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You are here: Home / Politics / Domestic Politics / What About Them

What About Them

by John Cole|  February 3, 20098:38 am| 64 Comments

This post is in: Domestic Politics

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Interesting snippet from a heart-wrenching tale about the stigmatized Wall Street wizards:

Of course, mistakes were made on Wall Street, says Emanuel Pleitez, a 26-year-old former Goldman Sachs employee who resigned from his job a few months ago to run for Congress in his hometown, Los Angeles. But to a great extent, he says, those mistakes were born of misplaced trust.

“Look, you can talk about collateralized debt obligations all day long,” he said, referring to a type of asset-backed security that has turned famously toxic. “But there were ratings agencies that were supposed to tell us how risky these securities were. We essentially closed our eyes and said, ‘O.K., you say this is rated triple-A, fine, I believe you.’ ” In hindsight, he said, “Everyone should have been more skeptical.”

I know I have brought this up several times, but putting aside the irresponsibility of just closing their eyes and saying “O.K.,” the folks who seem to have gotten off scott free are the ratings agencies. What they did was akin to the FDA not only removing the warning from cigarette packs, but adding a little statement that “Cigarettes can enhance health if smoked in quantities of higher than four packs a day.”

These guys should face hell, and all the anger seems directed at the Merrill’s and Lehmans and Goldman Sachs’s of the world.

And, in case you were wondering, because I was, Pleitez is apparently a Democrat and served on the Obama transition team.

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64Comments

  1. 1.

    Michael D.

    February 3, 2009 at 8:40 am

    Securities pay handsomely to be included in those ratings. So, you know, not like there was a conflict of interest or anything…

  2. 2.

    dmsilev

    February 3, 2009 at 8:41 am

    The root of the problem was that the rating agencies were paid by the people issuing the bonds/securities/whatever, and were paid more (and given more repeat business) for higher ratings. Basic human nature (i.e. greed) took care of the rest.

    It seems to me that eliminating this basic conflict of interest is a necessary condition for prevent a recurrence of this mess. How to fix, I don’t know.

    -dms

  3. 3.

    SGEW

    February 3, 2009 at 8:49 am

    "Everyone should have been more skeptical arrested."

    fixt

  4. 4.

    Rick Taylor

    February 3, 2009 at 8:52 am

    Enron should have been a big clue that the rating’s agencies were broken.

  5. 5.

    dewberry

    February 3, 2009 at 8:54 am

    The thing is, if you look at it that most individuals acted in a way that maximized the benefit to them. Because in fact, there were a bucketload of incentives for them to act in exactly the way they acted.

    And the bonuses that they got last year when their companies were losing money shows exactly that.

  6. 6.

    dr. bloor

    February 3, 2009 at 8:57 am

    Of course, mistakes were made on Wall Street, says Emanuel Pleitez, a 26-year-old former Goldman Sachs employee

    "Mistakes were made." Ah, yes, when the going gets tough, the tough get Nixonian.

  7. 7.

    Punchy

    February 3, 2009 at 8:59 am

    wasn’t there fidiciary incentive for the ratings companies to rate them as high as possible? as in, the higher the rating, the more purchased, ergo more money for the ratings companies? man, that conflict of interest is about as brazen as they get.

  8. 8.

    Rick Taylor

    February 3, 2009 at 9:02 am

    “If you just take your base home, the question becomes, why not just work at a nonprofit from 8 to 4 instead of a bank where you’re expected to work weekends and every night till 10 or 11?” she said.

    The article makes a good point towards the end. I don’t want our financial sector to be run by people working ridiculous hours, all for chasing huge six figure salaries. That’s a recipe for disaster. No wonder we’re in the shape we’re in now.

  9. 9.

    Napoleon

    February 3, 2009 at 9:03 am

    @Punchy:

    No, the incentive was more indirect and was along the lines of "You keep giving us low ratings which cost us money, we will get our ratings somewhere else."

    I doubt anyone ever actually said that, but everyone would have realized that is the state of affairs and acted accordingly. Very few people want to be right, but unemployed.

  10. 10.

    Rick Taylor

    February 3, 2009 at 9:06 am

    Just add, in general I don’t care for demonizing anyone. We have a system in place that rewards short term thinking and insane risk taking. The whole point isn’t to find virtuous people to run our financial institutions; the point is to create a framework that works, even given all the negative aspects of human nature.

  11. 11.

    SGEW

    February 3, 2009 at 9:09 am

    Very few people want to be right, but unemployed.

