[quote=pri_dk][quote=CA renter]Firstly, I’m not talking about Rich. He had nothing to do with causing the financial crisis.[/quote]
But he profited from it (and many of us admire him for doing so, btw.)
[quote]there is no question that what many “investors” (including myself) do is completely unproductive and simply takes money from the more productive part of the economy.[/quote]
You believe that? Wow.
[quote]No, not *everyone* on Wall Street, but you’re naive to think that only .001% knew what was going on.[/quote]
So simply “knowing what was going on” is the crime? You mean like Rich (see above) and most of the other folks here?
[quote]Let’s start with those who absolutely knew what they were doing. Their actions are already well documented by multiple investigators and journalists.[/quote]
Can you name any names? Do you have any actual FACTS? Or just vague references to “investigators?”
And now that the “journalists” have found the bad guys for us, exactly what legal principle do we use to take all of their wealth? (as you have suggested as a solution.)[/quote]
As they say, timing is everything…
“Despite Golden West’s track record for double-digit earnings growth, Herb Sandler said he and Marion knew the company needed to diversify beyond home mortgages to remain successful in the future.
“You can go just so far with a one-product company,” he said during the conference call. He emphasized the sale shouldn’t be interpreted as sign that Golden West is worried about a real estate meltdown saddling the company with huge losses, labeling those theories as “a bunch of garbage.”
The Sandlers are in line for a $2.6 billion windfall, based on their 10.24 percent stake in Golden West, according to documents filed with the Securities and Exchange Commission. In an interview, Herb said the couple plans to give all their money away through a foundation that that they set up years ago.”
“Wachovia Corp. (WB), the nation’s fourth largest bank, is muscling into the West with a $25.5 billion deal to buy Golden West Financial Corp. (GWB), a mom-and-pop shop that blossomed into a prized savings and loan.
According to Los Angeles Times’ sources, Angelo Mozilo has been the subject of a secret federal criminal investigation since 2008, and the 3-year investigation has now been officially closed with no indictments.
First Ralph Cioffi and Matthew Tannin in the Bear Stearns case, then Cassano, now Agent Orange. Perps are walking free.”
“The perpetually suntanned founder of Countrywide Credit– Angelo Mozillo– made $521.5 million in compensation from 2000 until 2008. He also coined $140 million in gains from selling his Countrywide stock between November 2006 andOctober, 2007, at the very moment he was learning internally that his company was merchandising soon-to-collapse subprime mortgages– what he described as the most “toxic product” he’d ever seen. He called this expectation “a looming disaster” and the company’s “poison” according to internal emails. But, he told no-one on the outside, not his shareholders, not the regulators, not his board of directors– not even the politicians like Sen. Dodd for whom he had arranged sweetheart deals.
Strangely unfair, then, that Mozillo was able to settle with the SEC by paying only $22.5 million of his own personal money as a fine. The other $46 million plus Mozillo’s legal fees actually will be paid by Bank of America and insurance policies taken out by Countrywide.”
“So control fraud is when the person who controls a seemingly legitimate entity, uses it as a weapon to fraud. In the financial sphere, the weapon of choice is accounting. So here are the four ingredients of the recipe that produce a sure thing of record accounting income.
Grow like crazy
Make preposterously bad loans but at a premium yield.
Have extreme leverage. That means you have a ton on debt.
Put aside only ridiculously low allowances for future loan losses.
You do those four things, you are mathematically guaranteed to report record, albeit fictional, profits in the short term. You are also guaranteed with modern executive compensation, to make the Senior Executives wealthy, and you are guaranteed, because after all, if you think about those four ingredients, they are the perfect recipe as well for maximizing real losses. And that’s why the title of Akerlof and Romer’s article says it all, “Looting: The Economic Underworld of Bankruptcy for Profit.” The firm fails but the executives walk away rich. This is the same concept with my book “The Best Way to Rob a Bank Is to Own One.” It is these internal people who control the seemingly legitimate entity that can get away with financial murder. And here is the really bad news. I mean that is bad news right there, but the really bad news, is that this tends to happen as the FBI warned, and again in 2004, seven years ago. So the next time you hear some moron tell you that no one could have predicted this, it was predicted by the Premiere Law Enforcement entity in the world dealing with white-collar crime.”
“The role played by the Treasury was again obscured, hidden in the $180 billion-plus bailout of AIG. Former CEO Maurice “Hank” Greenberg had used that insurance giant as the counterparty for credit default swaps and financial derivatives originated by Goldman and Lehman. Had Treasury Secretary Henry Paulson not backed the AIG bailout, Goldman would have suffered a $20 billion loss. As a former co-chairman of Goldman with a personal net worth exceeding $850 million, Paulson could not have been unmindful that Goldman’s bonus pool for 2007 was $20 billion.“
This is just scratching the surface. I also think that regulators and politicians who got in the way of investigations during and after the bubble need to be investigated, and if found guilty, forfeit their assets and spend time in jail.
Oddly enough, the people most likely to go to jail for bubble-related crimes are guys like this:
“On Valentine’s Day, the elder Mr. Engle said, his son had entered a minimum-security prison in Beaver, W.Va., to begin serving a 21-month sentence for mortgage fraud. He then proceeded to tell me the tale of how federal agents nabbed his son — a tale he backed up with reams of documents and records that suggest, if nothing else, that when the federal government is truly motivated, there is no mountain it won’t move to prosecute someone it wants to nail. And it was definitely motivated to nail Charlie Engle.”
