Financial Crisis Was Avoidable, Inquiry Finds

http://www.nytimes.com/2011/01/26/business/economy/26inquiry.html?_r=1&hp

Oh crap, we might be really talking perp walk here. Check out the last paragraph. It sounds like the gods might have just got burnt.

"Of the banks that bought, created, packaged and sold trillions of dollars in mortgage-related securities, it says: “Like Icarus, they never feared flying ever closer to the sun.”



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 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.”

Is Warren worried?

http://finance.yahoo.com/news/Warren-Buffett-Forced-to-cnbc-3064696935.html?x=0&sec=topStories&pos=3&asset=&ccode=

Just how obvious is it that the financial community is a tight knit little family?
Like the blue blood lines old, their incestuous ties have bred in the fate of hemophilia.
How much sway does a major shareholder have by the way? Is it enough to have made Moody bow to Berkshire's will?

Warren Buffett Forced to Testify Before Financial Crisis Commission

Warren Buffett's appearance next week before the Financial Crisis Inquiry Commission is a "command performance," after he was subpoenaed to testify at a hearing focusing on the credit rating agencies.

Berkshire Hathaway is Moody's largest shareholder, although Buffett's company has been reducing those holdings in recent months. Several Moody's executives, including its current CEO, will also be answering questions.

Fortune's Carol Loomis reports tonight (Thursday) that the Commission had to resort to what Gary Cohen, the FCIC's general counsel, called a "compulsory process" after Buffett turned down several invitations to be questioned.

Only in America

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7564598/Fed-boss-Greenspan-says-no-one-saw-the-crisis-coming.-Really.html


Only in America. Only in America would it be possible to spawn a financial crisis so devastating that it would collapse the entire world economy.


Only in America could the man responsible for interest rates and banking regulation at the time, Alan Greenspan, incredulously insist, as he has again in testimony to the Financial Crisis Commission, that he had very little to do with it.

And only in America could you imagine the story of a one-eyed neurology intern with undiagnosed Asperger's Syndrome (no not Gordon Brown) who ended up making a fortune by applying the principles of "value investing" to subprime mortgage lending. Greenspan says no one saw it coming. Well, this man did.


Everyone has heard of Warren Buffett, the modern day master of "value investing", and most will recognise the name of John Paulson, the hedge fund manager who famously made billions riding the credit crunch storm.

But not many will know of Dr Mike Burry, a one time neurologist who according to a new book* by the former bond salesman Michael Lewis, predicted the crisis almost exactly and persuaded Wall Street to create the instruments that would allow him to capitalise on it.

Testimony of Michael Mayo before the financial crisis commission

http://www.fcic.gov/hearings/pdfs/2010-0113-Mayo.pdf



Very worth the read kids.
What I can't understand is how the banks were allowed to not make their insurance deposits funds for 10 years and what did they do with that excess money they didn't have to spend?
Whose bright idea was that and who was dumb enough to allow it?.
I believe the banks owe the FDIC some money and ought to pay up since the FDIC is in dire need of such funds.
Damn if we aren't being governed in some very strange ways.