    "It is very difficult to convince someone of something if his paycheck depends on not believing it."

    – Attributed to H.L. Mencken

  12. 12.

    Napoleon

    February 3, 2009 at 9:14 am

    @Rick Taylor:

    Bingo, That is why the whole conservative jihad against government is on its face ridiculous, and anyone with 2 braincells should have stopped voting for them during Reagan’s Presidency. If the Republicans ran a professional sport like they ran government they would basically nueter the refs and fast forward a year or 2 later and your sport is Rollerball.

    Business do not exist to provide jobs, educate people, spread the wealth around, protect the environment, or make our country a better place. It is there only to make money, which is OK, you just have to understand what limited benefit that is to the country and its people.

  13. 13.

    RWB

    February 3, 2009 at 9:15 am

    The conflict of interest that everyone is talking about is supposed to be mitigated by the fact that no one will use the agencies’ ratings if they regularly get it wrong. To me this is what is baloney about the complaints about the ratings agencies. Of course the ratings agencies are guilty, but they are only accessories to the main crime. Certainly there were some suckers who bought CDOs based on the Aaa ratings, but many financial firms that held these securities knew full well that they were far more risky than thier ratings implied. But by holding Aaa rated securities, they could get around rules that required their portfolios to be within a certain tolerable range of risk (lots of firms are enjoined against holding risky debt or securites, as well as pension funds, etc.). In essence, the sellers of the securities and the buyers knew that they were dealing with toxic waste and conspired to have the ratings agencies relabel toxic waste as "fluffy harmless bunnies" to make everything look hunky dory (and maximze returns).

  14. 14.

    Incertus

    February 3, 2009 at 9:20 am

    @dr. bloor: Absolutely–I love the passive voice. They also find someone else to blame: witness David Brooks today. It’s those damned upper middle class strivers who are fucking it all up for the rich now. Because they’re jealous. Or something.

  15. 15.

    kay

    February 3, 2009 at 9:21 am

    They’re still really arrogant, in my opinion.

    To some longtimers in the industry, this reordering of priorities is overdue. Robert J. Birnbaum, the former president of the New York Stock Exchange, sees an upside to Wall Street’s diminished reputation.

    “It’s taken a hit, but so what?” he said. “We don’t need all the bright people going to Wall Street, chasing money. There’s a lot of things bright people can do. Like find a cure for cancer.”

    Two assumptions: they’re the Best and the Brightest, and the only reason they aren’t out curing cancer is because they’re busy, or have different priorities. This assumption has to go. In what way have they shown they are the best and the brightest? That BUT FOR the profit motive, they would be great at running a non-profit, or great at curing cancer. I’m not getting that part.

  16. 16.

    PK

    February 3, 2009 at 9:23 am

    There is a question which has always bothered me about the financial crisis. Why so much faith in wall street? Why did all these politicians think that any of these guys could be trusted if regulation and oversight was removed. Because they wear dress clothes, have college degrees and talk nice?
    On the one hand they will imprison a person for life for stealing pizza for the third time, but for the guy in the suit-no rules and I’ll throw in my wife for free. And I use the word guy because as far as I can tell the people who have bled the country dry are almost all male.

  17. 17.

    NonyNony

    February 3, 2009 at 9:23 am

    @dmsilev:

    It seems to me that eliminating this basic conflict of interest is a necessary condition for prevent a recurrence of this mess. How to fix, I don’t know.

    You do what you should always do when "the profit motive" fails to provide the right thing in the market – set up some kind of government-sponsored entity to do it on a not-for-profit basis with government oversight. The FDA is a model to consider, as would be a not-for-profit corporation setup to do nothing but rate securities.

    This stuff isn’t rocket science – we know how to do this stuff and we’ve done it for years. Just because we’ve gone through a period where the "common wisdom" was that the government was "The Devil" and anything worth doing could be done by the "Free Market" doesn’t mean that the common wisdom was particularly right.

  18. 18.

    Bootlegger

    February 3, 2009 at 9:28 am

    My brother-in-law is a "rater", he jumped from company to company for awhile, almost like a middle-reliever being traded from one contender to the next. He got out of that rat race when he started having kids and began doing rating work for non-profits. He still won’t talk about the shit he witnessed, he’ll only shake his head and the man looks 10 years older than he actually is.

  19. 19.

    Libby

    February 3, 2009 at 9:31 am

    Good point John. The ratings agencies have been the overlooked contributor to this mess. I think I’ve seen all of one article that even mentioned them in all these months.

  20. 20.

