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Email Trails Show Bankers Behaving Badly

samzenpus posted about a year ago | from the sniffing-out-the-rats dept.

Businesses 251

An anonymous reader writes "The New York Times is running a pair of stories about U.S. financial institutions being investigated by the Federal government and courts for alleged systemic and illegal activities that helped bring about the housing crisis and collapse of the world economy in 2008. Emails produced during courtroom discovery reveal that insiders at JP Morgan Chase knew that the bundles of securities they were marketing to investors were rotten with bad loans. And emails show the credit rating agency Standard & Poor's (a division of McGraw-Hill) was determined to stop losing deals to its competitors by being too tough on the banks whose products they were evaluating."

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251 comments

Avoid Linux! (-1)

Anonymous Coward | about a year ago | (#42831113)

Anyone who has had sexual intercourse with Eric S. Raymond and/or uses Linux should go and get an AIDS test immediately!

Eric, known as ESR in certain circles, is one of the most sexually-promiscuous people in the Open Source community. For example, he’s currently sleeping with two unemployed Linux hobbyists on a regular basis who do all sorts of sick, depraved shit with him like shoving Twinkies up their asses so that Eric can suck the filling out.

Another instance of Eric's disgusting behavior is when he and his Linux losers held what is known in the industry as a “Linux party.” Think that means some kind of icecream social? Think again! One night, Eric held Linus Torvalds at gunpoint and almost choked him to death on a giant turd, after which he gained root access to the Linux code server. Eric likes to pistol-whip geeky programmers and get his penis and gun barrels licked clean.

Eric Raymond gives little regard to whom he sleeps with or what they may be infected with. His is a pathological obsession for attention caused by years of Linux programming and self-aggrandizement. When asked by a Linux user group to speak publicly at their next meeting, Eric ended up having sex in the bathroom with one of their members and throwing up all over the place. And let’s not even get into the time that Eric managed to shit into the brownie mix at a LAN party!

Eric also has surprise sex whenever he can. One time, he visited Rob Malda, the founder of Slashdot.org. After breaking into Rob's place, Eric was seen exiting the property house at dusk, throwing empty bottles of Jägermeister after what neighbors called a “loud night of moaning and fighting.” Rob allegedly suffered bowel-incontinence for the next several days. He certainly didn't post any stories to Slashdot for a while after Eric's visit!

Because of this kind of depraved, wanton activity Eric has seen “odd results” on his last several AIDS tests, but he insists that there must be a bug in their testing software. Maybe it’s running Linux?!

If you think retroviruses, gunplay, and herbal liqueur are sexy, go for it. As long as you tell Eric that you're a Linux user, he won’t turn you down.

Otherwise, steer clear of this walking Open Source sewer. Not only will you contract one of Eric’s diseases but you will have the shame of appearing on his list of one-night stands and Linux butthole rape. That’s not something anyone should want or be proud of—except Eric S. Raymond.

Re:Avoid Linux! (-1)

Gaygirlie (1657131) | about a year ago | (#42831573)

I don't know why someone would write something like that, but your post has quite the opposite effect of what you seem to aim for: I didn't know who this ESR - character was, but this comment prompted me to look him up and the kind of work he has done.

Re:Avoid Linux! (0)

Anonymous Coward | about a year ago | (#42831623)

How did it have the opposite effect? You responded. That was the effect they wanted.

Re:Avoid Linux! (-1)

Gaygirlie (1657131) | about a year ago | (#42831697)

How did it have the opposite effect? You responded. That was the effect they wanted.

I assumed the effect the OP was looking for was some sort of angry or distraught responses as trolls usually seek for. I found the post quite funny, plus I learned something new today by reading about this Eric S. Raymond, so that's not quite the same thing.

News for Nerds??!! (-1)

Anonymous Coward | about a year ago | (#42831121)

This is kind of interesting, but there is no relevance to nerd news here. The summary is incredibly wrong and the premise just doesn't hold up. When slashdot tries to post general news, it goes horribly wrong.

Stay in your lane editors. This stuff doesn't belong here.

Re:News for Nerds??!! (-1)

Anonymous Coward | about a year ago | (#42831139)

You will bow down to the clickbait provided by our Dice Holdings overlords!

Re:News for Nerds??!! (4, Funny)

JustOK (667959) | about a year ago | (#42831145)

It mentions email, and email is very techy. You need computers and stuff.

Re:News for Nerds??!! (0)

Anonymous Coward | about a year ago | (#42831233)

Confirmed. Remember, this was back in the days before iPads and such.

Re:News for Nerds??!! (1)

Desler (1608317) | about a year ago | (#42831171)

It's better than a post by that Bennett blowhard or the blatant Dice ad in the Red Hat post.

Re:News for Nerds??!! (1)

Anonymous Coward | about a year ago | (#42831181)

What's wrong about it? As far as I'm concerned, that is pretty (disgustingly) accurate...

It turned out that e-mails are used as evidence. One could say that's computer technology related... It's not like those were written notes or something.

Re:News for Nerds??!! (4, Informative)

gander666 (723553) | about a year ago | (#42831217)

As someone who has been through an E-Discovery process (lawsuit by a patent troll we were fighting) there is amazing forensic analysis technology that goes into collecting and collating emails, IM's, and documents.

Re:News for Nerds??!! (0)

Anonymous Coward | about a year ago | (#42831431)

As someone who has been through an E-Discovery process (lawsuit by a patent troll we were fighting) there is amazing forensic analysis technology that goes into collecting and collating emails, IM's, and documents.

Unless there's a crime involved. Then the FBI just comes in and starts ripping hard drives out of chassis with an "amazing forensic" tool, also known as a hammer.

Never underestimate the computing ignorance of our grade-F government.

