages, say 5, 1 million dollar mortgages were sold as a 5 million dollar credit swap,without the paper to prove or legitimize the 5 million dollar note,what's to stop them from selling the same $5 note 5 times for $25.i dont have the article but they said something like 10 times the outstanding mortgage debt was sold,do you have to wait to see it,to believe it,..they are not going to show it to anyone, thats why wall street is not in jail,s they gave us bernie madoff,last time is was martha stewart,2000 years ago, they cried "free barabus"
 
they cant find the mortgages to back the loan packages, say 5, 1 million dollar mortgages were sold as a 5 million dollar credit swap,without the paper to prove or legitimize the 5 million dollar note,what's to stop them from selling the same $5 note 5 times for $25.i dont have the article but they said something like 10 times the outstanding mortgage debt was sold,do you have to wait to see it,to believe it,..they are not going to show it to anyone, thats why wall street is not in jail, they gave us bernie madoff,last time it was martha stewart,2000 years ago, they cried "free barabus"
 
At the same time you could get cds protection for a penny on the dollar. It was a good idea to have it even if you didnt think defaults would increase. You could get a billion dollars insurance policy for 10 million dollars a year that's a very low risk bet.

The whole creation of cdos and cds was to allow people to bet on mortgages without having to waste time on actually making a mortgage
 
This has been hashed over many times. There is nothing inherently wrong with securitizing mortgages. It makes them more attractive to investors and thus increases the amount of mortgage money available for lending. However there is something wrong with liar loans.

Also, it is probably a very bad idea to permit someone to take out an insurance policy on an asset they don't own, and an even worse idea to issue thousands of insurance policies on the same asset, that again, the purchasers of the policies do not own. We called these policies credit default swaps, because had we called them insurance policies they would have been regulated as such.

If a hundred of you guys all take out fire insurance policies on my home, I want to know. I also want to know if those policies are being traded like hot potatoes at appreciated prices. I might, in that case, want to have a firetruck at the ready in my driveway. :D
 
Quote from piezoe:

it is probably a very bad idea to permit someone to take out an insurance policy on an asset they don't own,
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Ya mean like writing a naked option? Yes. Bad idea.

EDIT: I meant selling the policy is comparable to selling an option. But you knew that.
 
Quote from Pekelo:

It is like saying, this was a bad movie but not explaining why. Your response is highly questionable.

Point out problems in the article and we are talking...
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For one, a real journalist does not use strong language just to use strong language. He or she lets the content of their argument speak for itself. Sure it probably makes for entertaining reading but it makes him appear to be biased and not worth taking seriously. For example,

Because the entire system set up to monitor and regulate Wall Street is fucked up.

In theory, it's a well-oiled, tag-team affair: Billionaire Wall Street Asshole commits fraud, the NYSE catches on and tips off the SEC, the SEC works the case and delivers it to Justice, and Justice perp-walks the Asshole out of Nobu, into a Crown Victoria and off to 36 months of push-ups, license-plate making and Salisbury steak.

But a veritable mountain of evidence indicates that when it comes to Wall Street, the justice system not only sucks at punishing financial criminals, it has actually evolved into a highly effective mechanism for protecting financial criminals.

All of which raises an obvious question: Why the hell not?
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Also, a real journalist does not simply throw out assertions without any facts to back those statements up. For example,

Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling.

Instead, federal regulators and prosecutors have let the banks and finance companies that tried to burn the world economy to the ground get off with carefully orchestrated settlements — whitewash jobs that involve the firms paying pathetically small fines without even being required to admit wrongdoing.

Indeed, the shocking pattern of nonenforcement with regard to Wall Street is so deeply ingrained in Washington that it raises a profound and difficult question about the very nature of our society: whether we have created a class of people whose misdeeds are no longer perceived as crimes, almost no matter what those misdeeds are.

In the late 1990s, the agency had an open-and-shut case against the Rite Aid drugstore chain, which was using diabolical accounting tricks to cook their books.

But in the end, the SEC's punishment for Sunbeam's CEO, Al "Chainsaw" Dunlap — widely regarded as one of the biggest assholes in the history of American finance — was a fine of $500,000.

Dunlap passed the time collecting royalties from his self-congratulatory memoir.

Pause for a minute to take this in. Aguirre, an SEC foot soldier, is trying to interview a major Wall Street executive — not handcuff the guy or impound his yacht, mind you, just talk to him.

In the case of Lehman Brothers, the SEC had a chance six months before the crash to move against Dick Fuld, a man recently named the worst CEO of all time by Portfolio magazine.

The law firm that helped craft the fine print, Simpson Thacher & Bartlett, would later receive a lucrative federal contract to serve as legal adviser to the TARP bailout.

Three weeks later, Budde was shocked to see Fuld testifying before the House Government Oversight Committee and whining about how poor he was. "I got no severance, no golden parachute," Fuld moaned.

Meanwhile, in a demonstration of the government's priorities, the Justice Department is proceeding full force with a prosecution of retired baseball player Roger Clemens for lying to Congress about getting a shot of steroids in his ass. "At least Roger didn't screw over the world," Budde says, shaking his head.

The investment bank used an absurd accounting trick called "Repo 105" transactions to conceal $50 billion in loans on the firm's balance sheet.

