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Politics : Politics for Pros- moderated
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To: KLP who wrote (361732)4/28/2010 9:02:59 PM
From: Nadine Carroll2 Recommendations  Read Replies (2) of 793866
 
It's a partial description. Wall St. played its part in the Bubble. After government set up a number of loopholes big enough to drive Mac trucks through, guess what? they drove Mac trucks through them.

Also responsible is the Commodities and Derivatives Reform Act of 2000, which removed the requirement that you could only buy a derivative that hedged a position you owned, i.e., you couldn't buy fire insurance on somebody else's house. The act removed that requirement, and again, guess what? arson rates increased sharply. This is what Goldman is being raked over the coals for, putting together sh-- sandwich mortgage-backed derivatives, insuring them with AIG so they got AAA ratings, selling them to unsuspecting Euro banks, and shorting the hell out of them with other derivatives.

However, Wall St. was plainly "too clever by 'arf" as several of the major investment banks managed to blow themselves up with these stunts.
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