Congressional Report figured out why this all happened. Someone here needs to read it all and report back.
"The crisis was the result of human action and inaction, not of Mother Nature or computer models gone haywire. The captains of finance and the public stewards of our financial system ignored warnings and failed to question, understand, and manage evolving risks within a system essential to the well-being of the American public. Theirs was a big miss, not a stumble. While the business cycle cannot be repealed, a crisis of this magnitude need not have occurred. To paraphrase Shakespeare, the fault lies not in the stars, but in us."
blech. c'mon - we should have bankers/deregulators/politicians in stocks in the village square.
IMO-A historical understanding, and even some blame for the crisis is necessary in D.C. down to individual citizens. But this report sounds dumb. And the 4 republicans agreed it was dumb- my guess is it didn't jibe with their conclusion that the crisis is all Clinton and ACORN's fault.
OTOH, the WSJ reported today how the Treasury's mortgage modification program has seen roughly 800k defaults (after modification) vs. about 500k successful modifications. The program thus far has spent about $840 million, or about $1,700 per successful modification. While it appears that many homeowners are in mortgages that they simply cannot afford, the average cost of successful modifications seems pretty low (ie, a good investment).
They might also like to know that M&I's executives ran one of the most conspicuous dumping sites for toxic financial waste in the country. And that the same executives are about to get very rich, even though TARP rules supposedly don't allow big bonuses for underwater bankers like the leadership at M&I.
These executives didn't just contribute to Scott Walker's campaign. They also helped the governor avoid the press - and his own constituents - by letting him use their bank's underground tunnel, which leads directly from its parking lot into the Capitol Building in Madison. Using it for this purpose may have been a violation of the bank's own Code of Business Ethics.
That tunnel's not just a convenient way to help a political crony. It's also one heck of a metaphor.
The M&I Bank's behavior mirrored that of banks across the country who were rescued by the public, then used their money to lobby against the public interest. M&I executives have gone the extra mile for Scott Walker as he fights to strip employees of their benefits and cut vital services. Walker's goal is to keep taxes low for wealthy Wisconsin residents by cutting services for the middle class -- the same middle class that paid for M&Is bailout and keeps its money in M&I's vault.
Every "toxic loan" represents a household whose life has become a shambles. The executives of Marshall & Ilsley Bank, on the other hand, are doing just fine. Thanks to a a legal workaround discovered by the enterprising folks at M&I, they're using a 2008 contractual provision to write themselves fat checks before taxpayers get their money back.
How fat are those checks? The CEO, Mark Furlong, is getting $18 million. CFO Gregory Smith is getting $5.5 million. Senior Vice President Kenneth Krei will receive the same amount, while Senior Vice Presidents Thomas Ellis and Thomas O'Neill are getting $4.1 million and $5.1 million, respectively, with another $26.7 million being distributed to other M&II executives (many of whom undoubtedly oversaw the writing of toxic loans).
NY Times wrote:The Federal Deposit Insurance Corporation sued the former chief executive of Washington Mutual and two of his top lieutenants, accusing them of reckless lending before the 2008 collapse of what was the nation’s largest savings bank.
The civil lawsuit, seeking to recover $900 million, is the first against a major bank chief executive by the regulator and follows escalating public pressure to hold bankers accountable for actions leading up to the financial crisis.
