|
Finally! A bright spot in an otherwise gloomy day.
10-06-2008, 03:58 PM
|
#1
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2007
Posts: 5,072
|
Finally! A bright spot in an otherwise gloomy day.
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
10-06-2008, 04:04 PM
|
#2
|
Thinks s/he gets paid by the post
Join Date: Apr 2007
Posts: 2,360
|
Personally, I hope they focus all their energies on getting the economy back on track.
This desire for vengance and punishment is simply an unhelpful distraction that will benefit no one (except a few politicians and future politicians glory-seeking prosecutors: "Look, we fixed the problem!").
The government should be looking forward, not backward, and making systemic changes (e.g. eliminating mortgage deductability) rather than symbolic gestures.
__________________
"To know what you prefer, instead of humbly saying Amen to what the world tells you you ought to prefer, is to have kept your soul alive". Robert Louis Stevenson, An Inland Voyage (1878)
|
|
|
10-06-2008, 04:35 PM
|
#3
|
Recycles dryer sheets
Join Date: May 2006
Posts: 465
|
I didn't see any mention of going after the rating agencies (Moody's, Standard and Poor's, etc.). Why are these guys gettting a pass when they are the ones that gave AAA ratings to risky mortgage related securities? How does the market ever regain confidence in their ratings?
|
|
|
10-06-2008, 04:48 PM
|
#4
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
|
Quote:
Originally Posted by IBWino
I didn't see any mention of going after the rating agencies (Moody's, Standard and Poor's, etc.). Why are these guys gettting a pass when they are the ones that gave AAA ratings to risky mortgage related securities? How does the market ever regain confidence in their ratings?
|
Here's the thing. The bond rating agencies are mostly looking at whether a borrower can pay the money back. The thing is, with the change to mark-to-market accounting rules, even a lot of performing debt lost 10%, 20% or more of its value from par because of illiquidity and a frozen, panicked market.
Most of these MBS that were AAA rated did perform -- but the market taking their value down 25% is a different story.
A buyer of a bond just *assumes* more price stability and less economic sensitivity in a AAA-rated bond. When the market gets dysfunctional and constipated enough, even "safe" and performing assets get marked to market way below par. I'm not sure how the ratings agencies can -- or should -- consider mark-to-market concerns in rating a bond.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
|
|
|
10-06-2008, 04:59 PM
|
#5
|
Thinks s/he gets paid by the post
Join Date: Nov 2007
Posts: 1,052
|
I agree that the ratings agencies should be investigated. I believe AIG is still rated A or A-. What the heck?
|
|
|
10-06-2008, 05:06 PM
|
#6
|
Thinks s/he gets paid by the post
Join Date: Dec 2005
Posts: 1,228
|
Ziggy, my understanding is that it's the homeowners that own the mortgages that have to perform, not the corporations that packaged the debt together. True, those corporations succesfully "performed" their job of packaging up a lot of stinky mortgages into a nice opaque wrapper. But surely the MBS ratings must be intended to guide expectations on something other than the packaging, right?
|
|
|
10-06-2008, 05:08 PM
|
#7
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2008
Location: East Nowhere, 43N Latitude, NY
Posts: 9,037
|
Quote:
Originally Posted by chinaco
|
go get 'em, guys and gals.
RICO is a tough law to beat in court. woohoooo, i love it!
__________________
"All our dreams can come true, if we have the courage to pursue them." - Walt Disney
|
|
|
10-06-2008, 05:13 PM
|
#8
|
Recycles dryer sheets
Join Date: May 2006
Posts: 465
|
Quote:
Originally Posted by ziggy29
A buyer of a bond just *assumes* more price stability and less economic sensitivity in a AAA-rated bond. When the market gets dysfunctional and constipated enough, even "safe" and performing assets get marked to market way below par. I'm not sure how the ratings agencies can -- or should -- consider mark-to-market concerns in rating a bond.
|
Ziggy,
Thanks. I guess it's a case of buyer beware, but it still seems to me that the ratings agencies were complicit in all this.
|
|
|
10-06-2008, 08:33 PM
|
#9
|
Recycles dryer sheets
Join Date: Jul 2008
Location: ENE MO - near STL
Posts: 424
|
Quote:
Originally Posted by Milton
Personally, I hope they focus all their energies on getting the economy back on track.