    Punchy

    February 3, 2009 at 9:32 am

    OT:

    Ricardo Montalban may be pushing up daisies, and Tatoo has long since bought the farm, but apparently Scott Boras is still residing on Fantasy Island.

  21. 21.

    bayville

    February 3, 2009 at 9:34 am

    Some of the firms appear to have turned into nothing more than sweat shops:

    At the San Francisco branch of Goldman Sachs, the days of free soy milk and Diet Cokes are over, and one day, the water cooler was wheeled right out of the office. “Word went around pretty quickly,” says Mr. Pleitez. “Bring your own water.”

    Attica… Attica… Attica.

  22. 22.

    TheFountainHead

    February 3, 2009 at 9:38 am

    Two assumptions: they’re the Best and the Brightest, and the only reason they aren’t out curing cancer is because they’re busy, or have different priorities. This assumption has to go. In what way have they shown they are the best and the brightest? That BUT FOR the profit motive, they would be great at running a non-profit, or great at curing cancer. I’m not getting that part.

    This is the part that kills me. Very few of the "Best and the Brightest" end up in finance or politics, because the amount of corruption and distasteful human interaction these fields breed outweighs the prospect of making tons of money/power for yourself. Most of the "Best and the Brightest" I’ve ever encountered actually shy away from those things intentionally.

  23. 23.

    kay

    February 3, 2009 at 9:48 am

    @TheFountainHead:

    I’m sure some of them are very bright. This is a particular beef of mine. The idiocy that says running a non-profit or curing cancer or any one of a number of careers are really within the reach of anyone, and CERTAINLY to the masters of finance.
    It’s the same sort of thinking that leads to "I went to school! I’d be a great teacher!". Or Joe the Plumber as war correspondent. They pegged their own "excellence" to bonuses. We found out this year that that’s a crock. What makes them assume they can manage a non-profit? They couldn’t manage their own companies.
    How about showing a little respect for those who do really difficult jobs for less pay?

  24. 24.

    The Other Steve

    February 3, 2009 at 9:52 am

    This attitude was all too common.

    Nobody could have anticipated property values would decline.

    Nobody could have anticipated people would stop paying back loans when they lost jobs.

    If these loans hadn’t defaulted, these bonds would still be AAA.

    The last straw for me was 2007 when they announced they were not paying bonuses to employees, except for the sales staff. All I could think of "Wasn’t the sales the staff the guys who bought this shit?" In retrospect for me, the bonus never made up for the stress of putting up with stupid people every day.

  25. 25.

    Napoleon

    February 3, 2009 at 9:52 am

    @Punchy:

    Got to love Manny. What makes a story like that even funnier is when he was hear in Cleveland there was a story in a local paper at some point about how Manny was just shoving his paychecks in his glove compartment and not even bothering to cash them.

  26. 26.

    KCinDC

    February 3, 2009 at 9:53 am

    “If you just take your base home, the question becomes, why not just work at a nonprofit from 8 to 4 instead of a bank where you’re expected to work weekends and every night till 10 or 11?” she said.

    What nonprofits pay salaries equal to the base pay of Wall Street folks? I’m sorry, but I just can’t cry about the possibility of people on Wall Street losing bonuses, even if the word "bonus" is misleading, when plenty of people throughout society are taking pay cuts or losing their jobs completely.

  27. 27.

    Montysano (All Hail Marx & Lennon)

    February 3, 2009 at 9:54 am

    @Napoleon:

    If the Republicans ran a professional sport like they ran government they would basically nueter the refs and fast forward a year or 2 later and your sport is Rollerball CalvinBall.

    Yur welcome.

  28. 28.

    Wag

    February 3, 2009 at 9:56 am

    "If the Republicans ran a professional sport like they ran government they would basically nueter the refs and fast forward a year or 2 later and your sport is Rollerball.">

    Isn’t that where we are right now?

  29. 29.

    NJDave

    February 3, 2009 at 9:56 am

    @Libby: You’ve not been paying attention. 60 Minutes, Congressional hearings, NYTimes front page articles, etc., etc.

  30. 30.

    Montysano (All Hail Marx & Lennon)

    February 3, 2009 at 9:58 am

    Does anyone know why a strikeout command shows in preview, but not when published?

    The above should have been Rollerball Calvinball.

  31. 31.

    gnomedad

    February 3, 2009 at 9:59 am

    @kay:

    It’s the same sort of thinking that leads to "I went to school! I’d be a great teacher!". Or Joe the Plumber as war correspondent.