As chief of AIGFP, the firm's financial products subsidiary, Cassano repeatedly made public statements in 2007 claiming that his portfolio of mortgage derivatives would suffer "no dollar of loss" — an almost comically obvious misrepresentation.

He has not had to pay back a single cent out of the hundreds of millions of dollars he earned selling his insane pseudo-insurance policies on subprime mortgage deals. Now, out from under prosecution, he appeared before the FCIC and had the enormous balls to compliment his own business acumen, saying his atom-bomb swaps portfolio was, in retrospect, not that badly constructed. "I think the portfolios are withstanding the test of time," he said.

Goldman Sachs paid $550 million last year when it was caught defrauding investors with crappy mortgages, but no executive has been fined or jailed — not even Fabrice "Fabulous Fab" Tourre, Goldman's outrageous Euro-douche who gleefully e-mailed a pal about the "surreal" transactions in the middle of a meeting with the firm's victims.

Their penalties, combined, came to a whopping $180,000.

That makes SEC officials like Paul Berger and Linda Thomsen the equivalent of college basketball stars waiting for their first NBA contract. Are you really going to give up a shot at the Knicks or the Lakers just to find out whether a Wall Street big shot like John Mack was guilty of insider trading?

Budde, the former Lehman lawyer, says it's well known that all the best legal minds go to the big corporate law firms, while the "bottom 20 percent go to the SEC."

If talent rises in the SEC or the Justice Department, it sooner or later jumps ship for those fat NBA contracts. Or, conversely, graduates of the big corporate firms take sabbaticals from their rich lifestyles to slum it in government service for a year or two.

Which is not to say that the Obama era has meant an end to law enforcement. On the contrary: In the past few years, the administration has allocated massive amounts of federal resources to catching wrongdoers — of a certain type. Last year, the government deported 393,000 people, at a cost of $5 billion. Since 2007, felony immigration prosecutions along the Mexican border have surged 77 percent; nonfelony prosecutions by 259 percent. In Ohio last month, a single mother was caught lying about where she lived to put her kids into a better school district; the judge in the case tried to sentence her to 10 days in jail for fraud, declaring that letting her go free would "demean the seriousness" of the offenses.

So there you have it. Illegal immigrants: 393,000. Lying moms: one. Bankers: zero. The math makes sense only because the politics are so obvious. You want to win elections, you bang on the jailable class. You build prisons and fill them with people for selling dime bags and stealing CD players. But for stealing a billion dollars? For fraud that puts a million people into foreclosure? Pass. It's not a crime. Prison is too harsh. Get them to say they're sorry, and move on. Oh, wait — let's not even make them say they're sorry. That's too mean; let's just give them a piece of paper with a government stamp on it, officially clearing them of the need to apologize, and make them pay a fine instead. But don't make them pay it out of their own pockets, and don't ask them to give back the money they stole. In fact, let them profit from their collective crimes, to the tune of a record $135 billion in pay and benefits last year. What's next? Taxpayer-funded massages for every Wall Street executive guilty of fraud?
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These are just examples of statements that he makes that if you read carefully show that he is clearly biased and is not reporting objectively. He is trying to plant ideas in your mind without actually coming out and saying them directly.

I'm sure there is some truth in his articles, but I can't take him seriously with all the grandstanding he does plus the implied assertions he continually makes with no factual evidence. But if that's your cup of tea, then go for it.
 
The criticism lobbed at Taibbi, IMHO, is what is called "picayune". Also, I'd argue against this notion that his vitriol and venom is solely targeted at bankers. Instead, he does a convincing job of targeting bankers, politicians, the court system, etc, etc...Many conservatives take issue with him because he makes alot of left wing talking points, but that is also a problem with our current times. The two parties are so polarized on critical issues, that anything that does not fall concisely into the ideology of the separate parties becomes a hot button issue.

I believe many of his criticisms are far more libertarian in nature than anything else. I've read every article he's written and that's my take on the matter.
 
Quote from sprstpd:

For one, a real journalist does not use strong language just to use strong language. He or she lets the content of their argument speak for itself. Sure it probably makes for entertaining reading but it makes him appear to be biased and not worth taking seriously. For example,



Also, a real journalist does not simply throw out assertions without any facts to back those statements up. For example,



These are just examples of statements that he makes that if you read carefully show that he is clearly biased and is not reporting objectively. He is trying to plant ideas in your mind without actually coming out and saying them directly.

I'm sure there is some truth in his articles, but I can't take him seriously with all the grandstanding he does plus the implied assertions he continually makes with no factual evidence. But if that's your cup of tea, then go for it.
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Show me these REAL journalists. It's laughable that you've lobbied these critiques based on the style of his prose, as opposed to the content.

He, along with many other upstart "journalists" are de-facto bloggers who make it to print as well. They are a different generation, with different attitudes and opinions. By and large, these supposed journalists are lackey's who have been captured by the special interests that run the ship at the larger publications.

It's a big reason why the blogosphere has captured such a large audience. Nobody needs to worry if they are pissing on the shoes of their advertisers.
 
Quote from denner:

Show me these REAL journalists. It's laughable that you've lobbied these critiques based on the style of his prose, as opposed to the content.
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I've critiqued his content as well. You should reread my selections more slowly.

Any "journalist" that continually uses swear words and blows things out of proportion in a large percentage of their sentences is someone that is not credible.
 
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