Re:News for Nerds??!! (1)

Nyder (754090) | about a year ago | (#42831981)

As someone who has been through an E-Discovery process (lawsuit by a patent troll we were fighting) there is amazing forensic analysis technology that goes into collecting and collating emails, IM's, and documents.

Unless there's a crime involved. Then the FBI just comes in and starts ripping hard drives out of chassis with an "amazing forensic" tool, also known as a hammer.

Never underestimate the computing ignorance of our grade-F government.

They don't use a hammer, that could damage the drives. If the drives in are in servers, you can just pull them out.

Anyways, they don't carry a hammer, it gets in the way of them carrying some sort of automatic weapons you see in the photos and videos. Because you know, them HD's are dangerous, they spin fast.

Re:News for Nerds??!! (0)

Anonymous Coward | about a year ago | (#42831769)

As someone who has been through an E-Discovery process (lawsuit by a patent troll we were fighting) there is amazing forensic analysis technology that goes into collecting and collating emails, IM's, and documents.

So, you've discovered how to use grep?

Re:News for Nerds??!! (1, Offtopic)

Sarten-X (1102295) | about a year ago | (#42831795)

Now if only that were part of the story, then it'd be suitable for placement here (though it could be in TFA, which of course I haven't read, in which case the summary is off-topic).

This story is just for invoking the rage of Slashdotters, as so many stories of late (by which I mean the past few years, at least) are. Nerds are, on the whole, highly-intelligent idealists. We love to tell others how things should be done, especially when they're outside the field of technology, so we don't have to worry about other perspectives. Add to that the hatred of the rich and distrust of banks, with a bit of conspiracy theory for flavor, and you have a perfect recipe for a sensational Slashdot story.

Nobody's surprised that bankers screwed up. They took their bad securities, mixed them together with securities that other banks said were good, then sold the whole thing saying it's good... only for others to mix in their own bad securities and reiterate. Some noticed, some didn't, and some noticed but didn't want to do anything about it. That sucks.

Meanwhile, IT admins around the world are requiring weak passwords, moving vital data to cloud services without backups, and putting servers under water lines. We all do things to make the world worse, but for now it's just the bankers who are presented as evil for it.

Re:News for Nerds??!! (0)

Anonymous Coward | about a year ago | (#42831467)

Oh, those poor goats...

Re:News for Nerds??!! (3, Interesting)

crazyjj (2598719) | about a year ago | (#42831243)

Obviously you don't appreciate how many nerdy quants there were on Wall Street painting over these bag-of-shit securities packages with a fresh coating of technical bullshit to make them look like roses.

Re:News for Nerds??!! (4, Insightful)

fuzzyfuzzyfungus (1223518) | about a year ago | (#42831315)

Given that the dumb fuckers who get caught passing a few thousand in bad checks tend to do more time than the smart fuckers who get caught passing a few billion in bad securities tend to do more time, I'd say that the quants are on to something...

(Can you imagine what would happen to sentencing guidelines if we decided 'fuck this shit' and started punishing large scale fraud with the same sorts of time-per-thousand-dollars-stolen that we do for blue-collar economic crimes?)

Re:News for Nerds??!! (5, Informative)

kenh (9056) | about a year ago | (#42831511)

Those "bag-of-shit" securities were, in very large part, guaranteed by the US Gov't. That Wall Street Banks offered crap investment opportunities that no one understood is nearly as bad as the so-called investors who bought them with an equal lack of understanding, and don't get me started on people who "bought" homes they could never, ever make the payments on that formed the basis for the "bag-of-shit" investments no one understood.

That they were "highly-rated" by the security analyst firms means very little - I'll leave you with this sage advice from that classic film "Tommy Boy" [youtube.com]

Re:News for Nerds??!! (4, Insightful)

Anonymous Coward | about a year ago | (#42832055)

and don't get me started on people who "bought" homes they could never, ever make the payments on that formed the basis for the "bag-of-shit" investments no one understood.

Look, if I lend a thousand dollars to a homeless guy on the street corner, and he never pays me back, whose fault is it really? I mean, I can start jumping up and down and getting mad about it, but when it comes down to it it's the lender's responsibility to evaluate the debtor's ability to repay.

Or, I guess, you could lend money to people who you know full well can never repay it, and then sell off the debt to somebody else after obfuscating it as "AAA-rated investment grade CDO tranches"; that sounds really sustainable, too.

Get a rope! (5, Insightful)

hessian (467078) | about a year ago | (#42831133)

Corruption is corruption.

Hang them from the trees on Wall Street as a warning to others.

And stop creating government regulations that give them lots of loopholes to exploit.

They're your ruling class (1, Insightful)

rsilvergun (571051) | about a year ago | (#42831189)

good luck with that. Maybe if they didn't have all those armies of well trained soldiers with machine guns...

Re:They're your ruling class (4, Insightful)

L4t3r4lu5 (1216702) | about a year ago | (#42831531)

I don't think I've seen anybody who isn't a head of state moving around in public with an armed guard, much less an actual army. They hire ex police to patrol their private driveway, and maybe the chauffeur carries a pistol. There is next to nothing to stop some crazed nutbag, or a concerted group, from offing one of them in broad daylight except the rule of law.

FWIW, I think that would be a tragedy. They should be tried in court for felony larceny, stripped of their assets and holdings, and imprisoned. I would be happy if this was tried in the ICC at The Hague, as what they did was an international crime.

Re:They're your ruling class (0)

Anonymous Coward | about a year ago | (#42832191)

I believe he was suggesting that the bankers have the US government, and by extension the armed forces, in their pockets.

Re:Get a rope! (0)

Epeeist (2682) | about a year ago | (#42831325)

And stop creating government regulations that give them lots of loopholes to exploit.

You would prefer there was no regulation at all?

You think the deregulation that took place under both Bush administrations was a good thing?