    Yup. Along these lines, I have yet to see those who bloviate about the "liberal media" make any case the conservatives are systematically excluded. More like they are uninterested in actually learning journalism and climbing the ladder at low pay.

  32. 32.

    Zifnab

    February 3, 2009 at 10:00 am

    Two assumptions: they’re the Best and the Brightest, and the only reason they aren’t out curing cancer is because they’re busy, or have different priorities. This assumption has to go. In what way have they shown they are the best and the brightest? That BUT FOR the profit motive, they would be great at running a non-profit, or great at curing cancer. I’m not getting that part.

    Take innocuous an 19-year-old high school graduate living in the suburb of a major metropolitan city. He has full intention of going on to college and perhaps graduate school, and he wants to make a name for himself (or herself, just bare with my laziness). This 19-year-old has a number of options in front of him to make it big. He can go for a medical degree, a law degree, or an administrative position in government, or maybe he’ll start a private business. Any of these will score him a six figure salary fairly quickly. But if he gets into a major Wall Street firm (or even a minor one) he can make a billion dollars before he’s thirty.

    Ideally, this kid – seeing the epic clusterfuck on Wall Street – ops for something more socially productive.

    And this is silly, because we’re looking at a recession – maybe, at the worst, a depression – but we’re not looking at the end of market capitalism. Wall Street will still be there six years from now andif the 30s or the 60s or the 80s or the ’00s are any indication we’ll be right back to the same games by the time you’ve graduated.

  33. 33.

    Walker

    February 3, 2009 at 10:06 am

    Best and the brightest, eh? And this is supposed to be a reasoned argument:

    “They just see Wall Street as overpaid and they don’t have a very clear idea of what it does. I try to explain that there’s this intimate connection between Main Street and Wall Street, that banks were created to provide liquidity for small businesses, so they can expand.”

    In what way does the second rebut the first? Just because you provide a valuable service does not mean that you are not being overpaid for that service. These people have no sense of the value of their work.

  34. 34.

    kay

    February 3, 2009 at 10:08 am

    @gnomedad:

    They chose to couple their own "excellence" to their ability to turn a profit. Not only that, they extended that measure to the rest of the world. They then didn’t turn a profit. Now it isn’t a matter of excellence, it’s a matter of "priorities".
    Yeah, okay.
    I didn’t buy the first premise. I don’t agree that excellence = making vast piles of cash. They may or may not be good managers of non-profits, or scientists, or teachers, or any of those lesser careers. Because they were highly paid clearly isn’t proof positive of much of anything. We learned that.

  35. 35.

    linda

    February 3, 2009 at 10:09 am

    the best and the brightest? … hardly … the greediest and the most amoral … definitely:

    “Let’s hope we are all wealthy and retired by the time this house of cards falters,” said in an email one analyst to a colleague at his rating agency.

    http://www.hedgeworld.com/blog/?p=115

  36. 36.

    Zifnab

    February 3, 2009 at 10:11 am

    @bayville:

    Some of the firms appear to have turned into nothing more than sweat shops:

    You lose a couple billion dollars in bad paper assets and you think you’re going to make it back by getting rid of water coolers?

    How the fuck are these people still in business?! But everybody back up. John Thain needs a $1.2 million office overhaul.

  37. 37.

    The Other Steve

    February 3, 2009 at 10:12 am

    What nonprofits pay salaries equal to the base pay of Wall Street folks?

    Some of these people… They were getting paid $30k salaries, and making $120k bonuses.

    Granted, in our mortgage business, it was more like $30k salary, $10 bonus. Which was decent, but no so extreme.

    The whole industry was fucked up. It deserved to fail.

  38. 38.

    Punchy

    February 3, 2009 at 10:14 am

    @Napoleon: That article just slays me. The Dodgers offer him a one-year smokin hot deal, saying, "well, next year you can try this shit again, and in a better economy, maybe you’ll get it", and he STILL SAYS NO. The chutzpah is breathtaking. I’m now openly rooting for this fuck to go unemployed this year (I know, wont happen).

    And Cole won’t let me print what I am openly rooting to have happen to Boras.

  39. 39.

    lethargytartare

    February 3, 2009 at 10:15 am

    @dr. bloor:

    "Mistakes were made." Ah, yes, when the going gets tough, the tough get Nixonian.

    …or Groeningian

  40. 40.

    burnspbesq

    February 3, 2009 at 10:16 am

    @Punchy:

    I’m all for sending Boras to The Hague to be tried for crimes against humanity.

  41. 41.

