Comments on: Wall Street's Shadow Market
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- This economic mess was a long time coming. This is nothing more that an elaborate ponzi scheme. This was a worst than insider trading. How were people who knew they could''nt afford to purchase homes get a mortage. The home owners felt, well if the banks give me the mortgage if on them. Mortgage brokers, mortgage originators, bankers. on up the line line their pockets for a few year, before they cause the distruction of the econmy, here and a throughout the world. The bankers and politicians lied to the investors, and general public for years. They are still encourageing the investors to continue to invest in a market that has to continue to fail.. How can we continue to print money that is backed by nothing. CRedibility is lost, we are financing a coulpe of wars that we cannot win. We are in debt to othere countries that we will never be able to repay. We talk about rebuilding Iraq and Afganistan, when we have communities in this country that the government have neglected. Our infrastruct is falling a part. We have exported thousands of jobs to other countries. We produce nothing, not even our food. Sure we can print money, but what is it backed by. This is incompetence from the highest level, starting with White House, and every politican in office today. Thsi problem will not be over anytime soon. This only the tip of the ice berg. The situation will continue to deteriorate for the next couple of years.
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- To rdgamble:
The reason this bailout happened was to (hopefully) prevent you from losing your job and even your family, not to mention losing almost all of your life savings (any not FDIC insured). The best thing to do is to look at the cost/benefit analysis. You act like this crisis was never going to affect you. You need to look harder at it. It would have. Would you be willing to lose everything you own just to satisfy your judgement of Wall Street? I doubt it. The hope is this package will soften the blow for you and everyone else, not just the crooks who got us into this. - Reply to this comment
- To Stunned3:
I agree about the loopholes in regulation of Wall Street, but had the Bush Admin. pushed hard against resistance to solve the problems with Fannie and Freddie several years ago Bush would''ve been tarred and feathered as racist and anti-poor people (going against his image of "compassionate conservative"), solving a problem that hasn''t occurred yet, and so is not obvious. Even 60 Minutes and you might be excoriating him for that right now. I agree he should''ve taken the hit anyway to do the right thing and head off a problem before it became a disaster. IMO he''s done this already with the Iraq war. Why he didn''t take this on as well I don''t know. - Reply to this comment
- I liked this report, but I feel like it doesn''t tell the whole story. CDS''s are used for all sorts of securities, not just mortgage-backed ones. The reason the financial failure can be pinpointed to the risky mortgages backed and sold by Fannie and Freddie is this is where the cascade of failures began. One could just as easily make the case that if Fannie and Freddie hadn''t been promoting what were clearly bad mortgages, and cooking their books, this crisis wouldn''t have happened, even if CDS''s were used. I understand that one of the people interviewed said if there were no CDS''s involved we wouldn''t be in the mess we''re in now, but I don''t think you can put the blame totally on them. It was the combination of the two: the crazy mortgages that Fannie and Freddie promoted, bolstered by the loose standards promoted by the tweaked CRA; and the CDS''s used to "insure" them. It was a %u201Cperfect storm%u201D of carelessness and greed.
I think the CEO of IDSA was right when he said the people involved didn''t understand the risk of the mortgage securities, and this may be because Fannie and Freddie did not reveal the true risk. I agree that CDS''s should be regulated like insurance. This crisis clearly shows the need for that. Insurance is supposed to be against the unknown, though insurers try to gauge risk. CDS''s assume that the sellers always know the amount of risk involved. This situation showed the flaw in that way of thinking. - Reply to this comment
- If I invest in an irresponsible company that goes broke, I lose my money.
Shouldn''t the people who invested in "Credit Default Swaps" after making a risky investment in the chopped up sub-prime mortages securities, - shouldn''t they simply lose their investment money if the NOT-insurance "Credit Default Swap" company they selected doesn''t have the funds to cover the loss? Why should we tax-payers secure them? - Reply to this comment
- If I invest in an irresponsible company that goes broke, I lose my money.
