The Financial Crisis Inquiry Commission Report : The financial crisis was completely avoidable [View All]

[Better Believe It]

FCIC: Financial Crisis Was Avoidable
By: David Dayen
January 26, 2011

The Financial Crisis Inquiry Commission report is sure to provide a powerful reinforcement to the growing lack of faith in elites and especially the financial industry. Because they will outline, in painstaking detail, how the financial meltdown of 2008 was completely avoidable – the result of policy failure at the highest levels of government and Wall Street, failures that bordered on criminal and that have never been fully adjudicated.

This failure was not limited to one party or one set of elites. Everyone at the top level of the business and government food chain had a role to play in creating the conditions to crash the economy and cause untold and unnecessary suffering for hundreds of millions across the planet. If this were only the elite’s playground, if only they bore the consequences for their actions, it would be acceptable to dismiss the entire process. But in fact, that’s been the opposite of what occurred. Financial greed and mismanagement had a profound effect on the world’s poor and plunged countries across the globe into a near-depression, but just two years later, they’re back on top, strutting around Davos, thrilled and optimistic and still laden with bonus cash. Almost nothing changed for the elites who irresponsibly destroyed the global economy; almost everything changed for those without the same level of power and influence.

The worst part about this financial crisis is that it has not ended. On an almost daily basis, we see additional reports of foreclosure fraud, the broad cover-up of the failures in securitization that were at the heart of the crisis. Just yesterday, a Bank of America home mortgage unit was ordered to stop all foreclosures in Nevada, a non-judicial foreclosure state, that aren’t authorized by a court order. There have now been allegations of robo-signers on the notice of default, virtually the only thing that has to be done properly in these non-judicial foreclosure states. In a separate case, Countrywide (now a division of BofA) has been suit by a coterie of investors, saying that the mortgage-back securities they bought from Countrywide were completely misrepresented. This is an example of the continuing mortgage bond scandal and the repurchase wave that threatens to swamp major banks.

The reason so many people have lost faith in elites is because they see a country operating without a rule of law, with rogue criminals still working at major banks across the country and a two-tiered system of justice depending on your power and influence. The FCIC report will provide powerful proof of this.



http://news.firedoglake.com/2011/01/26/fcic-financial-crisis-was-avoidable/


-------------------------------------------




Financial Crisis Was Avoidable, Inquiry Finds
By SEWELL CHAN
January 25, 2011

The 2008 financial crisis was an “avoidable” disaster caused by widespread failures in government regulation, corporate mismanagement and heedless risk-taking by Wall Street, according to the conclusions of a federal inquiry.

The commission that investigated the crisis casts a wide net of blame, faulting two administrations, the Federal Reserve and other regulators for permitting a calamitous concoction: shoddy mortgage lending, the excessive packaging and sale of loans to investors and risky bets on securities backed by the loans.

“The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done,” the panel wrote in the report’s conclusions, which were read by The New York Times. “If we accept this notion, it will happen again.”

While the panel, the Financial Crisis Inquiry Commission, accuses several financial institutions of greed, ineptitude or both, some of its gravest conclusions concern government failings, with embarrassing implications for both parties.

Read the full article at:

http://www.nytimes.com/2011/01/26/business/economy/26inquiry.html