I really don’t know what to say:
Whether they deserve to be or not, Countrywide Financial and its top executives would be on most lists of those who share blame for the nation’s economic crisis. After all, the banking behemoth made risky loans to tens of thousands of Americans, helping set off a chain of events that has the economy staggering.
So it may come as a surprise that a dozen top Countrywide executives now stand to make millions from the home mortgage mess.
Stanford L. Kurland, Countrywide’s former president, and his team of former company executives have been buying up delinquent home mortgages that the government took over from other failed banks, sometimes for pennies on the dollar. They get a piece of what they can collect.
“It has been very successful — very strong,” John Lawrence, the company’s head of loan servicing, told Mr. Kurland one morning last week in a glass-walled boardroom here at PennyMac’s spacious headquarters, opened last year in the same Los Angeles suburb where Countrywide once flourished.
***“It is sort of like the arsonist who sets fire to the house and then buys up the charred remains and resells it,” said Margo Saunders, a lawyer with the National Consumer Law Center, which for more than a decade has sought to place limits on abusive lending practices.
Lovely.
NickM
And if government does something about it, it’s "discouraging entrepreneurship."
AhabTRuler
Is it time for the wall and rifles thing yet?
Lavocat
Like every food chain, capitalism has its parasites, bottom feeders, and scavengers.
kommrade reproductive vigor
Well. At least we know where to find them. Now if you’ll excuse me I need to gather some … ah … supplies.
burnspbesq
And in other news, AIG has filed suit in the U.S. District Court, seeking a refund of over $300 million it alleges it overpaid in Federal income taxes in 1997.
Yeah, that’ll play well.
John Cole
The funny thing is they actually are helping people- the couple at the end of the story is much better off for their involvement. But for balance sheet, and accounting practices, and greed, it sure would have been nice if the original owner of the loan had renegotiated like that.
AhabTRuler
Dollars to doughnuts the Dangerous Game wasn’t written with pasty boardroom execs in mind.
demkat620
@AhabTRuler: Torches and pitchforks first, tovarysh. These things must be done in the proper order.
AhabTRuler
Sorry. I just woke up from a nap with the kitty on my lap. I think I must have been sharing her dreams, and it has left me in want of prey.
linda
ace greenberg was in the news today.
.
olbermann noted tonite that greenberg in years past provided $20 million to an outfit to lobby for legislation disallowing investors to file suit against corporations that had defrauded them thru false financial practices.
.
greenburg filed suit today against aig for securities fraud.
Bad Horse's Filly
Completely OT, but a bit more optimistic. What if you threw a pro-coal rally and no one came?
update: I think my favorite part is that the same people are behind co2: we call it life and drinkbottledwater.org Awesome!
That Anonymous Guy
What a great poster child for the return of the 90% top tax rate.
Dennis-SGMM
It’s as if they’re saying, "You people don’t have the stones to come after us with pitchforks!"
JGabriel
@AhabTRuler:
JWW was posting in the previous thread. Haven’t seen Atanarjuat, Choler, 28%, or BOB around, though.
.
Comrade Darkness
I’m afraid that as soon as nationalization/pre-privatization was off the table, this was a no-brainer.
Claw backs are still a possibility. I can dream.
Comrade Stuck
A little off topic.
Saw a clip of Bernanke’s testimony on the Hill today, and he seemed to zero in on AIG as the epicenter for the financial mess we’re in.
It’s kind of hard for me to imagine Bernanke "get angry" about anything, but he tried.
Olliander
Some would call it, "buy low, sell high". Its a simple concept really.
But our government won’t do anything about this. To do so, would shine a light in that corner of the room that nobody seems to want to talk about—the subprime mortgage debacle. Maybe we should ask the honorable Senator Chris Dodd.
southpaw
I don’t think our beef is with these guys. I mean, sure, they’re amoral predators, but we knew that before. Once regulations that properly account for their nature are in place, I don’t think there will be any need for the pitchforks and whatnot.
When a tiger escapes its cage at the zoo and hurts somebody, do you blame the tiger or the guy who didn’t build a proper enclosure?
AhabTRuler
@JGabriel:
{JWW, Atanarjuat, Choler, 28%, BOB}:BJ::Guinea Pig:Condor
And at least 2 members of that population are spoofs, 1 that I am positive of.
Dennis-SGMM
@JGabriel:
BOB is trying to convince that cashier at Panara Bread that his Yugo is actually a valuable collector’s item.
