Twenty-five people at the heart of the meltdown ... (the Guardian)

[Lorien]

The worst economic turmoil since the Great Depression is not a natural phenomenon but a man-made disaster in which we all played a part. In the second part of a week-long series looking behind the slump, Guardian City editor Julia Finch picks out the individuals who have led us into the current crisis


Alan Greenspan, chairman of US Federal Reserve 1987- 2006
Only a couple of years ago the long-serving chairman of the Fed, a committed free marketeer who had steered the US economy through crises ranging from the 1987 stockmarket collapse through to the aftermath of the 9/11 attacks, was lauded with star status, named the "oracle" and "the maestro". Now he is viewed as one of those most culpable for the crisis. He is blamed for allowing the housing bubble to develop as a result of his low interest rates and lack of regulation in mortgage lending. He backed sub-prime lending and urged homebuyers to swap fixed-rate mortgages for variable rate deals, which left borrowers unable to pay when interest rates rose.

For many years, Greenspan also defended the booming derivatives business, which barely existed when he took over the Fed, but which mushroomed from $100tn in 2002 to more than $500tn five years later.

More:

http://www.guardian.co.uk/business/2009/jan/26/road-ruin-recession-individuals-economy

[ChairmanAgnostic]

1. thank you for this.

damned god article.

[The Doctor.]

16. Given your username, that's a salient comment.

;)

[NYC_SKP]

2. I'd like to see a list of who warned us the best and loudest...

I saw this shit coming down the pike when NAFTA first passed.

Then I couldn't believe the subprime loans being offered a few years ago.

My first home required substantial down payment and good credit, for a ten percent loan...

[seemslikeadream]

3. American International Group (AIG). world's largest insurance firm

CEOs: (From left) Robert Willumstad (July 2008-September 2008), Martin Sullivan (2005-2008), Maurice (Hank) Greenberg (1968-2005)

Company: American International Group (AIG). world's largest insurance firm

On their watch: In Willumstad's brief tenure, AIG stock plunged from around $27 a share
to $2 a share, and the ailing firm agreed to an $85 billion government bailout. Sullivan left
after two quarters of record losses and $20 billion in sub prime-mortgage-related losses.
Greenberg was credited with shaping AIG into the world's largest insurer but was forced
out in 2005 due to a fraud investigation. No charges were filed against him.

Payout: $7 million for Willumstad's three months of work, $47 million for Sullivan and for Greenberg, despite the investigation, a 12 percent stake in AIG. That stake, however, isn't worth what it was once was. After the government bailout, Greenberg's $3billion interest nearly disappeared, and he dropped off the Forbes list of the richest people in the world




http://www.financialweek.com/apps/pbcs.dll/article?AID=/20081012/REG/310139984/1023/OTHERVIEWS

SEE NO EVIL


AIG's former CEO Martin Sullivan ignored the resignation of an auditor who was looking at the insurer's derivatives unit, a congressional investigation alleged.

AIG's auditor scandal
Insurer could have avoided demise if it focused on swaps-unit claims by auditor, who resigned after being denied access, lawmaker charges



By Neil Roland
October 12, 2008 12:01 AM ET

American International Group might have averted disaster if its top executives had paid attention to an internal auditor sniffing around the edges of the insurer's derivatives unit, a congressional investigation found last week.

Instead, they turned away when the highly regarded auditor, a former assistant chief accountant in the SEC's enforcement division, resigned after being blocked from access to the unit's finances by its London-based chief, House Oversight and Government Reform Committee chairman Henry Waxman said.

The findings undercut the contentions of former chief executives Martin Sullivan and Robert Willumstad that the insurance giant was lashed by economic forces and regulatory policies outside its control.

The House panel's investigation found no record of the auditor's resignation in the notes of any board meetings, although the matter had been brought to the board's attention, the California Democrat said.

“It looks like you both brushed it aside,” Mr. Waxman told the former CEOs at a hearing. “He could have given you information that later brought AIG to its knees.”

The disclosures suggest the possible role of mismanagement or even fraud in the demise of the New York-based company that was once the world's largest insurer. It was taken over by the federal government last month, has received $122.8 billion in federal loans, and is trying to sell assets.

Federal investigations disclosed in June are looking into whether AIG executives misled investors about the value of credit default swaps tied to subprime mortgages. The swaps, contracts sold to investors to insure against bond defaults, have led to billions of dollars in AIG write-offs.

[Lorien]

6. That's digusting

"suggest" the possible role of mismanagement or even fraud in the demise of the New York-based company that was once the world's largest insurer...

"Suggest"? Really? These pigs require some serious jail time.

