Goldman executives were known as Wall Street's best and brightest and after serving out their time at the company often went into public service. These and other tricks hurt borrowers. Aron and Company, a trading house, was a driver of this shift at Goldman. And in so doing, Wall Street helped propel world financial markets to the brink of collapse. And the firms knew precisely what they were doing. The New York Times's Pulitzer Prize-winning columnist reveals how the financial meltdown emerged from the toxic interplay of Washington, Wall Street, and corrupt mortgage lenders.
. Protesters cut a symbolic Social Security net to represent the effects of cuts to vital services. While Goldman's salespeople were busy bundling and selling as many Fremont loans as they could, executives inside the firm were scurrying to offload mortgages that were still on their books. By midyear, Citigroup, Bear Stearns, and Morgan Stanley had all reported serious declines in their mortgage-backed securities deals. Wall Street firms are in the business of profit, they seemed to like the products they were selling during the housing boom judging by the makeup of their balance sheets once housing moderated, and none of this is wrong so long as they suffer their losses every bit as much as they celebrate their successes.
Now, working with Joshua Rosner, she has trained her expert eye on the mortgage mess that pushed the American economy to the brink. That month, the company noted in a regulatory filing that the California Court of Appeals had ruled against it in a lawsuit that had been brought by the California insurance commissioner. Reckless Endangerment may be the umpteenth book on the crisis, but it sheds much new light on its causes. And, you know, I think that financial institutions are important. And I think you quote some of the staff members — Peter Brimelow, who I remember in particular — challenging this whole notion that there had been racial discrimination in lending practices. There Greece, to every thinker, still very literally lives: can be called up again into life. But the private-label securitization market, the mortgage-backed securities market, really was innovated after that.
In the first case they made money because they could borrow very cheaply due to an implicit government guarantee so they were making the difference between the mortgage rate and the rate at which they borrowed. It didn't hurt that the fees generated by these securities made up for stagnant businesses -- such as investment banking and stock trading -- that were generating only paltry revenues on Wall Street. So, I learned a lot reading this book because it does have some depth. Pulitzer Prize-winning business reporter at the New York Times who has written extensively on how the U. Making loans becomes just printing money. Recognizing that the easy money days were over, the firms knew that continuing down the path of big mortgage profits was going to require a more concerted effort, greater creativity.
On the contrary, the homeownership strategy of 1994 came about as the economy was rebounding from the recession of 1990 and '91 and about to enter a long period of enviable growth. Extremely timely given growing fears about the possibility of another financial crash. More disturbing, it was the result of actions taken by people at the height of power in both the public and the private sectors, people who continue, even now, to hold sway in the corridors of Washington and Wall Street. The rampant corruption in politics and the corporate business world was eye-opening. The result was a political environment in which no one could question the benefits of ever more home loans made to borrowers of ever lower quality. Morgenson certainly has journalistic skills and Rosner appears to know a great deal about U. This proposal was vociferously opposed by the Fannie and Freddie and did not go anywhere, which is what Treasury career staff expected.
Henry Paulson became a fellow at Johns Hopkins. The number of borrowers who were defaulting on loans within months of receiving them was rocketing; this posed severe consequences to both lenders and their enablers. There was also at least one other deal that was tax motivated that Treasury blocked in the early 1980s, though I have forgotten the details. Joshua Rosner is a managing director at the independent research consultancy Graham Fisher and Co. The agencies did not see how toxic the loans in them were; in fact the largest ratings firms didn't do loan-level analysis. Still, Clinton's homeownership plan differed from its predecessors. But Freddie Mac did not have to be confrontational as long as Fannie Mae was willing to play the heavy.
In Reckless Endangerment, Gretchen Morgenson exposes how the watchdogs who were supposed to protect the country from financial harm were actually complicit in the actions that finally blew up the American economy. In a world where capital moves at the click of a mouse, the last thing governments should be doing is subsidizing a purchase that renders those who take advantage of it less mobile in pursuit of work. Indeed, if banks were unregulated, and as such free to succeed and fail, investors and financial institution creditors would make sure that none grew too large given the losses they would suffer in a free market for any bank committing ghastly errors. Then there is the maddening aftermath — watching hundreds of billions of taxpayer dollars get funneled to rescue some of the very institutions that drove the country into the ditch. Prior to joining the Times in 1998, she worked as a broker at Dean Witter in the 1980s, and as a reporter at Forbes, Worth, and Money magazines. Timothy Geithner remains Treasury secretary.
Putting it more simply, even if regulators could regulate in such a way that would erase business errors, their existence would still be an unfortunate one for failure always and everywhere teaching us how to succeed. Blankenship We're doing God's work of Sachs, and Dimon of Morgan continue at the helm, earning record salaries and bonuses. The research is thorough, but not dry. Reckless opens with a quote from a speech President Bill Clinton gave in 1994. And that relationship is really part of the ebb and flow of the private versus the government-sponsored. If sewage lowered capital requirements these guys would be in the porta john business tomorrow morning.