Brian J
The populist in me wants to say there’s a special place in hell for people like this, but leaving aside any resentment for these bastards, isn’t this good for both the people whose financial firms are buying the mortgages and the market as a whole? It sucks that the same people who helped add fuel to the fire are coming out largely unscathed, but I can’t say I blame them for seeing a good opportunity and going for it. Also, and more importantly, isn’t this part of what Fannie Mae and Freddie Mac are being encouraged by some to do now that they are government entities again?
One of my family members who is a finance/tax guy and I were talking over the holidays and he said that he was looking into funds that were buying these securities. Because they were so cheap, it wouldn’t take a huge rise in value to become profitable, or something along those lines. If anyone here has any money to spare, it might be a good idea to look into investing in something like this.
BDeevDad
But don’t dare raise their taxes!
jcricket
Blame the liberals, of course.
SASQ.
AhabTRuler
@Dennis-SGMM: He is fond of pie. Of course, that just makes him even more surreal, as he is evidenced by the reaction he induces in others, without the benefit of the source.
jcricket
Next time you hear about moderates or libertarians saying we need "tort reform" think of this, or the countless examples of insurance/oil company malfeasance only exposed after a long lawsuit.
The vast majority of medical malpractice cases are either settled, or substantiated at trial. There is no tort crisis, there is a illegal behavior that is not being punished effectively enough to stop it crisis.
Libertarians can go to hell.
Martin
Welcome to Orange County. We do this shit all the time. The subprime crisis was build off the profits made from the S&L crisis we created.
The upshot is that we have really night yachts and cars here. Spotted 2 Bentleys and a Lamborghini on my 2 mile commute home. I don’t even note the Ferraris any more…
How’s everyone enjoying their $8,000 homes and unemployment checks?
Oliver's Neck
@Lavocat:
Yes, but in capitalism, those roles are not subsidiary but central. Under capitalism the bottom feeders, parasites, and scavengers are called the "successful".
Annie
Jonathan Krohn, the new 13 year old star of the conservative movement, said in his speech to CPAC, that he wants the American public to understand that conservatism is about principle, specifically about putting people first and protecting people’s rights.
The question I would ask him is which "people" is he talking about?
Given that we know he has lots of experience with trying to pay a mortgage, keep his house, in the face of loosing his job and health care, is it any wonder that he is becoming the face of the new conservative movement?
The issues isn’t that ex-executives are looking to take advantage of opportunity. The issue is that conservatives believe that they still have an ethical and moral foundation to stand on, and that they look to a 13 year old, with no life experience, to put forth their arguments.
Comrade Stuck
Yes, but this time they were buying and selling rocks, lots of em. They got a bunch of cans and filled them up with these rocks, then passed them around to their buddies and each would bid them up and pass them back, all the while pretending they weren’t rocks. Till one day, somebody said, hey man, these are nothing but fucking rocks, and highly insured rocks at that. The End!
Brian J
About the lawsuit for the $300 million in tax overpayment: is it for one of three parts of the company that weren’t responsible for the CDS issues?
Chuck Butcher
There’s nothing to be done? Are tax codes off the fucking table? Folks don’t like smoking and so discourage the behavior with "sin" taxes. Exactly what is it that makes an income tied capital gains tax out of the question? Fine, you make $0.5M and get taxed 39% on CG. Damn, that was hard. You’re a CEO, your taxes are tied to your average non-executive position wage, at 700% you hit a tax rate of 90% of any form of compensation, period, your executive potty counts.
Goddam, you don’t want me to smoke so I pay more in taxes that I do in product and you’re fucking confused? It isn’t punishment it is behavior modification…
Oh hell, it’s a big damn ball bat up the side of the head.
amorphous
He would answer, "I don’t know, I’m just repeating things that my mom and dad say, ‘cept I’m a cuter package to deliver the shit inside!"
Brick Oven Bill
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.
The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
– The New York Times, September 30th, 1999
This is why I blame Capitalism, and Canada. Isn’t Krista Canadian? I think that Tim guy is too.
Martin
Yes, it’s all Krista’s fault. Specifically, Krista’s Canadian hoo-ha’s fault.
Comrade Stuck
@Brick Oven Bill:
Jaysus, BoB that sounds like a good plan, the govment is going to help private investors buy up those loans albeit at cut rate, and get them off the Banks back so they can get liquid again and start lending money so people can buy stuff and we will once again be in consumer heaven. Meanwhile the Private investors can renegotiate the loans and keep people in their homes, and when housing values go back up they will make money. Did you notice how many times I used the word private. That should warm your itty bitty heart. Of course, the banks will lose some, but the greedy asshats caused the problem to begin with.
