16 thoughts on “SL 633”

  1. Friends don’t let friends believe Rolling Stone articles, especially (a) those written about finance (b) by Matt Taibbi.

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    1. What’s wrong with it? There was certainly a huge lot of very bad things covered up that have yet to come to light.

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      1. For one thing, single-sourced accounts generally aren’t reliable. For another thing, despite the complaints by Taibbi and others, the government has a very mixed record when it does bring financial fraud cases before juries. So when you consider that there were, no doubt, any number of witnesses who would say various contradictory things, there’s no reason to think that $9 billion is different from the expected value of the government’s case. I mean, what does Taibbi think is the right number? He never attempts an objective and quantitative evaluation; he just rants.

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  2. Some pretty serious diversity among the winning Republicans, by the way. And the demographic breakdowns in the Texas gubernatorial race will never stop being awesome..

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  3. Reading that Taibbi article, mostly I feel bad for Alayne Fleischmann. If you google her her linkedin is public, and it shows that she graduated from Law School in 2002. On graduation she worked at Cadwalader, Wickersham & Taft for 4 years, then Chase until she was laid off in 2008. That means she probably worked on mortgage backed securities in one way or another full time for 6 years until the industry ceased to exist and she had virtually no experience relevant to anyone else. Not that anyone else in law or finance was hiring in 2008, but still. A lot of people lost jobs in similar ways most never fully recovered career-wise.

    Beyond that though, she doesn’t have much new to add to the story – at least not unless this article just scratches the surface. Bad loans, bad diligence – this isn’t news. The terms Alt-A and and scratch and dent are not some revelation, they’re an industry standard. And from the article she really has no proof of fraud. At all. Fraud isn’t securitizing a bunch of crap loans, it’s securitizing a bunch of crap loans and lying about it. Since she apparently didn’t know if the loans were sold let alone the terms under which they were sold, she doesn’t have a whole lot.

    In fact literally hundreds of people – just at JP Morgan – where deposed or interviewed during the various investigations and cases. No doubt many said there where problems. No doubt many fancied themselves whistle blowers. But allegations of fraudulent/incompetent diligence were front and center during all these investigations. And a huge number of people were involved. Now the DOJ decided to seek one big settlement instead of taking everything to court, and while that’s certainly a decision subject to criticism it’s also the DOJ’s decision to make.

    The truth is that far from being a heroic whistle-blower, she’s just one more piece in an enormous puzzle. If she honestly thinks the Attorney General of the United States is gaslighting her personally she needs to talk to a therapist, not a reporter.

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    1. Bad loans, bad diligence – this isn’t news.

      It is to me until somebody goes to jail for some of it and actual reforms are put into place. The more of this the better.

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      1. Well hey, if big dollar settlements don’t count as punishment and Dodd Frank doesn’t count as reform… I don’t know what to say. You may just have to learn to live with that being the end of it. The Holder has made pretty clear that it is in fact the end of it.

        In any event, it remains true that diligence failures and how to characterize them has been at the center of both media coverage and government settlements of these issues for years.

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      2. The fines are something like $20 billion, substantially less because of the tax write off. That’s not big, even in terms of the bailout and certain not anything remotely close to the damage done.

        And, no Dodd Frank doesn’t count as reform.

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      3. Bad loans, bad diligence – this isn’t news.

        It’s also a classic industry tactic: stonewall for ages, and then claim that everyone has known about it, so it’s not news, still less something that should be punishable.

        Running down a whistleblower — especially using sexist tropes if the whistleblower happens to be a woman — is also pretty much par for the course.

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    1. If that’s a serious punishment, somebody who robs a convenience store of Slim Jims and the contents of the register is sufficiently punished by having to give back the Slim Jims.

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    1. Eh, I can think of lots of male people who are in dire need of a therapist. That’s a pretty gender neutral thing. (Actually, on reflection, men are probably if anything in greater need of a therapist, given that men on average have weaker social networks and are less likely to have close friends that they can confide in. Which partly explains the greater propensity of distressed males to go on killing sprees, etc.)

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    2. When someone says they are having trouble eating and sleeping because they’re so upset about something, and that they’re ‘willing to blow up their life’ over it, it seems quite reasonable to suggest seeking professional advice. Man or woman. Those are real warning signs for depression.

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