This video is a few weeks old, but worth watching. CNN’s Parker-Spitzer’s guest Josh Rosner, who heads the research firm Graham Fisher, presents a good layman’s view of how investment banks, in cahoots with the ratings agencies, intentionally bundled and sold bad mortgages to investors (generally taxpayers, as in pension funds, for example). In fact, the Financial Crisis Inquiry Commission found that about 28% of the loans that were bought by the investment banks with the intention of reselling did not meet the agreed to underwriting standards.
Investors were fooled by the AAA ratings, as the ratings agencies hid behind their disclaimer of not having to verify any information provided to them, and so looked the other way to earn their substantial fees.
This information has been floating around Wall Street, Washington and law enforcement for three years. How many arrests have been made for fraud? Zero. How many indictments made been made for fraud? Zero.
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Such Bull-$hit…. sigh