This desire for vengance and punishment is simply an unhelpful distraction that will benefit no one (except a few politicians and future politicians glory-seeking prosecutors: "Look, we fixed the problem!").
The government should be looking forward, not backward, and making systemic changes (e.g. eliminating mortgage deductability) rather than symbolic gestures.
|
Really? Is that how you feel about catching other criminals? (burglars, rapists, murderers, bank robbers, etc.) Obviously this could be argued 'til the end of time, but most would agree that there is deterrent value in holding people accountable for their crimes; in addition to good old justice.
I think I understand what you're getting at though. That we can't just sit around now pointing fingers and spending all our resources and time on stringing people up for vengeance sake. But we can do both.
|
|
|
10-06-2008, 09:00 PM
|
#10
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
|
I think it'd be nice if the folks who spindled up risky assets and sold them as better than they were got punished to a good degree so that their future selves would consider carefully before trying to make a fast buck.
I see no difference between their actions and simple theft.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
|
|
|
10-06-2008, 09:03 PM
|
#11
|
Moderator Emeritus
Join Date: Feb 2004
Location: minnesota
Posts: 13,228
|
Quote:
Originally Posted by Milton
Personally, I hope they focus all their energies on getting the economy back on track.
This desire for vengance and punishment is simply an unhelpful distraction that will benefit no one (except a few politicians and future politicians glory-seeking prosecutors: "Look, we fixed the problem!").
The government should be looking forward, not backward, and making systemic changes (e.g. eliminating mortgage deductability) rather than symbolic gestures.
|
I understand this point of view if chasing the bad guys was all we did. But different people have different jobs. Let the prosecutors do all the chasing they want. Their job isn't to get the economy on track.
__________________
.
No more lawyer stuff, no more political stuff, so no more CYA
|
|
|
10-06-2008, 09:17 PM
|
#12
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2005
Location: Chicago
Posts: 13,186
|
Quote:
Originally Posted by Martha
I understand this point of view if chasing the bad guys was all we did. But different people have different jobs. Let the prosecutors do all the chasing they want. Their job isn't to get the economy on track.
|
OK for the prosecutors.... But I think I smell congresscritters focusing their attention on this in an obvious attempt to win some voter support before elections. I'd like to think they're primarily concerned about our future and can easily go back and beat up the appropriate culprits when they've determined how to get the train back on the tracks.
It's a matter of prioritization. I don't care if the bad guys have their cell doors clang shut 3 months from now or 6 months from now or 9 months from now as long as we get the economy back on track NOW!
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
|
|
|
10-06-2008, 09:22 PM
|
#13
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
|
I have no doubt that we'll round up a number of the usual suspects for a series of news broadcasted perp walks, just so people will put down the torches and pitchforks.
They'll be guilty of something, but they wont be the guys who really lined their pockets.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
|
|
|
10-06-2008, 09:24 PM
|
#14
|
Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 4,629
|
Quote:
Originally Posted by Martha
I understand this point of view if chasing the bad guys was all we did. But different people have different jobs. Let the prosecutors do all the chasing they want. Their job isn't to get the economy on track.
|
Based on your avatar, are you interested in the job?
|
|
|
10-07-2008, 01:31 AM
|
#15
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2007
Posts: 5,072
|
Quote:
Originally Posted by Milton
Personally, I hope they focus all their energies on getting the economy back on track.
|
I think they are doing what they can within the framework of our government.
Quote:
Originally Posted by Milton
This desire for vengance and punishment is simply an unhelpful distraction that will benefit no one (except a few politicians and future politicians glory-seeking prosecutors: "Look, we fixed the problem!").
|
IMO - They need to be pursued vigorously.
I saw part of Fuld's testimony before congress... he exclaims "no one could foresee what was to unfold..." yada yada yada.
The fact is they packaged trash and knew it. To entice investors to buy it they made it riskless by creating and selling CDS (without proper reserves...). Then (they and the industry) began selling CDS to speculators that did not even hold the MBS (trying to get money for nothing).
The insiders knew exactly what was happening and the potential repercussions to the company. They knew the risk they were taking... they may have not fully understood how it could wreck the world's economic system.... The scheme took on a life of its own. But they are still the culprits and the architects of the disaster. They must pay the price!