Re:Get a rope! (0)

Anonymous Coward | about a year ago | (#42831517)

no. but apparently you think deregulation under the Clinton administration was a good thing. that was rhe dot com boom, remember? stop pointing to particular parties. they are all equally corrupt.

Re:Get a rope! (0)

Anonymous Coward | about a year ago | (#42831535)

Are you forgetting that Glass-Steagal was repealed (for want of a better word) during the Clinton administration?

Re:Get a rope! (4, Informative)

zebslash (1107957) | about a year ago | (#42831555)

To be frank, deregulation has started in the 80s, with Reagan, Thatcher in the UK, and then continued with Bush senior and Clinton. A key event being the abrogation of the Glass Stingall Act, which separated retail and investment banking. This Act had been put in place after the crisis of 1929, to... avoid a new crisis. Obviously lessons are quickly forgotten when a lot of money are involved. Watch the documentary "Inside Job" for more about this.

Re:Get a rope! (1)

Vaphell (1489021) | about a year ago | (#42832185)

Glass Stegall Act doesn't matter. The rest of the world doesn't have it and it's the investment banks that went down, not mixed businesses. One could argue that diversification helped them avoid trouble.

Re:Get a rope! (0)

Anonymous Coward | about a year ago | (#42831565)

Maybe he meant create the regulation, leave out the damned loopholes?

Re:Get a rope! (2)

c0lo (1497653) | about a year ago | (#42831329)

And stop creating government regulations that give them lots of loopholes to exploit.

Yeap. Better totally deregulate the industry... you see?... no loopholes to exploit

(ducks)

Re:Get a rope! (1)

Seumas (6865) | about a year ago | (#42831407)

How about all the people that were involved in these financial manipulations and catastrophes and have been given (some after the matter) vital government positions?

Re:Get a rope! (1)

conspirator57 (1123519) | about a year ago | (#42831441)

Wake me up when there's a successful criminal prosecution. Bernie Madoff doesn't count: he targeted the wealthy.

Re:Get a rope! (1)

kilfarsnar (561956) | about a year ago | (#42832225)

Wake me up when there's a successful criminal prosecution. Bernie Madoff doesn't count: he targeted the wealthy.

He also doesn't count because he confessed. It's not like they actually caught him. In fact the SEC actively avoided catching him until he showed up and said yeah, it's a Ponzi scheme.

Re:Get a rope! (0)

Anonymous Coward | about a year ago | (#42831475)

absolutely agree, It seems we couldn't do sth to avoid this

Re:Get a rope! (1)

SternisheFan (2529412) | about a year ago | (#42831637)

Corruption is corruption.

Hang them from the trees on Wall Street as a warning to others.

And stop creating government regulations that give them lots of loopholes to exploit.

You beat me to it. Hang 'em. Hang them high.

Re:Get a rope! POLITICIANS First! (0)

BoRegardless (721219) | about a year ago | (#42831723)

CRA was first. The wonderful Carter presidency put upon the country the Community Reinvestment Act in order to give people mortgages who didn't have the incomes and assets to justify giving them a loan. Private businesses are very well able to judge who can pay them back their money they loan and have been making those decisions since our country was founded.

But the CRA caused banks to say "We will lose money doing this." Hence, all of the powers inside the WDC beltway said, "We will let Freddie & Fanny buy your banks loans." At that point the risk had been transferred to those quasi public groups. But then F& F said "We can't hold onto all of this risky paper." Only then did the powers that be, inside the WDC beltway, allow the creation of these mortgage pools.

The powers that be included the SEC, Treasury Dept., GAO, FAB, etc. This was a train running downhill out of control since day one. Every person who tried to stop it was shoved off the train.

One political party that wanted to curry the vote from the population least able to afford a loan was behind this and stopped all efforts to cut the program (& Barney Frank knows this is true as he stopped many efforts).

Re:Get a rope! POLITICIANS First! (2)

dcherryholmes (1322535) | about a year ago | (#42831861)

I'm not sure if you're mentally deficient, or just evil. But the world is now stupider for having your words in it. Bravo, Orc... bravo.

Re:Get a rope! POLITICIANS First! (0)

Anonymous Coward | about a year ago | (#42832143)

So, when the usual "blame the last Democrat in office for the Republican party's problems" didn't stick to Bill Clinton, you decided to go back to Jimmy Carter? Seriously? You're saying that the 2008 financial crisis all comes down to a piece of Carter-era legislation?

What a surprise! (5, Insightful)

furbyhater (969847) | about a year ago | (#42831147)

Now we can see who sits in the cockpit of the "invisible hand". When the people at the top of our complex financial system, with the trust and responsibility placed on them to safeguard the well-being of the whole community, behave in such an anti-social manner they belong behind bars. Overt anti-social behaviour is to be punished, that's the whole point of laws. That these people will get of scot-free or with only small (for them) fines is fresh evidence that the structure of our society needs mending. News at 11'!

Re:What a surprise! (1, Troll)

crazyjj (2598719) | about a year ago | (#42831265)

Obviously, you haven't been watching Fox News. They have assured me that it was the evil government, and not base greed and the free market, that caused the crash.

Re:What a surprise! (3, Interesting)

fuzzyfuzzyfungus (1223518) | about a year ago | (#42831339)

Obviously, you haven't been watching Fox News. They have assured me that it was the evil government, and not base greed and the free market, that caused the crash.

Didn't you hear? It was Bill Clinton's army of crafty welfare negroes who somehow managed to sucker the brightest lights on Wall Street, despite having minimal prior experience with anything other than check-cashing joins and sleazy rent-to-own financing schemes... Makes perfect sense!

Re: What a surprise! (0)

gsgriffin (1195771) | about a year ago | (#42831419)

You obviously don't watch Fox News and are set to MSNBC. No need for political propaganda here, Mr. Troll. Everyone knows the roots and the causes. Each political party needs to own up to their part. Whatch the real videos of senior Democrats in House and Senate prior to the crash that were stating we needed to make more housing affordable for more people that can't afford houses. Tie that together with Republicans that were hoping these problem would self-regulate as banks didn't want to feel the effects of bad actions. The whole government team is to blame, each for their part in making this a reality.