[FreakinDJ]

8. Auditor "Denied Access" constitutes guilt

and the fact they used the London office to do their dirty work suggest conspiracy

[seemslikeadream]

4. It's time we put the flame torch to their keep

http://www.youtube.com/watch?v=VPTdSYTLA10





You tell me there's an angel in your tree
Did he say he'd come to call on me?
For things are getting desperate in our home
Living in the parish of the restless folks I know

Everybody now bring your family down to the riverside
Look to the east to see where the fat stock hide
Behind four walls of stone the rich man sleeps
It's time we put the flame torch to their keep

Burn down the mission
If we're gonna stay alive
Watch the black smoke fly to heaven
See the red flame light the sky

Burn down the mission
Burn it down to stay alive
It's our only chance of living
Take all you need to live inside

Deep in the woods the squirrels are out today
My wife cried when they came to take me away
But what more could I do just to keep her warm
Than burn burn burn burn down the mission walls

[BadgerKid]

5. Their list

Alan Greenspan, chairman of US Federal Reserve 1987- 2006
Mervyn King, governor of the Bank of England

Politicians
Bill Clinton, former US president
Gordon Brown, prime minister
George W Bush, former US president
Senator Phil Gramm

Wall Street/Bankers
Abby Cohen, Goldman Sachs chief US strategist
Kathleen Corbet, former CEO, Standard & Poor's
"Hank" Greenberg, AIG insurance group
Andy Hornby, former HBOS boss
Sir Fred Goodwin, former RBS boss
Steve Crawshaw, former B&B boss
Adam Applegarth, former Northern Rock boss
Dick Fuld, Lehman Brothers chief executive
Ralph Cioffi and Matthew Tannin
Lewis Ranieri
Joseph Cassano, AIG Financial Products
Chuck Prince, former Citi boss
Angelo Mozilo, Countrywide Financial
Stan O'Neal, former boss of Merrill Lynch
Jimmy Cayne, former Bear Stearns boss

Others
Christopher Dodd, chairman, Senate banking committee (Democrat)
Geir Haarde, Icelandic prime minister
The American public
John Tiner, FSA chief executive, 2003-07

... and six more who saw it coming
Andrew Lahde
John Paulson, hedge fund boss
Professor Nouriel Roubini
Warren Buffett, billionaire investor
George Soros, speculator
Stephen Eismann, hedge fund manager
Meredith Whitney, Oppenheimer Securities

[renate]

7. their names need to become a hissing and a byword

We are all suffering greatly for their hubris, greed, and failure... they probably think they're suffering too.

I hope that when the dust settles and we pick ourselves back up to rebuild, their social graves are spat upon and their like will never be seen again.

(I'm a tiny bit angry about this....)

[UpInArms]

9. so why is this Meredith Whitney's fault for calling them on their BS?

some of this list works for me:

Greenspan - cause the SOB is an evil stuuuupid MF
Clinton - for signing off on the death of the Glass Steagal
Hank Greenberg - for being a greedy SOB


didn't see Hank Paulson for being so complicit

lots not making the list that should have

some making the list that should not have

:shrug:

[Stuart G]

10. K and R nt

[jgraz]

11. Don't you mean Twenty-five "Enemy Combatants"?

Just askin...

[i am who i am]

12. Hostile Takeover of global banking/ finance, not scary if u understand it.

Look 4 Ur self, Hedge Fund Investment firm FORTRESS hired Fanny May head in early 2007 as well as many other influential people for their strategic policy shift towards global banking.

Market manipulation allowed these firms the ability to use their substantial interests to create a global bail out plan which is underway. Effectively making themselves the New World Order of global finance.

This was nothing more than a hostile take over of global finance, this is Capitalism. He who has the Capital makes the rules, and an economic system based upon an idea and no real tangible wealth allows for complex theoretical probability models and chemical matrix, and hedge fund derivative etc, etc to sway and crash markets.

THE NEW WORLD ORDER, aint it a beautiful thing. It is only scary if you don't understand it. There is nothing to worry about, these things have a way of correcting themselves, it's Social Science Experiment, in which some of the smartest people to ever live are the players.

A part of me is hoping for their failure. I like camping and fishing, and walking around naked, cant do alot of that in an office.

[Fire1]

13. All true except one small item. ARM's were offered as an

alternative for high risk buyers with poor credit ratings or already heavily in debt. Sizable down payments usually kept the payments down and interst rates moderate.

[mmonk]

14. Here, you can see Naomi Klein take on Mr. Greenspan

from two videos I posted in political videos:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=385x263948

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=385x264013

[The Doctor.]

15. Nice catch!

This is the sort of digging that can save humanity from itself.

[rufus dog]

17. here is the part that is eating me up

To some extent it is all white washed.

Madoff gets to stay at home, Lynch exec sell house to his wife for $100, many on the list are "outstanding Americans." But the water cooler talk is about unions, low income loans, etc. There is no outrage over these people, they aren't treated like piranhas, so as a culture we are rewarding their behavior.