    Steeplejack

    February 3, 2009 at 10:20 am

    “But there were ratings agencies that were supposed to tell us how risky these securities were. We essentially closed our eyes and said, ‘O.K., you say this is rated triple-A, fine, I believe you.’” In hindsight, he said, “Everyone should have been more skeptical.”

    Anyone working at Goldman Sachs above the level of mailroom clerk should have known probably did know that the ratings were worthless.

  42. 42.

    les

    February 3, 2009 at 10:20 am

    Bill Moyers did a show on the ratings companies–spent a lot of time with the yahoo who headed the department (at one of S&P or Moody’s) created to rate the new shit that’s now gone where you would expect shit to go. Essentially he said, "we just made it up." At $250K a rating, doing hundreds of issues. While other folks in these companies were refusing to support the ratings and warning of the problems, his department just kept growing and spitting out shit–which everyone involved knew was shit. But it’s ok–now he feels bad.

  43. 43.

    Grumpy Code Monkey

    February 3, 2009 at 10:21 am

    @Montysano (All Hail Marx & Lennon):

    Preview lies. It’s a feature.

    If the Republicans ran a professional sport like they ran government they would basically nueter the refs and fast forward a year or 2 later and your sport is Rollerball.

    Which one, the original (which rocked) or the new one (which … didn’t)?

  44. 44.

    burnspbesq

    February 3, 2009 at 10:23 am

    @Walker:

    Sorry, but your subjective value judgments about what certain things "are worth" are interesting but irrelevant. If my employer is willing to pay me what they pay me, and I am willing to take it, then by definition I am worth that much. I may think I’m worth more, but if I put my resume out and no one offers me more, then I am wrong in that belief, and that is the end of the conversation. You may think I’m worth less, but my employer is putting the shareholders’ money where its mouth is, and you’re just flapping your gums.

  45. 45.

    Robin G.

    February 3, 2009 at 10:24 am

    All the Best and Brightest I’ve met (former classmates about to graduate from grueling medical and PhD programs) looked at the Wall Street possibilities, laughed their asses off, and went on their ways.

    Twenty years ago, sure. But anyone paying attention in the last five years could see which way the wind was blowing for the economy.

  46. 46.

    Face

    February 3, 2009 at 10:25 am

    And Cole won’t let me print what I am openly rooting to have happen to Boras.

    Watch Punchy change this tune when Scotty delivers ManRam to his beloved Cubs.

  47. 47.

    Bootlegger

    February 3, 2009 at 10:36 am

    @burnspbesq:

    If my employer is willing to pay me what they pay me, and I am willing to take it, then by definition I am worth that much.

    Ever heard of a tautology? As in, logical fallacy. Didn’t think so.

  48. 48.

    Brick Oven Bill

    February 3, 2009 at 10:37 am

    Credit Agencies

    The credit rating person, the bond council, and the developer walked around together during the run up to the boom. They are supposed to act independently.

    The credit rating agencies also judge the worth publically traded companies. Wikipedia, for whatever it is worth, says that Warren Buffet owns a large part of Moodys. This is one reason why I own no stock.

    Good for Pleitez. Perhaps he will look into the political parties next. I would vote for Pleitez.

  49. 49.

    Napoleon

    February 3, 2009 at 10:44 am

    The chutzpah is breathtaking.

    If you were referring to Boros (and it appeared to me you were not) I would agree, but I think Manny operates in a way unlike any normal human being so I am not sure that concept can even apply to him.

  50. 50.

    Bootlegger

    February 3, 2009 at 10:47 am

    @Brick Oven Bill:

    The credit rating person, the bond council, and the developer walked around together during the run up to the boom

    I’ll bet it was an elephant walk, followed by a circle jerk.

  51. 51.

    Punchy

    February 3, 2009 at 10:51 am

    @Face: Natch….0.309 BA, 42 HR and 135 RBIs is a powerful grudge eraser.

  52. 52.

    D-Chance.

    February 3, 2009 at 11:08 am

    Did Pleitez pay his taxes? If so, he may be the only Obamamerica team member who did…

  53. 53.

    OriGuy

    February 3, 2009 at 11:09 am

    At the San Francisco branch of Goldman Sachs, …. “Bring your own water.”

    San Francisco tap water is some of the best in the world. It comes straight from Hetch Hetchy in Yosemite. There’s not reason fro anyone with access to tap water to drink from a plastic bottle.

  54. 54.

    burnspbesq

    February 3, 2009 at 11:09 am

    @Bootlegger:

    I know what a tautology is, and when you show me one I will applaud.