Re: What a surprise! (1)

h4rr4r (612664) | about a year ago | (#42831519)

So instead you parrot propaganda from Fox News?

Really useful. Go look at some charts and figures, Fannie and Freddie did not bring this about, most of these loans were too big.

Re: What a surprise! (4, Informative)

Qzukk (229616) | about a year ago | (#42831619)

Hell, the definition of "sub-prime" is "Freddie and Fannie won't touch this".

Freddie and Fannie didn't insure a single one of these mortgages. Their problem is that they got suckered into backing their prime mortgage insurance business with investments that had been rated AAA by S&P.

Re:What a surprise! (0)

Anonymous Coward | about a year ago | (#42831425)

And that invisible hand seems to wear a yarmulke.

Re:What a surprise! (5, Insightful)

sesshomaru (173381) | about a year ago | (#42831583)

"When the people at the top of our complex financial system, with the trust and responsibility placed on them to safeguard the well-being of the whole community, behave in such an anti-social manner they belong behind bars."

Hey now, it's not like they were downloading a bunch of academic journals or something!

We need some perspective here.

Re:What a surprise! (1)

furbyhater (969847) | about a year ago | (#42831689)

Great comparison! It's difficult to stay sane in such an environment... and reading slashdot regurarly validates this assumption ;-)

Dealing with sociopaths: (0)

Anonymous Coward | about a year ago | (#42831739)

http://careereq.com/articles/emotional-intelligence/workplace-psychopaths-how-to-deal-with-them/

http://www.youmeworks.com/sociopaths.html

http://www.uncommon-knowledge.co.uk/articles/strings-psychopathy.html

http://www.lovefraud.com/blog/2012/02/10/the-gray-rock-method-of-dealing-with-psychopaths/

http://www.lovefraud.com/blog/2008/01/11/ask-dr-leedom-are-there-psychological-tactics-for-dealing-with-a-psychopath/

http://mytherapy.com/discussion/default.asp?group=14

http://psychopathtracker.com/WhatYouCanDo.cfm

Deja vu (2)

NoNonAlphaCharsHere (2201864) | about a year ago | (#42831151)

This reminds me of the "Barry Bonds took steroids, reports everyone who ever watched baseball" story from The Onion. I'm shocked, simply shocked at how unsuprised I am.

The Jack Handey Corollary (2)

rmdingler (1955220) | about a year ago | (#42831331)

I'm with you here, but the lack of shock, surprise, and outrage is a terrible indication that we've become so comfortable with the misdeeds of our political and financial leaders that we expect no better from them. They egregiously abuse their positions for monetary gain, quite often with consequences no more severe than the obligatory 50 lashes with a wet noodle, when a federal sentence with a side of prison rape seem much more appropriate.

Not exactly news (5, Interesting)

michelcolman (1208008) | about a year ago | (#42831153)

And I wouldn't blame a few individual bankers, I think this was coordinated a bit higher up. American banks had been selling way too many loans, and when they saw this was becoming a huge problem that might bring down the entire American economy, they made the brilliant move of packaging these loans in nice AAA investment vehicles and selling them to the rest of the world. Now it became a global crisis instead of an American one.

Not a very moral or honest thing to do, but it sure was ingenious.

Re:Not exactly news (1, Insightful)

crazyjj (2598719) | about a year ago | (#42831285)

It was the biggest Ponzi scheme in history--all done with the blessing of the biggest banks in the world, cheering politicians, and a gullible public that bought into the idea that less regulation and oversight would somehow not incentivize corruption and fraud.

Re:Not exactly news (0)

Anonymous Coward | about a year ago | (#42831359)

Not quite. When congress mandated that government retirement fund only buy AAA bonds, the only plausible market move was to make enough AAA bonds for that huge market. You can't magically legislate risk away. Why S&P? Revenge for downgrading the US debt during the election runup. I'll eat crow if they prosecute any of the other rating agencies. Sorry to bust your bubble.

Re:Not exactly news (1)

furbyhater (969847) | about a year ago | (#42831371)

Of course I blame the individual bankers who made the decisions that led up to this, who else is there to blame?!
I dont' think that anything was coordianted "higher up" than those finiancial institutions who made profit from the whole fiasco.

Re:Not exactly news (1)

udachny (2454394) | about a year ago | (#42831543)

The banks and bankers are only a symptom of the actual problem, which is lack of real economic activity, fake money, money printed by the Fed, all the regulations that create all the moral hazards, from FDIC to FHA, Freddie and Fannie, HUD, etc.

The bankers are just people who are given free money and incentives to give out loans with free 'insurance' (gov't doesn't provide insurance, it has no assets for that, no investment, it's all based either on future taxation, more borrowing or printing - inflation).

Bankers cannot do what they did if the gov't doesn't create the entire environment where it is profitable to do it because the actual risk is no longer with the bankers. Actually banks used to be private partnerships until the end of seventies, you won't find banks like that anywhere anymore, it's all large corporations that are all tied to government, all getting their bail out money, discount window is opened for them, they are protected top to bottom and the laws are set to ensure that they are part of the wealth transfer.

The wealth that is being transferred from the real savers and real investors to the consumers (whoever the gov't makes into consumers, this means the banks themselves, military industrial complex, all the connected corporations and of-course the mob - the promise of socialism, stealing from the productive and subsidising the unproductive is what gives the politicians the green light to be able to continue this theft).

Banks are not only too big to fail now, banks are now too big to investigate, to big to charge with crimes. That's because banks are now the government, there is really no difference.

JPMorgan is now the 'Tresury' (there is no treasure, there is only debt, it should be know as the dep't of debt).

