April 8, 2010
No industry should be immune to producing, marketing, and selling faulty products. One of the major problems in the financial industry is that this ndustry has been immune from this common sense idea.
You can pack a sucurity with junk: "From 2006 to 2007, Mr. Bowen said that decisions on poorly underwritten loans were changed from turned down to approved, and that as many as 80 percent of the loans that Citigroup sold to Fannie Mae, Ginnie Mae and other investors were defective.
After several attempts to correct the problems, he sent a detailed e-mail memorandum to Robert E. Rubin, an influential Citigroup executive and board member, and several other high-ranking officers." http://www.nytimes.com/2010/04/08/business/08panel.html?ref=todayspaper from congressional testimony at citi. Yet nothing happens.
When I read the above to me it is clear evidence of fraud. iT IS CRIMINAL. An industy sold a faulty product knowing t was doing so and there are no consequences. You can't get away with selling tainted food, lights that explode, etc.
WHY IS THE GOVERNMENT UNABLE TO PASS EVEN THE SIMPLE THINGS THAT ARE COMMON SENSE. IF THESE RULES CRIPPLE SECURITIZATION THEN SECURITIZATION SHOULD NEVER HAVE BEEN ALLOWED IN THE FIRST PLACE.
As an Md I have to act in a manner that is considered for the benefit of my patient. If I altered medical records to make a treatment appear effective or desired I would loose my license. No other industry in america is allowed to function without some manner of quality control like the financial industry.
My question is why the SEC is not seeking to charge these individuals when there is a clear admission of fraud in the case above. If it isn't illegal it should be, the money earned should be taken from them, and they belong in jail.