Shouldn''t the people who invested in "Credit Default Swaps" after making a risky investment in the chopped up sub-prime mortages securities, - shouldn''t they simply lose their investment money if the NOT-insurance "Credit Default Swap" company they selected doesn''t have the funds to cover the loss? Why should we tax-payers secure them? - Reply to this comment
- If I invest in an irresponsible company that goes broke, I lose my money.
Shouldn''t the people who invested in "Credit Default Swaps" after making a risky investment in the chopped up sub-prime mortages securities, - shouldn''t they simply lose their investment money if the NOT-insurance "Credit Default Swap" company they selected doesn''t have the funds to cover the loss? Why should we tax-payers secure them? - Reply to this comment
- In essence, these men (and women?) are gambling addicts. Our system has contributed to their pathology, and our elected officials have now enabled them with our money. It''s the same as getting burned by a drug-addicted friend or relative, except that it''s a lot more expensive, and most of us who are actually paying for this have no relationship with those who have burned us. We need to stop glorifying money and those who make a ton of it. Anyone who has made a whole lot of money has usually done somebody out of something to get it. This time, they''ve done the rest of the citizens of this country out of some of their investments, some of their pensions, and a good-sized chunk of the resources we could have used for health care, education, building and maintaining our infrastructure, changing our dependence on oil (talk about a gamble!), etc.
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- Wow, what a smug SOB.
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- The reason this happened again is simply because the folks that we have elected (yes, we elected) are complicit in this scheme. You cannot have anyone who has a financial interest make rules and regulations for their own industry.
Human nature whether anyone wants to admit it or not is GREED, and that''s why we''re here again. It''s the old cliche'' the fox watching the henhouse. That''s why the bailout was wrong, the taxpayer just bailed out corporate CEO''s and the elected officials who supported the bill don''t care about the taxpayer, all they care about is the lobbying groups and where their next donation is coming from and who have made millions even billions on the theft and deception and we got the bill! Where did the bill get us a Dow below 10,000 and trillions more lost in 401k''s! We haven''t even begun to see the end, but the big dogs will rest easy tonight because we bailed them out.
It''s really sad when the elected officials no longer do their jobs and it''s more about the almighty dollar then growing a healthy, stable, safe country and economy.
If anyone thinks that whatever President coming in can fix this, I have a bridge to sell them. No I''m not angry or bitter just realistic I have seen this happen over and over with the same result. That my friends is the definition of insanity!
Remember WorldComm, Enron,? That will seem like prosperous times unless we really change and I''m not talking Barack or John. - Reply to this comment
- The reason this happened again is simply because the folks that we have elected (yes, we elected) are complicit in this scheme. You cannot have anyone who has a financial interest make rules and regulations for their own industry.
Human nature whether anyone wants to admit it or not is GREED, and that''s why we''re here again. It''s the old cliche'' the fox watching the henhouse. That''s why the bailout was wrong, the taxpayer just bailed out corporate CEO''s and the elected officials who supported the bill don''t care about the taxpayer, all they care about is the lobbying groups and where their next donation is coming from and who have made millions even billions on the theft and deception and we got the bill! Where did the bill get us a Dow below 10,000 and trillions more lost in 401k''s! We haven''t even begun to see the end, but the big dogs will rest easy tonight because we bailed them out.
It''s really sad when the elected officials no longer do their jobs and it''s more about the almighty dollar then growing a healthy, stable, safe country and economy.
If anyone thinks that whatever President coming in can fix this, I have a bridge to sell them. No I''m not angry or bitter just realistic I have seen this happen over and over with the same result. That my friends is the definition of insanity!
Remember WorldComm, Enron,? That will seem like prosperous times unless we really change and I''m not talking Barack or John. - Reply to this comment
- The CEO%u2019s and people who run Wall Street should be put on trial for treason!! The deliberately undermined the financial well being of their country. They betrayed their country for money %u2013 a lot of it. But what they did was commit treason. Plain and simple. Put them on trial and sentence them to death if convicted.