Canada is innocent, I swear/
Annie
Thanks amorphous. My feelings exactly. Conservatism is bankrupt. All those who preach conservatism do is look for "the cuter package to deliver the shit inside." No notion of responsibility. Just good sound bites. All is fair, as long as some make millions. That explains why a 13 year old, and Rush are the face of the new "re-branded" party.
Groucho48
What gets me is that many conservatives will praise this and point to it as an example of private enterprise at work, but, will just change the subject if you ask them why its okay for the government to discount mortgages to companies like this, for pennies on the dollar, but, it’s nothing but outrageous socialism and a weakening of the moral fiber of the country if the government was to offer the same discount to the people actually living in the house.
Comrade Darkness
@Brick Oven Bill,
Dead meme. Subprime is no longer the problem. And here at the economist if you don’t like charts. And here, charts from 60 minutes.
Subprime was the SECOND wave of crap to go bad. The first, in the late 90s, was manufactured housing. The fraud in all of these cases was primarily at the bank level, and to solve this mess that’s where it has to be stopped. Banks must be forced to keep loans on their books for a year before collatoralizing them. Take that instant market away and this problem goes away.
Banks have better information than the buyer about the property they are loaning money on. They always have. They always will. Recently, they willfully ignored it, firing honest appraisers even, in the interests of a short-term buck and inflated year end bonuses. This continuing crap about fannie and freddie is just the perpetrators of this mess hoping to dodge a real solution to the problem, so they can milk the system another day.
freelancer
The lens through which B.O.B. seriously views every non-conservative in this country.
and of course it wouldn’t be complete without a summation of his worldview.
I like the spoofs better; bob and attatourniquet-around-his-neck need to get laid. (Unless, that was Attajuarnat at CPAC, doing his impression of the squarest pre-teen in the world.)
Brick Oven Bill
Mr. Speaker, this bill is motherhood and apple pie. This is what public policy should be about, recognizing a need and moving to place in law some law that will indeed help those who really do need assistance to realize the American dream. This did not start today, did not start yesterday.
We have a lot of legislators who have worked on this. Congresswoman Roukema is not here anymore. She worked on this, and I think we had it in the 2003 Omnibus bill. We did not get that at that time, but it has been revisited in this way by the gentlewoman from Florida (Ms. Harris), and again, there will be no opposition. Truly, this is motherhood and apple pie. Homeownership, there are so many people who are desirous of owning their homes, who work every day but cannot afford that downpayment.
– Representative Waters, American Dream Downpayment Act, October 1st, 2003
Krista?
Chris Johnson
That is FUCKING debatable, my friend ;)
Of course, I’m not a Republican…
The Grand Panjandrum
@AhabTRuler: A rope is more like it. Reuse is always the most sustainable practice.
Fulcanelli
The more Obama’s poll numbers go up the more the wingnuts rage and sputter. Around the beginning of April when the tax cuts kick in we should expect a critical mass of exploding heads.
Over lower payroll taxes.
Sweet!
jrg
These are the same execs who would be screaming "socialism" if the government bought the banks for pennies on the dollar and started selling equity stakes back to investors.
No shame in this game. None.
jrg
These are the same execs who would be screaming "so cia lism" if the government bought the banks for pennies on the dollar and started selling equity stakes back to investors.
No shame in this game. None.
(reposted due to spam filter)
Brick Oven Bill
An innovative affordable homeownership effort in West Oakland is one step closer to reality thanks to a $500,000 deposit announced today by U.S. Representative Barbara Lee (D-CA) between Community Bank of the Bay, Northern California Land Trust (NCLT), and Fannie Mae (FNM/NYSE), the nation’s largest source of financing for home mortgages. The $500,000 deposit will allow the bank to underwrite a revolving line of credit to create a Community Land Trust in West Oakland which will purchase, rehabilitate, and sell homes to first time home buyers.
–Corporate Social Responsibility News, August 11th, 2000
Krista…
handy
@Brick Oven Bill:
I still question the basic assumption that home ownership is the right thing for all people for all times, but that doesn’t excuse the lazy and frankly irresponsible lending practices that have been going on the past several years. And as pointed out above, lenders just didn’t care enough about the risks. I’m sorry but you don’t get a pass for that.
