So. Why aren't bank executives swinging from lampposts?

[texdav]

Originally Posted by floridasandy

i actually agree with some of your post, however it still doesn't address the issue that we have an enforcement division which needs to do its job! if you get assaulted, the police need to investigate. if you get robbed, the police need to investigate. i am simply stating that the fraud on wall street needs to be investigated, not because people didn't do their "research" but simply because a fraud was committed. as far as investment, personally i would never trust my money with someone else but surely you can see the potential future damage to responsible taxpayers and /or homeowners if pension fraud is allowed to continue unabated.

First you have to recomngnise the fraud and then being a government agency get past the politics.Much of the trouble with the SEC is they are samrt than many but not as smarty as the crooks often times. that said many times they and attorney generals pick on politcal enemies. That is what was wrong with Switser;he hounded people and then keep it up until they made a plea;only goig to court oine time which is lost as I rememeber. Its really a two way street with government. They should have got madofff from the compaints tho.Too often investiagtions are strated from politcal enemies and can be used to destroy as well as regualte. That is wht was wrong with Switzer;pure politics.

[floridasandy]

Originally Posted by kemcnyc

Hi florida- I just want to point out that the OP asked why "bank executives" were not blamed more in relation the the meltdown of the housing market via securitization. I later posted that the Mtge broker industry committed fraud and deserve blame and the "bank executives" were scapegoats. I note that bank executives may not have been diligent, but this is not outright fraud.

You refer to Bernie Madoff in this same context, but this is not apples to apples. The regulation for a Bank is much higher than for "Made-Offs" Firm which is an Investment Firm... like a boutique shop for Private Investors. His FRAUD was the creation of false trades. He was taking investor money and using this to pay prior commitments (which were basically fake "profits" on trades that did not exist). Horrifying and BLATANT fraud... but not apples to apples with the tone of the OP in my opinion.

It did not have anything directly to do with the securitization of mortgages and the housing bust.

Just want to clarify.

i was disagreeing with traderx's position that we did not need the SEC. if you look at my prior post, i did not rank bank executives as high on culpability as wall street, which chose to repackage the mortgages and engage in fraudulent "ratings". they have some culpability for granting mortgages to unqualified buyers and not doing due diligence, but i still think the highest culpability is with the government for bailing out the wall street firms which engaged in dangerous, speculative, and often fraudulent behavior.

the worst part is that there still are no safeguards in place to stop wall street from screwing up again and stop the government from bailing them out again.......

Consider the fact that Congress has not even reported out of any House or Senate Committee any regulatory authority for the giant derivatives businesses that places bets on bets on bets in very complex financial instruments. Trillions of lost dollars, destabilization of the economy, depletion of pension funds and college endowments—to name some affects—and Washington is STILL IN STASIS, sitting on its cushions of corporate campaign cash and consorting with industry lobbyists who want nothing done. (nader)

[eskercurve]

You can't put the blame on any one person or action or institution. There's plenty of blame to pass around ...

... to the consumer, who honestly thought he/she could afford a 5 bed / 4 bath 3500 sq ft home with three stories and two car garage on $45k a year (there was a case in California where a woman who was a janitor making around that much a year said she got a $740k loan by claiming potential renters of rooms as income)...

... to the banks, who were loose in their lending policies (remember not ALL banks were irresponsible, the vast majority weren't, only the major ones ... case in point my local bank is expanding even in a recession) ...

... to the Federal Reserve, and Alan Greenspan, for instituting a policy of easy money and low interest rates on debt, forcing major institutions to look elsewhere for larger returns, and then not helping by duping the banks to believe that credit is infinite, which allowed the consumer with 45k a year to take out the loan ...


Hindsight is 20/20 and it's easy to demonize one scapegoat while ignoring our own sheer stupidity. What we need to do now is de-leverage and that's exactly what the consumer is doing by paying down credit card debt and car debt and housing debt, and saving more.

[Bob from down south]

I don't care about blame, I want to see pain and retribution exacted on each and every player in the debacle. Those who borrowed too much should lose their houses and/or their a**es. Too bad, so sad--you were stupid. Those that made poorly collateralized loans in utter defiance of all traditional good banking practice--ditto.

When I see somebody with a foreclosure notice on the door and their furniture on the lawn or going into a Ryder truck, I don't feel sad. I feel relief.

But back to the OP's question, why aren't bankers swinging from lampposts, I suspect it's probably because there are stronger and better-enforced laws against defacing lampposts in this country than there are against defrauding the taxpayers of trillions of dollars.