Everything that gov't does creates incentives to destroy the real competitive free market capitalism. The savers and investors are punished with inflation, taxes, regulations. The politicians and top connected corporate drones are protected from any investigation and actually from failure.

This is an atrocity. The fact that many bankers understood this and still acted upon it is just the proof positive that this SYSTEM is rotten, the system shouldn't be set up to allow this. But the system is what it is because the MOB, the democratic mobocracy votes for politicians who promise and deliver destruction of the law, destruction of the Constitution.

Democracy destroys good self-governance, it destroys the Republic, which builds the wealth and thus it destroys the wealth and creates poverty and misery. Democracy is the root cause of the problem, people who vote for the politicians that promise free shit to be stolen from a minority and given to the majority, that's the problem.

The problem is the complete abolition of the law, of the Constitution, of the principles that were set when the Constitution was created. It's not a nation of laws, it's the nation of men.

Socialism is promised and somewhat delivered, but the implementation is much more fascist (and no, those two are not polar opposites, they are both collectivist, central planning, anti-capitalist, so anti-private property, anti-human, anti-free market, oppressive, tyrannical systems).

That's the root cause. Bankers understanding that they are using the incentives that the system provides them with to make easy money from suckers who really should have known better? That's the symptom.

USA is bankrupt, by the time the majority of people understands and sees it will be disastrously late, just like it was late for the people who didn't see the housing and the stock market bubbles. [slashdot.org]

Re:Not exactly news (0)

Anonymous Coward | about a year ago | (#42831655)

"Ingenious"...You keep saying that. I think that word does not mean what you think it means.

Seriously, if anything that our banker overloards do is ever ingenious, the results will prove it, and the world will probably be a better place. However, sometimes my idea of genius is set to a longer time-line than what others would care to explore.

Any selfish act, no matter how well planned, cannot be called ingenious. Any act that promotes health throughout the world, no matter how simple, is always ingenious.

just my .02

Re:Not exactly news (3, Insightful)

dkleinsc (563838) | about a year ago | (#42831967)

And I wouldn't blame a few individual bankers, I think this was coordinated a bit higher up.

Who or what was coordinating it? The Bavarian Illuminati? An invisible man living in the sky? His Noodlyness? Inquiring minds want to know.

My impression of the whole mess:
1. It was fraud on a massive scale.
2. It was very very profitable to engage in. Anyone at a major bank who had even remotely suggested that this was a bad idea tended to be first laughed out of the room and then fired shortly thereafter.
3. For the last 15-20 years at least, the SEC and the Feds basically made the decision to look the other way with regards to Wall St crimes. The Bush administration in particular was notoriously lax, but Obama has done nothing to put a stop to it.
4. When it hit the fan, all the people involved got bailed out because the US Treasury Department was either (a) in on it, or (b) was scared of what would happen to the economy if that didn't happen.

None of this required any kind of coordination, all it took was somebody committing this kind of fraud and getting away with it. As a rule, if left unchecked crooked business drives out honest business because the crooks have higher profit margins.

Banks paved the way for world economy collapse (0)

Anonymous Coward | about a year ago | (#42831183)

in order to increase their profits.

More news at 11

ROMAN JUSTICE for financial pimps (1)

noshellswill (598066) | about a year ago | (#42831195)

1) strip them bare of all monies and properties
2) flog 'em round-the-streets
3) decimate the survivors
4) sell wives and daughters to Saudi hoe-houses

EOF.

Re:ROMAN JUSTICE for financial pimps (2)

sjwt (161428) | about a year ago | (#42831255)

Why only decimate them? [wikipedia.org]
Are you sure you want to kill only 1 in 10?

Re:ROMAN JUSTICE for financial pimps (1)

nedlohs (1335013) | about a year ago | (#42831443)

Decimate is an English word, not a Latin word. It means "to reduce drastically especially in number", that it was derived from a Roman practice and a Latin word doesn't change the commonly used definition that is hundreds of years old.

Do you also think that a symposium can only mean a drinking party?

Re:ROMAN JUSTICE for financial pimps (0)

Anonymous Coward | about a year ago | (#42831887)

...and decimate in english slang also beams "to completley destroy"..
Why do douche bag proof readers / failed english teachers always end up on here?

Re:ROMAN JUSTICE for financial pimps (1)

Culture20 (968837) | about a year ago | (#42832121)

You only decimate because then the 9/10 left can still do work. Presumably better work.

(plus one InformatIve) (-1)

Anonymous Coward | about a year ago | (#42831213)

every day...Like 3orthwhile. so I All major marketing

Arrest (0)

Anonymous Coward | about a year ago | (#42831223)

Any executive that was involved. Jail them, raid their homes, freeze their assets. Don't tell me you need a warrant.
Then shove a plea bargain up some asses so we can see a crybaby banker kill himself.

Reform (3, Insightful)

smitty_one_each (243267) | about a year ago | (#42831235)

Look, anybody who wants to see anything different has got to tell me how we de-centralize.
I'd be for creating banks in the other 49 states (beside North Dakota), and returning all of the 10th Amendment violations like Sallie May, Freddie Mac, and the education loans to the states where the people/places in question reside.
The federal government could then assume a more legitimate oversight role.
Are you going to alter the net corruption of the overall system? Unlikely. Can you ACTUALLY DO SOMETHING OTHER THAN THROW WORDS AT 'TOO BIG TO FAIL'? I daresay you can.
But your Ruling Class Overlords will not be separated from power by less than a crowbar, and maybe a little heavy PETN.

Re:Reform (1)

Dasuraga (1147871) | about a year ago | (#42831327)

anti-trust rules to break up the banks, and then making sure the FTC doesn't allow the conglomeration to happen again. We've nationalised every bank over this crisis, we could've taken that opportunity to seperate things out a bit

Re:Reform (4, Interesting)

moeinvt (851793) | about a year ago | (#42831415)

"...anybody who wants to see anything different has got to tell me how we de-centralize."

