Tweet
after spending just about every free moment (and then some, not so free) reading just about every word here on iTulip, how _any_ of the clowns in DC could say "nobody saw it coming" would seem to require every one of em, take a "suspension of disbelief" pill, maybe 5 or 6 of em, eh? and still, NOBODY GOES TO JAIL, THEY ALL GET TO KEEP ALL THE MONEY, while We The People get... what?
this is beauty:
Head of Crisis-Panel Says Warning Signs Weren't Heeded
By MAYA JACKSON RANDALL
WASHINGTON—A blue-ribbon panel investigating the 2008 financial crisis blamed failures in financial regulation, flaws in corporate governance and excessive borrowing as key elements leading to the meltdown, Financial Crisis Inquiry Commission Chairman Phil Angelides said Thursday.
"Despite the expressed view of many on Wall Street and in Washington that the crisis could not have been foreseen or avoided, there were warning signs," said Mr. Angelides. "The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done. If we accept this notion, it will happen again."
More
View Document
Journal Community
The commission's final report, which the panel sent off to President Barack Obama Thursday morning, found the crisis was caused by widespread failures in financial regulation such as the Federal Reserve's failure to stem the tide of toxic mortgages over the past decade.
Corporate governance issues and "an explosive mix of excessive borrowing" contributed to the crisis as well, the report finds. It also points to governance breakdowns at firms such as American International Group Inc., which made giant bets on the mortgage market, and Fannie Mae.
In addition, the 500-plus page report says key policymakers simply weren't prepared for the meltdown and there were "systemic breaches in accountability and ethics at all levels."
View Full Image
Getty Images Financial Crisis Inquiry Commission Chairman Phil Angelides
The report cites burgeoning mortgage fraud around the country in the years running up to the meltdown and notes that major financial institutions packaged loans into securities that they had reason to suspect didn't meet their standards.
The failures were widespread, it says, even blaming the public.
"As a nation, we must also accept responsibility for what we permitted to occur," it says. Still, it says, "we do place special responsibility with the public leaders charged with protecting our financial system. No one said, 'No.' "
The 10-member commission reviewed millions of pages of documents and conducted interviews with more than 700 witnesses. The panel held 19 days of public hearings in communities across the country.
The commission was created in May 2009 to investigate the causes of the financial and economic crisis. Congressional Democratic leaders appointed six members of the panel. The Republican leadership picked four.
The report's scope is expansive but partisan divisions that emerged during its drafting could detract from its long-term impact on policy. Republican members of the panel dissented, saying they couldn't support the majority's conclusions.
"Instead of pursuing a thorough study, the commission's majority used its extensive statutory investigative authority to seek only the facts that supported its initial assumptions—that the crisis was caused by 'deregulation' or lax regulation, greed and recklessness on Wall Street, predatory lending in the mortgage market, unregulated derivatives and a financial system addicted to excessive risk-taking," Peter Wallison, a Republican-appointed commission member who is also a fellow at the American Enterprise Institute, wrote in his dissent.
"The commission did not seriously investigate any other cause, and did not effectively connect the factors."
In addition, Republican members Bill Thomas, Keith Hennessey and Douglas Holtz-Eakin said the commission's explanation of the crisis was too broad. They criticized it for cataloging every possible shortcoming.
Mr. Thomas is the panel's Republican vice chairman and a former Republican congressman from California. Mr. Hennessey served as a top economic adviser to President George W. Bush during the 2008 financial crisis and Mr. Holtz-Eakin is a leading Republican economist and former head of the Congressional Budget Office.
The three commissioners narrowed the causes of the crisis down to 10, faulting, among other things: credit and housing bubbles; nontraditional mortgages; failures in credit-rating and securitization; financial firms' massive housing risk; firms holding too little capital; the ease at which losses spread through the system; bad bets on housing; and market shock and panic.
"When everything is important, nothing is," they said in their dissent.
It's unclear how the report's findings will shape financial regulations.
Congress passed a broad rewrite of federal banking laws last year. Lawmakers are expected to consider overhauling the nation's housing-finance system, particularly the government-chartered mortgage giants Fannie Mae and Freddie Mac, an area in which the commission was particularly divided.
