The point is that the rules apply, and it shouldn't matter if you're a financial elite, and it shouldn't matter if some of your products aren't crap. Even if you're producing 100% good deals, it shouldn't matter, your ass should still be in a sling (though granted in that case, probably nobody notices that you broke the rules).
But there weren't rules against the things that people did that broke the system. I don't dispute that rule-breakers exist who have not been prosecuted for breaking rules. But the rules that people broke, by and large, and the people who broke them, have little or nothing to do with the problem we're talking about. If we apply the Sarbox test you suggested, the loans you're angry about were perfectly reasonable.
The point is that these deals were constructed while completely ignoring decades of well established precedent, because the requirements of precedent were inconvenient. Partly as a consequence of this, some percentage of the deals went bad. But all the deals so constructed were fraudulent and illegal.
Please clarify what you mean by 'all the deals' - Are you arguing that any sub-prime mortgage anywhere is illegal? That a no-income-no-down-payment loan is illegal?
It doesn't matter what the outcome was in a particular case. Lots of people played fast and loose with the rules, and there need to be serious penalties for them (or, better, for their bosses who instructed them to do so. Legal discovery is a powerful tool.)
Do you think their bosses told them to break rules? Or did they just go where the money was?
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Date: 2011-03-10 07:06 pm (UTC)But there weren't rules against the things that people did that broke the system.
I don't dispute that rule-breakers exist who have not been prosecuted for breaking rules. But the rules that people broke, by and large, and the people who broke them, have little or nothing to do with the problem we're talking about. If we apply the Sarbox test you suggested, the loans you're angry about were perfectly reasonable.
The point is that these deals were constructed while completely ignoring decades of well established precedent, because the requirements of precedent were inconvenient. Partly as a consequence of this, some percentage of the deals went bad. But all the deals so constructed were fraudulent and illegal.
Please clarify what you mean by 'all the deals' - Are you arguing that any sub-prime mortgage anywhere is illegal? That a no-income-no-down-payment loan is illegal?
It doesn't matter what the outcome was in a particular case. Lots of people played fast and loose with the rules, and there need to be serious penalties for them (or, better, for their bosses who instructed them to do so. Legal discovery is a powerful tool.)
Do you think their bosses told them to break rules? Or did they just go where the money was?