Highest Heaps of Blame belong to………..

This and so many other reports from “experts,” pundits as well as those in the private sector who have their own experience with the lending disaster which has it’s roots in the past but began to show it’s ferocity since 2001.

Chief says these are the culprits in order of ability to have prevented had they done what they could have and should have:

Numero Uno without peers: Bond Rating Agencies such as Moody’s and Standard & Poors. Had they not been seduced successfully by large fees and the prevalent stupidity that home prices will always go up. By far the most culpable. Poor business judgment is not a crime. What these folks did was not poor busines judgment. They did not even try to do their job of evaluation when presented with ever new versions of higher risk mortgages that on a risk based mechanism supposedly in place, would have commanded so very high incremental increases in rate and fees. These guys looked the other way and shrugged and let those mortages in pools that they gave a AAA rating to, and we are off to the races as every investor trusts this rating as the next best thing to US Treasury debt. No one looked under the hood because many others besides Moody’s, Standard & Poors etc where doing that and putting their “reputation” and judgement on the line. They were essentially “bribed” (not a legal term) to look the other way and allow mortages that belonged into lower grade securities into these golden Triple A securities. This “financial encouragement” came from a lot of places including from the likes of almost every major firm in the Wall Street crowd, Lehman Brothers, Bear Stearns, Goldman Sachs, Merrill Lynch, others, as well as most major banks like J.P Morgan, Bank of America, Citigroup.

If there is any justice, highest ranking individuals in those firsm shoud be brought up on charges (look hard prosecutors) and hopefully brought to some account. You know, something like the jail terms some get for their second or third misdemeanors.

Second in Line: The outside accountants such as The Big Five (and also closely related Financial Standards Boards who create the rules) who  review all operations of the company including the kinds of assets created or invested in and who issue an opinion of the financial statements management of all of the above companies issue as well as those of other players such as Fannie Mae and Freddie Mac and large loan originators such as Countrywide Funding, Mortgage, Bank etc. So many, including. These Auditors have created rules that are not only impossible for the investing public, for whom the oversight of these entities are supposedly directed, to understand the audited financial reports no matter how pretty the cover is. Jail terms earned and advised.

Third in Line: The Federal Reserve in it’s interest policy making role as well as it’s regulatory and supervisory role over national banks which include most of those mentioned in Numbero Uno. First the Fed kept short term interest rates low, poor judgement in a difficult environment most do not really understand post 9/11 and post internet bubble burst. No jail terms for that. But for the regulatory blindfold affair of their regulations and supervision of their banks activities, and the knowledge of the kinds of mortgages being written they knew or should have known were being made especiallay the ones that did not meet the smell test of a kindergartener with a pull potty at school, all of which mortagees were “financially” incorporated into the Tripple AAA all regulators like to see on the books of their children, If not jail terms, then banishment from the industry and their names printed in newspapers as pariahs who contributed to this serious breach of our national security.

Yes, it is that far reaching. It equals or excceds our loss of control and costs of our energy, and despite the seeming “progress” in Iraq, it is cllose to the unintended consequences of Bush’s foreign policy decisions, granted, they were crafted in perhaps in the most difficult time in modern history.

IMPORTANT: No new regulation are needed and I would vote against any legislators who say that is the solution to preventing this in the future. HS. Responsible Employees of all of these entities need to be fired, without ANY PAY and jailed if at all possilbe. The Democrats are as smelly in this case as the putrid Republicans. Actually Democrats, smell a little worse this time, who along with their Lobbyists have kept control of Fannie and Freddie EVEN AFTER previous Democratic CEOs were fired for good cause, Leland Brendsel for HIDING billions of dollars to smooth out earnings and Frank Raines for manufacturing billions to smooth out earnings.

The media wants to blame the loan broker, the Realtor, the builder and other participants all played a part but their crimes are limited to knowingly putting individuals in mortgages they could not afford, like selling a gun to someone who cannot figure out how to use it safely, but these other folks simply unloaded factories of dangerous mortgages to the unsuspecting public, intermediaries like the brokers and builders like poisonous gas over the entire nation and much of the offshore investing powerhouses.