Henry Blodget Doesn't Think Banks Did Anything Illegal. Wrong!!!
Henry Blodget, editor of Business Insider, posted that he didn't believe the banks did anything illegal in the housing bubble:
B Henry, you really do believe that the
bankers were not frauders in a criminal sense. That is unfortunate. It
shows a lack of judgement.
The banks were not prosecuted because Tim Geithner forbade it. However, truth is, the bogus Gaussian Copula adopted at Basel 2 in 2000 was a fraud from the beginning. To assume all loans can't go bad at the same time flies in the face of the Japanese experience. Risk management became a fraud. You can't prosecute for central bank collusion in the housing bubble? Every CDO was a fraud. Every CDO sold to investors was a fraud.
The banks were not prosecuted because Tim Geithner forbade it. However, truth is, the bogus Gaussian Copula adopted at Basel 2 in 2000 was a fraud from the beginning. To assume all loans can't go bad at the same time flies in the face of the Japanese experience. Risk management became a fraud. You can't prosecute for central bank collusion in the housing bubble? Every CDO was a fraud. Every CDO sold to investors was a fraud.
Congress deserves a lot of the blame for what happened. As, I am sorry to say, do folks who borrowed money to buy houses they couldn't afford."