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"Too big to fail has become too big to trial"

Cermank
Posts: 3,773
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2/18/2013 9:43:17 AM
Posted: 3 years ago
http://www.youtube.com...

Senator Elizabeth Warren asks federal bank regulators why no banks were taken to trial in the aftermath of the financial crisis. This was, gutsy. Great. And true.
wrichcirw
Posts: 11,196
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2/22/2013 12:39:02 AM
Posted: 3 years ago
Personally, I think the rating agencies were more culpable. Those ARE being taken to court at the moment.

After all, what did banks really do wrong? They made bad business decisions based on faulty information. That information came from rating agencies.

http://www.moneynews.com...
http://topics.nytimes.com...
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
Skepsikyma
Posts: 8,280
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2/22/2013 9:37:29 PM
Posted: 3 years ago
At 2/22/2013 12:39:02 AM, wrichcirw wrote:
Personally, I think the rating agencies were more culpable. Those ARE being taken to court at the moment.

After all, what did banks really do wrong? They made bad business decisions based on faulty information. That information came from rating agencies.

http://www.moneynews.com...
http://topics.nytimes.com...

Goldman Sachs basically bet against the repackaged mortgages that they were selling. If that isn't securities fraud then I don't know what is. You could make a case for some of the other banks, but they knew damn well what they were doing, it's sort of their MO.
"The Collectivist experiment is thoroughly suited (in appearance at least) to the Capitalist society which it proposes to replace. It works with the existing machinery of Capitalism, talks and thinks in the existing terms of Capitalism, appeals to just those appetites which Capitalism has aroused, and ridicules as fantastic and unheard-of just those things in society the memory of which Capitalism has killed among men wherever the blight of it has spread."
- Hilaire Belloc -
wrichcirw
Posts: 11,196
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2/23/2013 12:36:32 AM
Posted: 3 years ago
At 2/22/2013 9:37:29 PM, Skepsikyma wrote:
At 2/22/2013 12:39:02 AM, wrichcirw wrote:
Personally, I think the rating agencies were more culpable. Those ARE being taken to court at the moment.

After all, what did banks really do wrong? They made bad business decisions based on faulty information. That information came from rating agencies.

http://www.moneynews.com...
http://topics.nytimes.com...

Goldman Sachs basically bet against the repackaged mortgages that they were selling. If that isn't securities fraud then I don't know what is. You could make a case for some of the other banks, but they knew damn well what they were doing, it's sort of their MO.

GS is not a bank.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
Skepsikyma
Posts: 8,280
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2/23/2013 1:48:18 PM
Posted: 3 years ago
At 2/23/2013 12:36:32 AM, wrichcirw wrote:
At 2/22/2013 9:37:29 PM, Skepsikyma wrote:
At 2/22/2013 12:39:02 AM, wrichcirw wrote:
Personally, I think the rating agencies were more culpable. Those ARE being taken to court at the moment.

After all, what did banks really do wrong? They made bad business decisions based on faulty information. That information came from rating agencies.

http://www.moneynews.com...
http://topics.nytimes.com...

Goldman Sachs basically bet against the repackaged mortgages that they were selling. If that isn't securities fraud then I don't know what is. You could make a case for some of the other banks, but they knew damn well what they were doing, it's sort of their MO.

GS is not a bank.

It's much more than that, but it certainly fills the role of investment bank: http://www.goldmansachs.com...
"The Collectivist experiment is thoroughly suited (in appearance at least) to the Capitalist society which it proposes to replace. It works with the existing machinery of Capitalism, talks and thinks in the existing terms of Capitalism, appeals to just those appetites which Capitalism has aroused, and ridicules as fantastic and unheard-of just those things in society the memory of which Capitalism has killed among men wherever the blight of it has spread."
- Hilaire Belloc -
darkkermit
Posts: 11,204
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2/23/2013 2:29:27 PM
Posted: 3 years ago
At 2/23/2013 2:25:09 PM, innomen wrote:
I'd ask the senate why no senators have been brought to trial for insider trading.

Well they don't need to go to trial, they can instead pay the fee and settlement expenses.

oh wait, that didn't happen either.
Open borders debate:
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Stephen_Hawkins
Posts: 5,316
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2/23/2013 2:33:53 PM
Posted: 3 years ago
At 2/22/2013 12:39:02 AM, wrichcirw wrote:
Personally, I think the rating agencies were more culpable. Those ARE being taken to court at the moment.

After all, what did banks really do wrong? They made bad business decisions based on faulty information. That information came from rating agencies.

http://www.moneynews.com...
http://topics.nytimes.com...

So what? If a bloke tells you "gamble all your money on 26 of the roulette wheel", you're still responsible. Especially when you know that the information can be faulty.
Give a man a fish, he'll eat for a day. Teach him how to be Gay, he'll positively influence the GDP.

Social Contract Theory debate: http://www.debate.org...
wrichcirw
Posts: 11,196
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2/24/2013 1:34:10 PM
Posted: 3 years ago
At 2/23/2013 1:48:18 PM, Skepsikyma wrote:
At 2/23/2013 12:36:32 AM, wrichcirw wrote:
At 2/22/2013 9:37:29 PM, Skepsikyma wrote:
At 2/22/2013 12:39:02 AM, wrichcirw wrote:
Personally, I think the rating agencies were more culpable. Those ARE being taken to court at the moment.

After all, what did banks really do wrong? They made bad business decisions based on faulty information. That information came from rating agencies.

http://www.moneynews.com...
http://topics.nytimes.com...

