Am I the only one not surprised at all by this report?
No one on the comments so far seems surprised. So, no, I don't think you're the only one not surprised.
Whistleblower: Wall Street Has Engaged in Widespread Tampering of Mortgage Funds
31–40 of 81 posts
Re: Whistleblower: Wall Street Has Engaged in Widespread Tampering of Mortgage Funds
#32Rating agencies - S&P, Moodys, Fitch - are in bed with those they rate. It was a time bomb. It blew up in 2008. It’s a time bomb again.
Re: Whistleblower: Wall Street Has Engaged in Widespread Tampering of Mortgage Funds
#33Wait until Propublica learns that lenders are underwriting based on pro-forma forward Adjusted EBITDA net leverage, not past EBITDA leverage. The whole idea of Adjusted EBITDA is insane to me. We add back "one-time," expenses and other items, but the underlying business ends up seeing similar "one-time," costs every year. The result is that companies often borrow at a leverage ratio that looks 30% smaller than it act…
That’s the beauty of working in finance, it’s all subjective. A janitor can’t fudge a dirty bathroom, a mechanic can’t fudge a broken car, a plumber can’t fudge cold water into hot water. But in finance, you can make whatever results you want come true for a long time. And if you have the government’s back who can print funds, that long time could be until the country blows up.
Re: Whistleblower: Wall Street Has Engaged in Widespread Tampering of Mortgage Funds
#34Earlier quoted context omitted.
50 years ago banking was a very personal business. A business would work locally with their own bank. The bank knew the owners and since they banked with them knew their cash flows. Now banks are national conglomerates. There is a lot of cost in banking and many of the large banks have moved to automated systems to reduce overhead and labor. This doesn't excuse the bank but they are permitting credit for all sorts of…
How about greed? How many decades of repeated patterns of cooking figures, "losing" paperwork, and outright fraud does it take to see that a sizeable percentage of people running the largest financial companies just want to rake in whatever they can. Since so many products are so arcane and/or never disclosed in detail, there's ample opportunity to mess with and profit from just about anything that isn't prima facie…
The first step is to stop bailing out all this fuckery. Look at your politicians stance on wall street bailouts.
Re: Whistleblower: Wall Street Has Engaged in Widespread Tampering of Mortgage Funds
#35Earlier quoted context omitted.
50 years ago banking was a very personal business. A business would work locally with their own bank. The bank knew the owners and since they banked with them knew their cash flows. Now banks are national conglomerates. There is a lot of cost in banking and many of the large banks have moved to automated systems to reduce overhead and labor. This doesn't excuse the bank but they are permitting credit for all sorts of…
How about greed? How many decades of repeated patterns of cooking figures, "losing" paperwork, and outright fraud does it take to see that a sizeable percentage of people running the largest financial companies just want to rake in whatever they can. Since so many products are so arcane and/or never disclosed in detail, there's ample opportunity to mess with and profit from just about anything that isn't prima facie…
Well, one thing we could do to rein in the seemingly endless stream of schemers is let them face the consequences of their actions. Stop bailing out Wall St and the Square Mile, and let them go bankrupt.
The pain would be considerable. But we're used to that now, and it's like ripping a band-aid off: it hurts a lot more for a lot shorter time.
Re: Whistleblower: Wall Street Has Engaged in Widespread Tampering of Mortgage Funds
#36Earlier quoted context omitted.
How about greed? How many decades of repeated patterns of cooking figures, "losing" paperwork, and outright fraud does it take to see that a sizeable percentage of people running the largest financial companies just want to rake in whatever they can. Since so many products are so arcane and/or never disclosed in detail, there's ample opportunity to mess with and profit from just about anything that isn't prima facie…
The first step is to stop bailing out all this fuckery. Look at your politicians stance on wall street bailouts.
And then look at all the voters’ stances when they find out their 401k don’t look so great, or when their governments have to raise taxes to pay for pensions since the pension fund isn’t worth much.
Re: Whistleblower: Wall Street Has Engaged in Widespread Tampering of Mortgage Funds
#37Earlier quoted context omitted.
The first step is to stop bailing out all this fuckery. Look at your politicians stance on wall street bailouts.
And then look at all the voters’ stances when they find out their 401k don’t look so great, or when their governments have to raise taxes to pay for pensions since the pension fund isn’t worth much.
Easier to swallow if the bailout goes directly to these voters instead of this trickle down nonsense.
Re: Whistleblower: Wall Street Has Engaged in Widespread Tampering of Mortgage Funds
#38It’s sort of amazing how easy and widely accepted it is to submit, under oath, completely different corporate financial attestations depending on whether you are dealing with the IRS, the SEC, or FINRA. I can imagine 50 years ago, when they all got the ability to check electronically, and knew that everybody was cheating, but they couldn’t do anything because it would it would crash the economy, and also these comput…
My understanding is that after 9/11, a lot of federal law enforcement resources got retasked away from white collar crime and just never went back. And I think it's part of a general decline in interest in holding people with money to account; in the 1970s, the IRS used to audit 2.5% of returns. Now that's down to 0.45% and falling. This makes a fair bit of sense when you look at who has influence with legislators an…
"But what I think a lot of this misses is that the more a financial system is prone to cash extraction, the less good it becomes at value generation. As an example, we can look in software at the era of Microsoft's dominance. Microsoft was a great cash generator, but its dominance (and misuse of its market power) discouraged a lot of startups). Then antitrust enforcement and the rise of the browser unleashed a whole wave of innovation.
"
Pretty much all big companies are good at making cash while killing innovation. Compared to their size the innovation output of the big tech companies is pretty low.
Since 2008 it has become clear that the financial sector is viewed as an industry that needs to be protected no matter what the cost so you should expect them to keep doing crooked stuff while making boatloads of money. This comes at the expense of other sectors in the economy.
Re: Whistleblower: Wall Street Has Engaged in Widespread Tampering of Mortgage Funds
#39This will continue as long as human beings are in the loop. If it were automated, code-reviewed and made secure we might have a system that could follow the rules.
Re: Whistleblower: Wall Street Has Engaged in Widespread Tampering of Mortgage Funds
#40Earlier quoted context omitted.
And then look at all the voters’ stances when they find out their 401k don’t look so great, or when their governments have to raise taxes to pay for pensions since the pension fund isn’t worth much.
Easier to swallow if the bailout goes directly to these voters instead of this trickle down nonsense.
It’s hard to make a cash bailout that isn’t based on income/wealth due to the optics. By inflating asset values, it isn’t as discriminating against those on the upper end of the income/wealth scale, who also probably have major business interests in propping up asset values.