It's starting, and slowly gaining momentum. Support any efforts in your state or local government to re-assert sovereignty. CO and WA are actively defying federal drug laws. Twenty six states sued to block Obamacare and many governors are actively resisting its implementation. Several states have passed resolutions asserting that the NDAA won't be enforced in their states. With all of the anti-gun hysteria, we're seeing states and even county LEOs claiming that they will stop any new gun control laws being forced on their citizens. Something really interesting is that several county LEOs are claiming that they will actively thwart federal LEOs from enforcing the laws in their jurisdictions.
Maybe if we could elect some courageous state AGs, they could prosecute these banking slime on charges of fraud, forgery, perjury, etc.
I like the idea of state banks. Until fractional reserve banking is banned, I think that's the best way to restore the money power to the people.
F*** the federal government's "oversight" role. They have the FDIC, OTS, OCC, SEC, FBI, CFTC, etc. etc. and they not only failed to stop the Wall St. fraud factory and thwarted any investigation and prosecution, they actively conspired to facilitate and cover up the frauds. There is little hope of positive change at the federal level.

Re:Reform (0)

mvdwege (243851) | about a year ago | (#42831541)

Look, I know you neo-Confederates aren't too smart, but this news item was about private sector banking, not the Federal Reserve.

Please be so kind as to wait for a suitable news item to ride your hobby-horse.

Mart

Re:Reform (0)

Anonymous Coward | about a year ago | (#42831731)

Everyday for a week, go out and buy yourself a nice delicious, healthy lunch, but don't eat it. Instead, take it to a random homeless person. Sit with them while they eat it and ask them about their favorite time in their life. Just 5 days in a row, do this.

If we are going to change the world, we'll have to actually start doing different things. If we want the world to not only change, but change for the better, then those different things will have to be humane things.

just my .02

Re:Reform (1)

dkleinsc (563838) | about a year ago | (#42832071)

Look, anybody who wants to see anything different has got to tell me how we de-centralize.

Something the Occupy Wall St folks did was organize a "Move your Money Day", which was a mass effort to have people close out their accounts at the big banks and put the money into local banks and credit unions. They claim to have pulled $50 million out of the big banks and put it into small banks. These were the same people talking about "Too Big to Fail" - they were actually trying to decentralize, exactly as you suggested.

Until scores of these douchbags go to prison (1, Insightful)

fredrated (639554) | about a year ago | (#42831267)

and do hard time, nothing will change.
Unfortunately, Obama has proved a friend to the wealthy and powerful, so don't hold your breath.

Re:Until scores of these douchbags go to prison (0)

Anonymous Coward | about a year ago | (#42831463)

and do hard time, nothing will change.
Unfortunately, Obama has proved a friend to the wealthy and powerful, so don't hold your breath.

This isn't even a story until someone actually goes to jail. It's merely another chapter in the book titled "US Policy".

The only question left to answer is do they want it to change, or is the eventual collapse by design anyway.

Standard & Poors should downgrade the dollar (2)

Anonymous Coward | about a year ago | (#42831295)

Standard and Poor may not have acted quickly on downgrading these bad loans (they ALL were reluctant to downgrade them, S&P were losing business because they weren't keen to give them good ratings!). The reason S & P are currently under attack is simple:

They downgraded the dollar because Congress wouldn't tackle the government debt. As soon as they did that, the Fed started threatening them with prosecution over bad ratings.

The current deal with the Republicans in Congress includes a raising of the debt ceiling, and is really a half deal. S&P might have downgraded the dollar again over this botch half deal. That's a problem, it would drive down the dollar and force more money printing.

So suddenly all the talk is about prosecuting S&P and ONLY Standard and Poor, not the other ratings agencies. It's a shot across their bows, a warning to them to let this debt ceiling slide.

But S&P need to *recover* their rating confidence, and that means making some tough ratings that are extremely unpopular. The deficit hasn't been tackled, the debt ceiling raised yet again, they have to lower the rating on the dollar and to hell with the Fed and it's threats.

Re:Standard & Poors should downgrade the dolla (1)

furbyhater (969847) | about a year ago | (#42831409)

Interesting comment, I'm no expert but it does sound realistic ;-)

Some background to this game (0)

Anonymous Coward | about a year ago | (#42831653)

S&P downgrades the dollar Aug 5th 2011, the only ones to do so, the other ratings agencies didn't:
http://www.reuters.com/article/2011/08/06/us-usa-debt-downgrade-view-idUSTRE77504J20110806

S&P to be sued over mortgage securities ratings:
http://www.cnbc.com/id/100432491/US_to_File_Civil_Charges_Against_SampP_Over_Ratings

I'm not the only person to notice that S&P is being singled out:
http://seekingalpha.com/article/1155991-why-is-government-suing-s-p-the-only-ratings-agency-to-downgrade-u-s-debt?source=google_news

Jason Hamlin points something out that is crystal clear:

"Standard & Poor's was the only major ratings agency to downgrade U.S. debt. On August 6th, 2011, S&P deprived the U.S. for the first time of the triple-A rating it had held for over 70 years. Their justification was that the budget deal brokered in Washington didn't do enough to bring American's fiscal house in order. And they were right!"

AND THEY WERE RIGHT, this is the key point S&P downgraded the US dollar and they've been proved right, as they headed to the next fiscal cliff, and should downgrade it again.

"You see, if the rest of the world stop buying into the U.S. government/Federal Reserve Ponzi scheme of a monetary system, the party too must stop. The Fed is already thought to be purchasing up to 70% of U.S. bonds at auction, "monetizing" the soon-to-be worthless paper for which Asian nations have lost an appetite."