Goldman Sachs basically bet against the repackaged mortgages that they were selling. If that isn't securities fraud then I don't know what is. You could make a case for some of the other banks, but they knew damn well what they were doing, it's sort of their MO.

GS is not a bank.

It's much more than that, but it certainly fills the role of investment bank: http://www.goldmansachs.com...

An investment bank is not exactly a bank. It doesn't take in capital to lend to others...it is not an integral part of managing the money supply. It's much more just a name we give to an agent involved in high-end deal-making.

On GS specifically, I agree with you that it's much more culpable than most of the other investment banks, but I don't see the OP addressing IB specifically.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
wrichcirw
Posts: 11,196
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2/24/2013 1:35:19 PM
Posted: 3 years ago
At 2/23/2013 2:33:53 PM, Stephen_Hawkins wrote:
At 2/22/2013 12:39:02 AM, wrichcirw wrote:
Personally, I think the rating agencies were more culpable. Those ARE being taken to court at the moment.

After all, what did banks really do wrong? They made bad business decisions based on faulty information. That information came from rating agencies.

http://www.moneynews.com...
http://topics.nytimes.com...

So what? If a bloke tells you "gamble all your money on 26 of the roulette wheel", you're still responsible. Especially when you know that the information can be faulty.

It's a bit more complicated than that. There are government agencies that are prohibited from investing in anything except AAA paper. Ratings agencies determine that rating - they are the gatekeepers.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
wrichcirw
Posts: 11,196
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2/25/2013 2:18:50 AM
Posted: 3 years ago
I just want to add that rating agencies have a ridiculous amount of power and influence in financial markets.

When the US lost its AAA credit rating, this wasn't the government making the assessment...it was a rating agency. THEN governments around the world, as well as private investors, acted accordingly.

It makes you wonder who exactly is in charge.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
Ragnar_Rahl
Posts: 19,297
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2/25/2013 5:29:19 AM
Posted: 3 years ago
At 2/22/2013 9:37:29 PM, Skepsikyma wrote:
At 2/22/2013 12:39:02 AM, wrichcirw wrote:
Personally, I think the rating agencies were more culpable. Those ARE being taken to court at the moment.

After all, what did banks really do wrong? They made bad business decisions based on faulty information. That information came from rating agencies.

http://www.moneynews.com...
http://topics.nytimes.com...

Goldman Sachs basically bet against the repackaged mortgages that they were selling. If that isn't securities fraud then I don't know what is.
How about "signing a contract you don't intend to fulfill?" This concept of "securities fraud" was invented because they couldn't pin any real fraud on the people they didn't like.
It came to be at its height. It was commanded to command. It was a capital before its first stone was laid. It was a monument to the spirit of man.
Ragnar_Rahl
Posts: 19,297
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2/25/2013 5:30:40 AM
Posted: 3 years ago
I mean, what does that action even have to do with the concept of fraud? You sell something, you bet against it. What falsehood is involved?
It came to be at its height. It was commanded to command. It was a capital before its first stone was laid. It was a monument to the spirit of man.
darkkermit
Posts: 11,204
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2/25/2013 7:13:50 AM
Posted: 3 years ago
At 2/25/2013 2:18:50 AM, wrichcirw wrote:
I just want to add that rating agencies have a ridiculous amount of power and influence in financial markets.

When the US lost its AAA credit rating, this wasn't the government making the assessment...it was a rating agency. THEN governments around the world, as well as private investors, acted accordingly.

It makes you wonder who exactly is in charge.

there was no increase in US interest rate once it losts its AAA ratings.

http://economistonline.muogao.com...
Open borders debate:
http://www.debate.org...
wrichcirw
Posts: 11,196
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2/25/2013 10:48:35 AM
Posted: 3 years ago
At 2/25/2013 7:13:50 AM, darkkermit wrote:
At 2/25/2013 2:18:50 AM, wrichcirw wrote:
I just want to add that rating agencies have a ridiculous amount of power and influence in financial markets.

When the US lost its AAA credit rating, this wasn't the government making the assessment...it was a rating agency. THEN governments around the world, as well as private investors, acted accordingly.

It makes you wonder who exactly is in charge.

there was no increase in US interest rate once it losts its AAA ratings.

http://economistonline.muogao.com...

The market is complicated. I can simply argue that it had an impact, but countervailing forces in the other direction overwhelmed the impact. Or, I could argue that the spike in gold prices immediately following the decision demonstrated a fear in utilizing a sub AAA country as the world's reserve currency. Regardless, credit agencies have a material impact, and unless you are able to definitely correlate bond market movements to certain news events (good luck with that), there's no reason to think otherwise.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
wrichcirw
Posts: 11,196
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2/25/2013 12:33:55 PM
Posted: 3 years ago
At 2/25/2013 5:30:40 AM, Ragnar_Rahl wrote:
I mean, what does that action even have to do with the concept of fraud? You sell something, you bet against it. What falsehood is involved?

If you are a homebuilder, and build faulty homes for the purpose of buying the underlying insurance contracts and collecting on premiums when those homes collapse, that's a clear conflict of interest and most definitely a fraudulent store front. You are ostensibly building homes, but your main business is actually profiting when the homes you build fail.

What if McDonalds started selling food laced with e.coli, because they somehow were able to acquire life insurance contracts on their customers?

This is somewhat akin to what Wall Street did on a massive scale.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?