Fuld is putting forward the Ken Lay Defense excuse... I didn't know what was happening!
The man ran the company into the ground taking excessive risks and to add insult to injury gorging on obscene compensation. He must pay and the rest like him must pay.
|
|
|
10-07-2008, 01:51 AM
|
#16
|
Thinks s/he gets paid by the post
Join Date: Dec 2005
Posts: 1,228
|
Don't hate the playa, hate the game. The corporate CEO's job is to maximize profits by taking as much as they can get from wider society. Collapse of the world economy is an externalized cost, which does not factor in to corporate decisionmaking (except to the extent that it affects the company's prospects). It's the job of regulators (congress) to put up walls (regulations) around these greedy and psychotic entities we have established called corporations. Starting with requiring complete transparency of solvency for anything we need to depend on like banks and insurance companies.
I've said it before and I'll say it again: watch the movie "The Corporation" to see the bigger picture.
|
|
|
10-07-2008, 03:00 AM
|
#17
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2007
Posts: 5,072
|
Quote:
Originally Posted by free4now
Don't hate the playa, hate the game. The corporate CEO's job is to maximize profits by taking as much as they can get from wider society.
|
Uh-huh... Maximize profits in an ethical way that does not kill the company, ruin investors, ruin business partners and scr3w the company's customers!
The fact that a toxic side effect was to cause systemic economic failure and a freezing of the financial system... shows just how far they went with the scheme.
I think that they knew what was happening but it got so big it got away from them... now they are caught in their scheme and are trying to cover up (play dumb).
|
|
|
10-07-2008, 10:06 AM
|
#18
|
Thinks s/he gets paid by the post
Join Date: Apr 2007
Posts: 2,360
|
Quote:
Originally Posted by chinaco
Uh-huh... Maximize profits in an ethical way that does not kill the company, ruin investors, ruin business partners and scr3w the company's customers!
|
Good ethics are good practice, but not a legal requirement. Proving that specific laws were broken is rather different from showing that executives were negligent, incompetent or greedy: in a non-kangaroo court, anyway (let's hope that a desire to satisfy the bloodlust of an aggrieved proletariat doesn't sacrifice due process).
By definition, scapegoating always distracts attention from root causes.
__________________
"To know what you prefer, instead of humbly saying Amen to what the world tells you you ought to prefer, is to have kept your soul alive". Robert Louis Stevenson, An Inland Voyage (1878)
|
|
|
10-07-2008, 10:10 AM
|
#19
|
Thinks s/he gets paid by the post
Join Date: Jan 2008
Posts: 2,020
|
Quote:
Originally Posted by youbet
OK for the prosecutors.... But I think I smell congresscritters focusing their attention on this in an obvious attempt to win some voter support before elections.
|
Well, if our choice is having them focus on things like this or steroid use in baseball.....
|
|
|
10-08-2008, 01:43 AM
|
#20
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2007
Posts: 5,072
|
Quote:
Originally Posted by Milton
Good ethics are good practice, but not a legal requirement. Proving that specific laws were broken is rather different from showing that executives were negligent, incompetent or greedy: in a non-kangaroo court, anyway (let's hope that a desire to satisfy the bloodlust of an aggrieved proletariat doesn't sacrifice due process).
By definition, scapegoating always distracts attention from root causes.
|
You are stating the obvious!
I do not believe those execs are being used as scapegoats. :confused:
Heck, even if you look at the govt that relaxed regulations... those business execs paid them for the favor. Part of the system is broken and needs to be fixed.
But... We will soon see if any laws were broken.
I am hoping the ones that were cleaver enough to cover their @$$ with the accounting rules trip up and try to cover up... Whether they go to jail for perjury or cooking the books or just being greedy @$$sholes that caused all of us great financial loses... the same result happens. They lose money and their freedom.
At the very least I hope the full force of the Criminal Justice System is focused on them like a laser. Hopefully they will be sued for negligence and have to disgorge every last cent and barred from working in the financial services industry for life. The should be ruined just like they ruined many average people.
Here is the result of their handy work. http://money.cnn.com/2008/10/07/news...ion=2008100715
They did the financial equivalent of dumping nuclear waste in every residential neighborhood coast to coast.
Those AIG execs are still living it up.
http://www.sfgate.com/cgi-bin/articl...MNMD13D2SN.DTL
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|