Dennis-SGMM
I was going to suggest that the R’s try marionettes to get their message out but then I remembered that they already have Michael Steele.
Alan
Speaking of capitalism, have you seen the Jim Cramer video that’s been making the rounds on conservative sites?
Cramer is doing the bidding of his investment banker friends. They got to stop Obama’s plan to end the racket of gaming our financial system.
Well, at least that’s my take on it. :)
Comrade Jake
Speaking of homes on fire, holy fucking shit Batman. Pensions underfunded a cool $1T? Game over man, game over.
clone12
Full disclosure: I am a quant in the finance industry, so what I say may be self-rationalizing. Feel free to tar and feather me after this, but I do feel obligated to say a few things in their defense, as I am familiar with their operation.
As mentioned above, they serve a vital function. Just as carrion feeders are necessary to complete the circle of life, you need the bottom feeders here to recycle capital and ensure and enhance liquidity in the financial system (note: I am not equating these unfortunate borrowers as carrion, it’s not a perfect analogy and I am aware of the deep and very real level of human suffering here, but it’s the best I can come up with right now).
There are a couple things to consider: 1) They are putting up there own seed money- something to the tune of 25-30 billion dollars. And when they bid for these loans they are injecting much needed capital into the system. 2) The loans they are bidding are "cheap" for a reason. The loss severity on a subprime loan is something like 60%, that is to say, the bank will get back $40,000 on a $100,000 subprime loan if it goes bad. How much are willing pay for a $100,000 mortgage given this information?
Now this is not to say that Countrywide was not foolish or that there should be no punishment for people who did wrong. Furthermore, PennyMac should be regulated like any other financial entity, and certainly at a level far higher than was regulation was like 5 years ago- there were a lot of consumer abuses back then and there is no excuse for any of that today. But something like a PennyMac is exactly the type of thing you need to have in order for the economy to recover because it is the first step towards the normal cycling of capital.
TheOfficialHatOnMyCat
@Alan:
Yes, saw the Cramer act all over tv today.
Anybody who would take any investing advice from that crazy fuck deserves what he gets.
But he’s an MSNBC property. Which is why you saw him on Hardball today pimping his "stock market is tanking" talking points and nobody would call him on his track record. Which is pure shit AFAIK.
Comrade Jake
@Alan:
He was on GMA this morning, completely unhinged. Obama is destroying wealth, yadda yadda yadda. Which makes him fit right in with all the other right-wing nutjobs NBC’s been trotting out of late. So, you know, he’ll be on a lot.
Brian J
@Chuck Butcher:
I’m definitely open to raising taxes on the wealthier in our society for a variety of reasons, but it sounds like your casting your net a little too wide. For one thing, it doesn’t make sense to punish all people over a certain income for the mistakes of people over a certain income whose income was gained from the activities being discussed.
I’m obviously no more qualified than most people discussing this type of stuff, so take this for what it is, but if there’s one reform that seems simple enough is matching incentives with risk. Basically, this means that if a financial firm takes a big risk that could end up causing a lot of pain for not only the firm but for the system as a whole, they can’t end up walking away with millions and millions while everyone else is suffering. I’m not sure of the ways this can be enforced, but it can. If we do nothing else, I hope this sort of mechanism turned into law, because it covers a wide range of activities without singling out some that may not be bad as long as there is capital to back it up.
handy
@Comrade Jake:
Well he just doesn’t want Ludlow to have all the wingnut fun.
Just Some Fuckhead
Capitalism has been the warming light that has kept the worms from freezing to death lo these many years so it would be a shame to see that light go out or something.
I think I’ve come up with a solution. A celebrity song/benefit for the U.S. Remember back in 1985 when a group of really good singing artists single-handledly brought Christmas to the African continent, something that untold numbers of Christian missionaries failed to achieve? So we know it works.
We Are The U.S.
There comes a time
When we heed a certain call
When the world must come together as one
There are people dying
(Sure, it’s us that’s killing them but we’re
The greatest country of all
We are the U.S.
We’re in a great big mess
We are the ones who fucked the world up…
Anyway, I’m too tired to plan it all and write the song right his minute so maybe we can form a committee. Does anyone know any celebrities?
John Cole
@clone12: I believe I said that they are doing good in the sixth comment. That being said, what they are doing is making a buck off the type of loans they made in the first place that then went tits up. Sure, someone needs to fill that role, but does it have to be them?
