03-07-2016, 12:11 PM
(03-07-2016, 11:21 AM)michaelsean Wrote: They foisted these crap mortgage packages on their customers as AAA investments.
The banks are not in charge of ratings. The big buyers of these investments were not duped - they are very sophisticated and experienced investors.
To understand how it got to this point, you have to understand the basics of risk models, hedging, VaR and cross-default risk. It's happened before and it will happen again, and no one individual is responsible for the systemic risk that caused the crisis. More hubris and model failure than outright fraud and greed.
Lehman was alllowed to fail - are we going to start throwing people in jail for failed businesses? Or only when they are indirectly responsible for other businesses failing they didn't control? And if you're going to throw them in jail, there are politicians in Washington and at least a few people at the Fed that should go along with them.
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