I watched the hearings, these people are unbelievable arrogant. When they call themselves "market makers" what they are talking about is the derivatives market. This market didn't even really exist until the 90's. We managed to get along just fine without it.
It's a market for the banks and no one else. And they managed to burn the house down with their greed and recklessness. $600 Trillion? Who the hell needs all that funky paper floating around?
I can live with business's need to hedge against risk. But banks should be limited to their own level of exposure to that risk, not just betting the markets. Especially when they are the ones that created that market, and the only ones that understand the risks.
Goldman saw the crash coming, and bet about 60% of their value shorting real estate derivatives through credit default swaps. They made a killing, well beyond their level of exposure. Of course it didn't hurt having a former Goldman CEO as Treasury Secretary when he paid off those CDS's from the TARP money.
They were betting that the very derivatives they were pushing to investors were going to fail. In some cases they were designed to fail. They bundled sub-prime and alt-A mortgages into AAA rated paper by leaning on the CRA's, and then had the gall to claim that the investors that bought this paper "wanted" that level of risk.
If it was up to me, there would be heads on pikes all the way down Wall Street.
It's a market for the banks and no one else. And they managed to burn the house down with their greed and recklessness. $600 Trillion? Who the hell needs all that funky paper floating around?
I can live with business's need to hedge against risk. But banks should be limited to their own level of exposure to that risk, not just betting the markets. Especially when they are the ones that created that market, and the only ones that understand the risks.
Goldman saw the crash coming, and bet about 60% of their value shorting real estate derivatives through credit default swaps. They made a killing, well beyond their level of exposure. Of course it didn't hurt having a former Goldman CEO as Treasury Secretary when he paid off those CDS's from the TARP money.
They were betting that the very derivatives they were pushing to investors were going to fail. In some cases they were designed to fail. They bundled sub-prime and alt-A mortgages into AAA rated paper by leaning on the CRA's, and then had the gall to claim that the investors that bought this paper "wanted" that level of risk.
If it was up to me, there would be heads on pikes all the way down Wall Street.
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