Write to Maya Jackson Randall at Maya.Jackson-Randall@dowjones.com
this is beauty:
- JANUARY 27, 2011, 5:37 P.M. ET
Head of Crisis-Panel Says Warning Signs Weren't Heeded
By MAYA JACKSON RANDALL
WASHINGTON—A blue-ribbon panel investigating the 2008 financial crisis blamed failures in financial regulation, flaws in corporate governance and excessive borrowing as key elements leading to the meltdown, Financial Crisis Inquiry Commission Chairman Phil Angelides said Thursday.
"Despite the expressed view of many on Wall Street and in Washington that the crisis could not have been foreseen or avoided, there were warning signs," said Mr. Angelides. "The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done. If we accept this notion, it will happen again."
More
View Document
- Document: FCIC Report
- Deal Journal: Portent of Doom on Housing Market Collapse
- Banks Feel Regulatory Heat
Journal Community
The commission's final report, which the panel sent off to President Barack Obama Thursday morning, found the crisis was caused by widespread failures in financial regulation such as the Federal Reserve's failure to stem the tide of toxic mortgages over the past decade.
Corporate governance issues and "an explosive mix of excessive borrowing" contributed to the crisis as well, the report finds. It also points to governance breakdowns at firms such as American International Group Inc., which made giant bets on the mortgage market, and Fannie Mae.
In addition, the 500-plus page report says key policymakers simply weren't prepared for the meltdown and there were "systemic breaches in accountability and ethics at all levels."
View Full Image
Getty Images Financial Crisis Inquiry Commission Chairman Phil Angelides
The report cites burgeoning mortgage fraud around the country in the years running up to the meltdown and notes that major financial institutions packaged loans into securities that they had reason to suspect didn't meet their standards.
The failures were widespread, it says, even blaming the public.
"As a nation, we must also accept responsibility for what we permitted to occur," it says. Still, it says, "we do place special responsibility with the public leaders charged with protecting our financial system. No one said, 'No.' "
The 10-member commission reviewed millions of pages of documents and conducted interviews with more than 700 witnesses. The panel held 19 days of public hearings in communities across the country.
The commission was created in May 2009 to investigate the causes of the financial and economic crisis. Congressional Democratic leaders appointed six members of the panel. The Republican leadership picked four.
The report's scope is expansive but partisan divisions that emerged during its drafting could detract from its long-term impact on policy. Republican members of the panel dissented, saying they couldn't support the majority's conclusions.
"Instead of pursuing a thorough study, the commission's majority used its extensive statutory investigative authority to seek only the facts that supported its initial assumptions—that the crisis was caused by 'deregulation' or lax regulation, greed and recklessness on Wall Street, predatory lending in the mortgage market, unregulated derivatives and a financial system addicted to excessive risk-taking," Peter Wallison, a Republican-appointed commission member who is also a fellow at the American Enterprise Institute, wrote in his dissent.
"The commission did not seriously investigate any other cause, and did not effectively connect the factors."
In addition, Republican members Bill Thomas, Keith Hennessey and Douglas Holtz-Eakin said the commission's explanation of the crisis was too broad. They criticized it for cataloging every possible shortcoming.
Mr. Thomas is the panel's Republican vice chairman and a former Republican congressman from California. Mr. Hennessey served as a top economic adviser to President George W. Bush during the 2008 financial crisis and Mr. Holtz-Eakin is a leading Republican economist and former head of the Congressional Budget Office.
The three commissioners narrowed the causes of the crisis down to 10, faulting, among other things: credit and housing bubbles; nontraditional mortgages; failures in credit-rating and securitization; financial firms' massive housing risk; firms holding too little capital; the ease at which losses spread through the system; bad bets on housing; and market shock and panic.
"When everything is important, nothing is," they said in their dissent.
It's unclear how the report's findings will shape financial regulations.
Congress passed a broad rewrite of federal banking laws last year. Lawmakers are expected to consider overhauling the nation's housing-finance system, particularly the government-chartered mortgage giants Fannie Mae and Freddie Mac, an area in which the commission was particularly divided.
Write to Maya Jackson Randall at Maya.Jackson-Randall@dowjones.com