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- These CEO%u2019s put a name to what any other business would call insurance and said to its shareholders and the general public that this was legal. It is still an insurance policy that they could not back. These people need to arrested, have all their assets seized and be prosecuted.
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- Tell me any executive that is worth a million dollars a year and I will show you someone who is overpaid for what they actually do. Are they held responsible for anything? NO! Why not? If we can hold CEO''s, CFO''s, and other executives responsible for their actions or inactions (didn''t do their jobs) and put them in jail, reach in their pockets and take the ill gotten money back, maybe just maybe they would think twice about entering into these get rich quick sceams that the credit default swaps, hidden shadow markets, and attempts to skirt the financial laws present and have resulted in. I thought Wall Street learned it''s 1929 Crash lessons. New day, new ideas, and different players have caused the same resulting problem and now we are all facing the same trickle down to the Great Depression of 2009.
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- This risky operation was not only risky, incompetent of individuals or corporations to get into, but in essence a crime with a different name. The attitude of the leaders and board members of our economic futures all seem to think they can rape the financial institutions of huge salaries year after year and not have it result in anything. The money generated by these tycoons should be traced, presently by the FBI, federal legal action must be started, and proceeds from these actions must be also started to recover as much of this greedly gathered money to protect the American and World Economies before we end up in the next Great Depression. Reasonable salaries must be set and golden parachutes made illegal. If these people need golden parachutes then they were incompentent or got fired. They do not deserve to additionally harm any company. If they cannot live with that then let them go unemployeed, simple as that.
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- Dear 60 Minutes: The fact that Wall Street''s greed and incompetance caused the 1929 Disaster which in effect caused the Great Depression is known. This credit market and risks which Wall Street Spun used articles which circumnavigated laws and common since into repackaged securities is criminal. Even in your presentation the Robert Pickle, DEO of the ISDA appears to be a crook and cannot or will not explain what this unregulated shadow market pf credit default swaps is all about. He is either spinning this Ponzi operation, knows exactly what it is and will not say, or has been told by his legal staff to not say anything that will incriminate him or the ISDA.
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- But if the telecoms can get felony illegal wiretapping acts reversed through retroactive immunity, why can''t Wall Street raiders be retroactively forced to relinquish their illegitimate gains? Why should these corporate raiders keep their Nantucket mansions, which we retroactively paid for?
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- This piece is very one-sided. The claim that a credit default swap is "insurance" is patently wrong (just look up the legal definition if "insurance" which means indemnity). Credit default swaps are as much insurance as any other derivative contract - exchange-traded or not - including stock options. Unfortunately, it doesnt help to educate people about why we are in the current mess - and that credit default swaps are just a symptom of the problem.
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- Why are ''Credit Default Swaps'' not fraud? They are insurance with a different name to avoid regulation. If I am running a ''Ponzi Scheme'' but call it a different name do I avoid being prosecuted? I want the 10% penalty that I paid for early withdrawals from my IRA account back. Rather than taking loans to pay my bills that I knew I could not pay back because I am unemployed after my company of 20 years was moved overseas, I took the money from my retirement to pay bills knowing it cost me 10% to do it. Now my taxes and penalty''s are being used to bail out fraudulent companies and the people running them. In other words, I should do the WRONG thing and executors of the country, politicians, will cover my ***. I want my money back!
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- Why are ''Credit Default Swaps'' not fraud? They are insurance with a different name to avoid regulation. If I am running a ''Ponzi Scheme'' but call it a different name do I avoid being prosecuted? I want the 10% penalty that I paid for early withdrawals from my IRA account back. Rather than taking loans to pay my bills that I knew I could not pay back because I am unemployed after my company of 20 years was moved overseas, I took the money from my retirement to pay bills knowing it cost me 10% to do it. Now my taxes and penalty''s are being used to bail out fraudulent companies and the people running them. In other words, I should do the WRONG thing and executors of the country, politicians, will cover my ***. I want my money back!
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