When the Fed buys bonds, it's actually printing money, and using that new money to swap for government debt. It creates an inflation that can appear to a casual observer to be similar to the inflation caused by growth. Just as long as nobody makes too much noise.

"How DARE you do that S&P?!?"

"So now, after a joke of a resolution to the fiscal cliff, promising to cut $1 trillion over 10 years, when we need to cut $1 trillion this year, and using the political process to allow Congress to increase the limit on its already maxed out credit card, agencies are once again threatening to downgrade U.S. debt."

"Of course S&P should be downgrading U.S. debt! Has anyone looked at the books lately? Any individual or business that spends this much more than they take it would have been bankrupt and on the street years ago. Yet, when Moody's threatened to join S&P in downgrading U.S. credit last year, they were immediately attacked..."

Moody's chickened out and let them keep the AAA rating BTW.

So now we have a lot of sabre rattling, just after the fiscal cliff botch, all directed at S&P, because the other rating agencies are too scared to downgrade. Yet S&P were proved right the last time, and this deal fixes nothing, so they'll be proved right again.

What about Caveat Emptor? (4, Insightful)

140Mandak262Jamuna (970587) | about a year ago | (#42831349)

I am no fan of S&P rating agency and what they did was horrendous. There was clear conflict of interest in rating a bond/secutiry/instrument and getting paid by the sellers of the very same instruments. But on the other hand the people who were "duped" by the practice are not tiny small investors, without the means to do independent verification or the means to do due diligence on the rating agencies. Heck, the very same big banks that claim to be "duped" by the inflated ratings given by S&P actively participated in the very same rating rigging scheme. They know very well every body is doing it. These banks that bought the bonds were also repacking the very same bonds and putting them back on the market, and they paid the very same rating agency the very same "commissions" to get them inflated too.

Look, at the height of madness, these derivatives which no one could possibly understand, derivatives so complex even God Almighty could not understand were given the same rating as US Treasury bonds or just a microscopically lower ratings. If these banks really believed the ratings by S&P they would have bought them at the same yields as US Treasury bonds, (or microscopically higher yeilds). But these derivatives were yielding a full percent, and then they were shooting up.

Why? These bastards knew, no matter, what lipstick S&P and Moody's slap on these beasts they are pigs. If small investors were taken in, that lone retiree conserving his/her nest egg, despairing at the ridiculously low interest rates they were getting, buying one lone bond for 12000$ and losing it all, they have my full sympathies, and wish they would be able to take on these bastards and send them to jai.

But, the buyers were the big guys. Why are they buying bonds, whose rating was paid for by the sellers?. Why can't they come up with a plan to pay for the ratings themselves? The bankers could have decided the buyers of bonds would chip in a few dollars and create an agency that will never be paid by the sellers of bonds and would be totally funded y the buyers of the bonds. They still have not done it.

What is playing out in the courts is something like a lovers spat or falling out between the thieves.

Re:What about Caveat Emptor? (1)

furbyhater (969847) | about a year ago | (#42831491)

Great comment :-) Especially the last phrase made me chuckle.
The car's engine is breaking down and needs a change...

Re:What about Caveat Emptor? (2)

trepanne (2648397) | about a year ago | (#42832023)

I am no fan of S&P rating agency and what they did was horrendous. There was clear conflict of interest in rating a bond/secutiry/instrument and getting paid by the sellers of the very same instruments. But on the other hand the people who were "duped" by the practice are not tiny small investors, without the means to do independent verification or the means to do due diligence on the rating agencies. Heck, the very same big banks that claim to be "duped" by the inflated ratings given by S&P actively participated in the very same rating rigging scheme. They know very well every body is doing it. These banks that bought the bonds were also repacking the very same bonds and putting them back on the market, and they paid the very same rating agency the very same "commissions" to get them inflated too.

All quite true. It's important to understand the the most important modality of Wall Street greed is *individual* greed. Generally speaking, each employee has massive incentive to game the system in order to get a huge bonus at the end of the year. If his gaming of the system subsequently blows up his employer, or the US financial system, the worst that happens is that he gets fired - but he gets to keep bonuses reaped to date. This asymmetry explains much Wall Street behavior... make hay while the sun shines, burn the house down, move on to the next casino. If the people responsible for reigning in this behavior allow them, there will be truly shocking amounts of systemic cheating in order to maximize current (not long-term) profits. That's exactly what happened with S the users of their ratings, if they had half a brain, knew there was something wrong here... they just didn't care.

But, the buyers were the big guys. Why are they buying bonds, whose rating was paid for by the sellers?. Why can't they come up with a plan to pay for the ratings themselves? The bankers could have decided the buyers of bonds would chip in a few dollars and create an agency that will never be paid by the sellers of bonds and would be totally funded y the buyers of the bonds. They still have not done it.

In fact, you are describing the business model of Egan Jones [wikipedia.org]. Never heard of them, have you? See, the problem with that business model is that there's no incentive to widely disseminate the ratings; those who pay for the ratings have an incentive to hoard them for themselves in order to get some advantage over other buyers.

Reboot (0)

water-vole (1183257) | about a year ago | (#42831357)

I think you Americans need a full reboot of your system over there. You have a federal government that is unable to get bills or budgets passed, a federal administration that is unable to oversee banks and business sufficiently and thousands of companies exploiting every loophole that your broken government leaves. Add a judicial system extremely susceptible to frivolous litigation to that. You may blame a few bankers or a few companies, but the problem is deeper than that and possibly has to do with your constitution.

Re:Reboot (0)

Anonymous Coward | about a year ago | (#42831473)

No, the constitution is perfect, the Holy Scripture of Americanianity.

Mind you like most holy scriptures no-one reads the thing, but it's still perfect.

Another central tenet of Americanianity is American Exceptionalism. So no-one else is allowed to say "you're doing it wrong", because by definition if the USA is doing something in a particular way it's the perfect way to do it.

