Ruining the economy means never having to say you’re sorry. And it means never having to take ownership of, or even acknowledge, the desolation that has washed over the country over the last five years.
Most of the instigators of the 2008 financial collapse (the ones that survived the crash intact) have long since moved on. They were greatly aided by a government policy that extracted cash, but not admissions of guilt, as the price of walking away from the collapse. As a recent filing in a Manhattan courtroom shows, that policy continues to leave victims of the financial meltdown in the lurch, years after the crisis itself.
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As much malfeasance there was which created the collapse, this act was not one of them. As distasteful as it may be to profit from anything that fails, it is fully legal to do so. The financial markets are loaded with securities which go up in value, when the underlying asset goes down. Paulson saw a way to profit from the massive bubble created by the government, and did so successfully. Those mortgages that failed would still have failed has he not created this instrument. But in finding a way to make money from it, he created wealth, that otherwise, would not be there. That is one of the beauties of our system. Thee are no victims here, but the government must punish someone, and he was an easy target.
He did not create wealth, he took it from others not as devious. As for the government, they didn't create a bubble, crooked loan orifinators and banks, loan companies, developed these bogus notes for a quick buck.
Totally disagree with you. Investments are not a zero sum game. The money that Paulson made came out of the pockets of others. When you create a financial instrument, then bet against it, don't you think that, as a financial professional, Paulson knew he's going to win the bet and that those who invested in Abacus were going to get hosed? How else do you take "The Abacus deal blew up months after it closed, netting Paulson's firm a quick $1 billion." Where do you think that money came from? There are "no victims here"? Guess you weren't an investor in Abacus. Nothing personal but you need to brush up on your knowledge of the financial markets.
The sad thing here is the real villains will forever go unpunished. It's governments job to protect the public against the malfeasance of corporations - government failed.
So we put people in prison for selling marijuana but those who choose to defraud the public have no consequences, short of their company paying a fine? Unbelievable. White collar crime like this needs to be prosecuted with those convicted going to big boy prison, not the country club prisons for "white collar" criminals. If financial institutions are allowed to act with impunity we'll continue to see the same behavior out of them. It's common sense!
You should read a book that Taibbi wrote called griftology. It by far points out how crooked and duplicitous these financial institutions along with our wonderful government are the ones that are ultimately responsible for our countries demise.
While banks were active participants in the financial collapse, you stop much too short in your thinking charge thema s accountable. The foundation of the finacial collapse was a housing bubble largely generated by the loose money and "homeownership-for-all" Policies of Congress and varipus federal agencies. Just before the collapse in 2008, about 60% of the mortgages being underwritten by Fannie and Freddie were non-conforming loans by traditional standards - No income documentation, no downpayment, bad credit history, etc. These standards wre in place due to the policies promoted by fools like Barney Frank, and when the market collapsed the MBS securities containing these liar loans became unmarketable and the balance sheets of the banks holding them collapsed.
Congress via bad policies in expolsively expanding Freddie and Fannie and forcing CRA on banks , etc. is the guilty party. The public tax[ayer is still paying for these errors.
Funny how the Congresssional studies all blame the banks?
great column. right on. insider taking care of their own. no one in jail. bigger than ever. greed run wild