And that lays bare a shortcoming of the Journal’s story. It’s at base a defense of the SEC and “the Difficulties of Pinning Blame for Soured Deals.” Which is fine if you’re going to explore all the difficulties, including the self-imposed ones.
I mean, seriously. You don’t have to be a cynic to guess that when the feds hire a guy from Deustche Bank who oversaw the folks developing CDOs there—and Deutsche was one of the worst churners of those toxic assets—you’re not going to get very tough enforcement of the folks who churned out toxic assets. It’s sort of like hiring Tom Hagen to look into corruption in the olive oil industry.
For all I know Khuzami may be a fine gent, but he shouldn’t be in that position. And his history is probably worth mentioning in any story exploring the “challenges in chasing fraud.”
If there’s any real justice here, it’s that JPMorgan couldn’t unload the Squared CDO junk fast enough and got stuck with $880 million in losses itself. But it wasn’t for lack of trying:
The SEC also quoted an exhortation from an unnamed J.P. Morgan employee to a sales team, which was told to offload the rapidly deteriorating assets in Squared onto investors.
“We are sooo pregnant with this deal….Let’s schedule the cesarian, please!” the email, with its misspelling, said.
Fortunately by then everybody was wising up to the scam.
It is refreshing to see the truth coming out about these sick, greedy, pathetic banksters. I am in the precious metals business and there crimes have cost so many of my good people, so much money. It is not enough they run the Federal Reserve. It is not enough they profit from food stamps.I am so disappointed in the
entire system. I am not, however giving up the fight. People like you posting the truth truly feels like progress. I have a blog dedicated to the truth. I will not advertise it her, but if you are interested please let me know. I just posted something about these criminals regarding Iran arms. Todd Krejci
#1 Posted by Todd Krejci, CJR on Sat 25 Jun 2011 at 02:54 AM
Ryan now: "You can’t sue the lawyers for offering “good faith” legal advice, and you can’t sue the bankers for following that advice, even though they knew it was incomplete. From now on, just make sure that you don’t write anything on email and that you have lawyers sign off on your documents and you’ll be cool, no matter how badly you’re misleading investors."
Ryan then: "According to Merriam-Webster Dictionary, the definition of “advice” is a “recommendation regarding a decision or course of conduct.” That is, to give advice is to recommend. Treasury Secretary Tim Geithner asked the bureau for advice about the proposed servicer settlement, and Warren and the CFPB did exactly that: they said what they thought the settlement should include. The “detailed framework” cited in Bachus and Moore Capito’s letter was nothing more than a 10-page PowerPoint presentation written by the bureau, laying out its advice. Nothing nefarious there."
http://www.cjr.org/the_audit/elizabeth_warren_is_smeared_an_1.php?page=all&print=true
#2 Posted by padikiller, CJR on Sun 26 Jun 2011 at 01:26 PM