Brick Oven Bill
Bush Proposes Boost in Affordable Housing
Authorized by the 2000 Community Renewal Tax Relief Act, the empowerment zone initiative would provide $2.3 billion in tax credits over five years to cover up to 50 percent of construction or renovation costs in rural and low-income neighborhoods. Incentives totaling $6 billion were earmarked exclusively for the zones. They will also be eligible to share in an additional $11 billion in New Market and Low-Income Housing Tax Credits. According to the Mortgage Bankers Association of America, some 13 million Americans households need affordable housing.
– Commercial Property News, February 13th, 2002
Krista!
OK I’ll stop. The banks made the loans so they could collect the fee. They then kicked the risk upstairs to Freddie-Fannie. Then Orszag testifies that the taxpayer can assume all of Freddie-Fannie’s risk for probably no money , but maybe $25 billion in two years, or on the outside $100 billion through 2010.
We have already written $400 billion in checks and it is ONLY TWO MONTHS INTO 2009. And Orszag is the one who got the promotion and a unanimous approval vote by Congress. What is going on? I do not know but it is not capitalism. And I really don’t blame Krista either.
I blame Congress, the Directors of Fannie-Freddie and their enabler, Peter Orszag.
Brian J
@TheOfficialHatOnMyCat:
I saw him on "Hardball" today and was almost speechless. Does he really think Obama’s plans, which haven’t even really been felt yet, are driving down the stock market? Does he really think that if this was a big possibility, it wouldn’t have come up in the White House just once or twice?
TheOfficialHatOnMyCat
Dude, come on. You know.
TheOfficialHatOnMyCat
@Brian J:
Exactly.
Look, NBC is looking at that fat pig Limbaugh, and going, that sumbitch is making more money than we are. We need a crazy fuck or two to go on the air and make us some money off this situation.
Get Cramer on the phone!
Martin
I don’t think the existence of PennyMac is the problem, rather the people running it. I’ve seen Jim Kramer badmouth a stock on his TV program and then brag later that he made a killing shorting it because it tanked on the rumor that was going around (that he started). He’s creating his own reality because of his position. The PennyMac guys can be accused of doing much the same, building this house of cards, bleeding off the profits from the bubble, and then walking in after it all comes crashing down and making a killing on the shitty market that they created using the money they plundered from the bubble.
The problem isn’t that PennyMac exists, but that the PennyMac guys aren’t in prison and are allowed to do this.
JGabriel
Clone12:
I think most of us get that Clone12. The problem we’re concerned about, the potential for moral hazard, might be best illustrated by the cliched example of the Mafia in the trash removal business.
No one’s arguing that the trash doesn’t need to be picked up, we’d just prefer to have it controlled by people who don’t have a history of using the process to cover other crimes. Similiarly, Penny Mac may be performing a necessary function, but given Countrywide’s history, we certainly have some justified ambivalence about its former executives being in charge of Penny Mac.
.
Comrade Stuck
@Comrade Stuck:
This was what I was talking about in the above previous comment. It doesn’t deal with bad home mortgages, but other kinds of bad loans, like for cars and consumer loans.
Anyways it sounds like a good plan to solve one piece of the busted economic puzzle, so banks can start lending money again.
Brian J
As I said above, there are opportunities out there for everyone who can invest some money. I’m not sure of any that specifically do this now, but that’s only because I haven’t really looked as I have my eye on something else.
TenguPhule
Ready, aim fire.
AhabTRuler
Hey now, don’t forget that comma. You gotta savor the moment!
Brian J
Hey now, maybe there is some hope for the souls of these bankers after all. From an article in The Wall Street Journal:
As the article states, it’s not going to be that big of a deal as it’s only likely to affect a small number, but this a step in the right direction…right?
Jon H
@Dennis-SGMM: "BOB is trying to convince that cashier at Panara Bread that his Yugo is actually a valuable collector’s item."
It’s a rare first generation prototype Smart Car.
Oliver's Neck
Well, while that capital is "getting cycled" real people are losing their real homes. Saying that capitalism functions like the ecosystem is to create a false analogy which smuggles in notions of naturalness and inevitability. Capitalism is neither.
Brian J
That’s just the point: some people won’t lose their homes because of this. It sucks that these people are the ones performing the service, but they are.
Jon H
@Oliver’s Neck: "Well, while that capital is "getting cycled" real people are losing their real homes."
I believe it depends on when the mortgage is bought by the bottom-feeder.
