Mood(y) Swings

This is about the economy - not sure if everyone realizes how close to plunging over the cliff we actually came. There's a lot of anger towards Wall Street, much of it justifiable in my opinion (although the scorpion's nature is to sting - the tiger can't change it's stripes - and Wall Street feeds on markets, just the way it's wired).

There are a lot of other stakeholders in creating this crisis but there are two in particular that I feel have emerged relatively unscathed given their culpability. First are the politicians, and I'm not talking about the lack of regulation...but this disgusting quid-pro-quo between politicians and Fannie Mae / Freddie Mac - whenever government and business intersect, look out!!! I fundamentally resent the revolving door between these quasi-private institutions and politicians and the links between the two. So bottom line, in my opinion, politicians used our taxpayer money to underwrite non-creditworthy mortgages, with the objectives of:

- helping people who couldn't otherwise afford it to purchase home - very noble goal (although in my cynical opinion it was done primarily to buy votes) with unintended consequences namely the triggering of the sub-prime meltdown which triggered the economic collapse
- creating a pool of blank check funds - Fannie / Freddie et al were expected to be incredibly generous political donors
- arranging a soft, cushy landing for people who were hand-picked to ensure that the pig would continue to get well fed, in other words continuation of the "win-win" political / mortgage business (but "lose-lose" for taxpayers)

Anyway forgive my diatribe, just nobody's really called them out and I'm a bit down on politicians...but the other massive culprit is the rating agencies. These f'ers were paid a lot of money to give "unbiased" ratings - but lo and behold Moody's, S&P et al were on the lam! So investors (who also have some culpability but that's for another time) who were relying on "independent" risk assessments of incredibly complicated securities were out and out lied to!

So someone from within Moody's has blown the whistle - and said that the old practices continue! And now the ex-head of compliance for Moody's is testifying...

Stay posted