    Ever seen the intersection of a supply curve and a demand curve? Didn’t think so.

  55. 55.

    liberal

    February 3, 2009 at 11:24 am

    @burnspbesq:

    Sorry, but your subjective value judgments about what certain things "are worth" are interesting but irrelevant.

    The issue isn’t supply and demand for labor on Wall St. The problem, rather, is the market for the services provided by Wall St (which is where the $$ for the labor of highly-paid Wall St employees comes from).

    AFAICT that market is far overpriced and hardly competitive.

    For example, the fact that fees are charged on a percent basis is bizarre and irrational. Imagine if a grocery store checkout clerk got 3% of every sale as her "fee".

  56. 56.

    joe from Lowell

    February 3, 2009 at 11:55 am

    I haven’t seen any libertarian essays about how awesome it would be to replace the USDA and local Boards of Health inspections system with private inspectors lately.

    Wonder why?

  57. 57.

    Bootlegger

    February 3, 2009 at 12:11 pm

    @burnspbesq: I have seen the theoretical intersection of the demand and supply curve. You should check out all the research on real-life market situations that don’t fit the curves.

    Saying "I’m worth this much, because that’s what I’m paid. I’m paid this much much because that’s what I’m worth" is a freshman example of a tautology.

  58. 58.

    Sam Simple

    February 3, 2009 at 12:35 pm

    Oh, we wouldn’t want that big bad government telling those fucking geniuses at the rating agencies what to do now, would we?? That would be, like, so anti-free market and so against the wonderful glories of capitalism (Substitute your own bullshit, dumbass conservative argument here).

  59. 59.

    TenguPhule

    February 3, 2009 at 1:11 pm

    "Everyone should have been more skeptical arrested. dragged out and shot"

    Fixed for great justice.

  60. 60.

    TenguPhule

    February 3, 2009 at 1:21 pm

    What nonprofits pay salaries equal to the base pay of Wall Street folks?

    Upper management. For HMSA, Red Cross, etc….

    The shit always floats to the top.

  61. 61.

    Al Swearengen

    February 3, 2009 at 5:17 pm

    Good God, the absolute lack of self-awareness by the poor, poor babies.

    They are only "The Best and the Brightest" when it comes to rationalizing the obscene money paid to them to do nothing but shuffle paper/bits around. But they sure are fucking idiots when it comes to realizing that their sense of wounded entitlement isn’t serving them well at this juncture. Seriously, still-employed Wall Street types need to shut the fuck up and be glad they still have a job.

    A commentator on BBC World last week had a good point–the "Too big to fail" institutions need to be broken up. That will protect the system from what has happened, a few extremely powerful companies ran by idiots brought the whole system down.

  62. 62.

    John D.

    February 3, 2009 at 5:48 pm

    Ever heard of a tautology? As in, logical fallacy. Didn’t think so.

    Um. A tautology isn’t a fallacy. It’s simply a tautology — as in A=A. It’s true, but logically meaningless.

  63. 63.

    FI

    February 4, 2009 at 11:53 pm

    Pleitez is absolutely right on the money.

    Issuers of debt had at most four practical choices for ratings, and the ratings agencies by the very fact they had such fundamental market power over issuers and their investment bankers should not have allowed momentary flows in market share among the ratings agencies to have influenced the level and sophistication of hard-nosed analysis of the alphabet-soup debt offerings.

    But, they did. The agencies were stupid and way-beyond negligent. Indeed in many cases the agenices should be criminally liable for passing on toxic garbage to institutional and retail investors.

    Likewise, the SEC should not have been dead asleep, rubber stamping anything that came across the transom, and wasting taxpayer money on nitpicking, bureaucratic reviews while completely ignoring literally hundreds of well-founded and often thoroughly-researched-and-documented complaints by often-impartial whistle blowers who correctly and early-on identified a great many fraudulent operators, many of whom sadly are STILL in business today. There is no better paper-pushing ostrich with its head in the sand than the United States Securities and Exchange Commission.

    We need guys like Pleitez to go to Washington and revamp the SEC into the proactive institution it can be in a GLOBAL capital market, while putting the rating agencies’ feet to the fire.

    What we DON’T need are career politician-mandarins who NEVER have attempted to reform the entities that were created to protect investors and whose only clearly visible accomplishment has been to stepping-stone their way from alderman to mayor to assembly to equalization board and whatnot without ever having protected the little guy on Main Street.

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    February 3, 2009 at 10:59 am

    […] they didn’t fail John Cole. Or his commenters. […]

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