If the borrower is still resident, then the bottom feeder might renegotiate a new deal based on the low price paid to buy the mortgage. (After all, in this market it’s probably much easier to deal with the occupant, rather than trying to find a new buyer – especially if the home needs work). If they buy the mortgage from a bank for 30% of the original value, they can then cut a new deal with the borrower based on a much lower principle amount, and the borrower might be able to afford the new terms, and not be so far underwater.
(Even if a foreclosure has gone through and the borrower has vacated, there’s still something to be said for getting the house in the hands of a company that will take care of it so it doesn’t get trashed, and put it up for sale at a reasonable price.)
This American Life had a show about banks this weekend, and one of the things they talked about were some guys in New Jersey who were doing similar things to what PennyMac is doing.
clone12
I completely agree that in a perfect world they should not be allowed to double dip like this. And given their history there should definitely have regulators breathing down their neck.
I don’t think I am disagreeing with you guys, I just wanted to provide some industry perspective on this…
The Other Steve
I know of folks from the mortgage company I was at doing something similar.
The problem is, the folks who are going to be doing the vulture work are going to be people who understand mortgages… and the people who understand mortgages are going to be the people who created this mortgage mess in the beginning.
I will say though, that while there were some nasty folks in some of the mortgage business, there were also a lot of people who were doing good work and just got caught in the flood.
The people I’d have the most respect for were the ones who were in the business from before 2002. Anybody who got in on the bubble wave is a greedy sonofabitch with no morals.
Comrade Kevin
@Bwick Oven Biww:
You don’t say?
Chuck Butcher
Damn, does anybody understand what Capital Gains Tax is? If you buy it for $100 and sell it for $150 virtually immediately you get taxed on the $50. If any other factors intervene, like you spent $10 improving it, or paid interest on a loan to buy it, that stuff comes out of the gain. There are ways to avoid that tax all together on homes and other mechanisms exist. 15% is today’s rate, you pay more on FISA/SS and there is none of that on CGs. It is kind of silly to beat the hell out of people making a couple bucks off CGs but at some point some kind of reasonableness about tax load is reasonable.
As for my CEO example, at 700% of avg wage you think he’s not being compensated? At 1000% don’t you think that money would be better spent on the work force or structural improvements? Exactly what kind of brain surgery do you think it takes to run a fucking company? In the case of Bankers I’d say being victim of experimental Sawzall brain surgery was all that was required. "I’ve got a system?????" It’s a comedy straight line…
robertdsc
Fine, then chop them off and kill the fund. Declare the monies involved in the fund as void due to criminal conduct, demand total restitution of bailout funds and leave the insurance company alone.
Comrade Dread
How about:
"Workers of the world unite…"
or…
"Do you douche bags have any last requests?"
Michael
I was thinking about the "Morning in America" snowjob from 1984, and realized that it was Bubblicious. The S&L debacle was in full form, pumping the pockets of the trickle-down morons full of air-dollars, creating the illusion of prosperity for those bubble beneficiaries.
Yes, some crumbs did fall from the table and a few lucky souls were allowed to partake – meanwhile, the long term instability that we are now paying the price for was driving in deep roots.
Ignoring the infrastructure and gutting education did nothing but to magnify the positions of those already residing at the pinnacle of the wealth/power status quo.
And it was costly – it narrowed the number of people who were capable of affecting policy decisions, making failure more likely and reinforcing the tendency to gloss over bad news and circle the wagons. After all – they’d be motivated to do so in order to protect their positions.
Michael
It is corporatism – think "Rollerball", only without the cool name or uniforms.
All the controls were taken off the game. Liability of directors and officers to shareholders has been gutted over the past 30 years (it negatively impacts "bold" decisionmaking, you betcha), enforcement budgets stripped, no forward planning in regulatory schemes undertaken. The pay structure rewarded reckless behavior as well.
There is no accountability in corporatism, neither from the Government nor from the market.
Binkyboy
I have yet to actually see how much Countrywide sold in repackaged sub-prime mortgages, but since they were hit hardest and earliest by their own practices, I’m thinking that they really aren’t the ones at fault for the state of the general economy. They may have started the ball rolling, people to review the debts that were held, checking the values of assets and reevaluating them with the knowledge that the housing bubble was about to burst.
Sounds like Countrywide is doing exactly what they should be doing. Making money. I’m betting that very few of the mortgages they are buying were ever theirs in the first place. Maybe that should have been something in the article? Nah, that would have required work by the author.