Madness (0)

Anonymous Coward | about a year ago | (#42831413)

I worked in the research department of a major brokerage firm during this time, and the firm paid truckloads of money to research firms and information providers in the quest for detailed, in depth, up-to-date, and most importantly unbiased information. The consequences of encouraging the same providers to sour the milk should have been obvious.

Why are investment banks allowed to rate product? (4, Insightful)

h4rr4r (612664) | about a year ago | (#42831427)

Someone who sells ratings should not also be buying and selling these products. Of course there is a huge perverse incentive here.

Re:Why are investment banks allowed to rate produc (1)

trepanne (2648397) | about a year ago | (#42831917)

Someone who sells ratings should not also be buying and selling these products. Of course there is a huge perverse incentive here.

Here [sec.gov] is a list of all the ratings agencies. You'll notice that no investment banks are on the list.

Senator Renault says: (0)

Anonymous Coward | about a year ago | (#42831553)

"I'm shocked, shocked to find that gambling is going on in here!"

Charging the least guilty party (0)

Anonymous Coward | about a year ago | (#42831577)

It seems from what I've read all the rating firms were complicit in this.

It's ironic that the main reason they seem to be charging S&P is that they were the most reluctant to be evil, and the last arrival to being part of the problem.

From what I read, S&P wanted to be tough - wanted to be right. They were honest when Moody's and Fitch were starting to cook the books. They were the good guys (or, at least, the least bad guys) in the whole mess.

Then their clients said "we like favorable ratings more than we like integrity" and voted with their feet. S&P had a a choice - bend our principles because "everyone else is doing it" or stick to their principles and possibly go out of business. They reluctantly chose B.

And while this was a bad choice, it reads like they were the only party to this mess who gave a damn, who wanted to do things right. They were the only ones with a crisis of conscience. But because they had the crisis of conscience, and its recorded, THEY get to be the whipping boy. Not Fitch. not Moody's. Not the ones who never cared, who were corrupt from day one. The leaders are off the hook, and the reluctant follower gets hammered. It's not that they're innocent, but on the scale of guilt, they're lower down than many.

Justice department indeed.

Re:Charging the least guilty party (1)

furbyhater (969847) | about a year ago | (#42831743)

Is this cowboy mentality? Just wondering, when I was a kid I always thought cowboys were cool...

Perspective (4, Interesting)

kenh (9056) | about a year ago | (#42831607)

Let's remember, these "smoking gun" emails are the result of exhaustive, comprehensive searches of EVERY ingoing and outgoing email from the respective organizations. In a large enough company I can guarantee you I can find emails that "prove" almost anything relating to thier business, their customers, etc.

That some employees expressed doubts or questioned the value of the products or services their company offers means very little if they are not the decision-makers.

Anyone surprised that a salesman at an investment house might be selling something they either don't understand or personally see the value in shouldn't be investing in the stock market. Would you be surprised to find out the guy selling you a Chevy Volt doesn't believe it is the best car in the world? What a salesman says to a customer is not neccessarily what he believes in his heart or in his mind.

Re:Perspective (1)

furbyhater (969847) | about a year ago | (#42831835)

I would prefer to make my living as a traditional prostitute than to work at one of the companies you describe, prostituting my mind and "soul".

Sorry to be so pessimistic... (1)

Pollux (102520) | about a year ago | (#42831667)

But we get the [rollingstone.com] point [pbs.org].

It's very well established that banks committed fraud. It's very well established that the US Government protected these very institutions when they were knowledgeable of the fraud being committed.

It's also very well established that no one's going to criminal court. Wall Street and Washington D.C. have been coupled together in such an orgy of conspiracy that neither will willingly do anything to jeopardize their sybiotic relationship.

No Invisible Hand Here (2)

DaKong (150846) | about a year ago | (#42831817)

The thing is, if we allowed the free market to work, then AIG, JP Morgan, Morgan Stanley, and all the big banks who participated in this would have evaporated overnight and regional banks who acted responsibly would have stepped in to fill the void. But the free market was not allowed to do its thing and we have a doubling down on crony capitalism that will fail again, bigger.

A lot of people like to pretend there's an all-powerful government out there that can suppress any dissent, but we've all seen the last 5 years just how little the people need to do for that illusion to vanish. Just look at how incompetent the government was at handling Hurricane Katrina, which was predicted well in advance and which they knew about for days before. Imagine if something unforeseen were to occur.

And at this point that's what's required to correct this situation.

Email? (0)

Anonymous Coward | about a year ago | (#42831825)

Ok, sorry for trolling here. But our economy is fuct. There can be no other people to blame, except those that are in charge of running the system.

This is no different than that old man that shot the bus driver in Alabama recently, took a boy to the underground bunker and held him for days. We all know it was that guy that did it. They talked to him while he was in the bunker. They talked to him about everything they could. Eventually they got the boy and the man is dead. Now what if years later, we hear a report that they found emails that he sent to friends that can be used as evidence in court for a conviction. Who the fuck cares, we all know he did it.

Same thing here. This is silly.

just my .02

Time for revolution? (1)

furbyhater (969847) | about a year ago | (#42831863)

The US still hasn't had it's revolution (since it's establishment after the seccesion from the British), I guess it's really about time!

People are People (3, Insightful)

Nyder (754090) | about a year ago | (#42832103)

The sad truth is people are corrupt. We all are. It's a part of human nature. What we need to start doing is accepting that people in power are going to abuse it, and put in blocks, checks to keep that from happening. The truth is, people need to be regulated. They need to be checked that they are doing what they are supposed to.

Too big to fail? Not to big to jail.

This also shows what the government thinks of everyone but the rich and corporations. They will bend over backwards to bail out the rich and the corporations while fucking the rest of us in the ass. The economy has been in the shitter but the people the caused it live like kings.

Wish some good would come of this, but our government won't do anything about it.

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