Quote:
Originally Posted by Hank Chinaski
Ty’s Next Door Neighbor: I need someone who can help me rewire a home built in 2008. Anyone?
Ty: I can probably help. I worked in regulating consolidation of energy sector companies in that time frame for DOJ.
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This discussion thread started with your assertion that a lawyer who worked in lending was most qualified to state what happened in 2008 re MBS. (You raised it as a question, but you were assuming that answer.)
And that answer is not wrong, usually. A person working closely with industry participants does know more than a regulator or someone suing people in the industry. Usually.
But the question that started this all was whether the banks were engaged more in fraud than mere victims of a bubble bursting. (This is a strange choice, as these aren't mutually exclusive and can run together, but forget that for now.)
If you accept the industry argument that the banks were more victims of a bubble than people engaged in wilful ignorance and fraud, you necessarily assert that a lot of people in the industry were incompetent or negligent. If a lot of people in the industry really didn't understand the products with which they were working, or the cash flows and credit risks underpinning them, might this be an exception to the rule that people within the industry know best what occurred in 2008? Might this be a situation where, if you believe the industry was caught as flat footed as it asserts it was, knowing what it knew about the housing market and securities derived from it at the time isn't really worth much?
Andrew Ross Sorkin wrote a book about 2008 called TBTF. He interviewed and culled quotes from largely industry insiders, and unsurprisingly, the book carries water for the industry and asserts the banks were more victims than fuckups or practitioners of IBGYBG. Numerous other books, too many to list, take a broader look (incorporating sources inside and outside Wall Street) at the housing market and MBS, and offer different a different verdict. They see a mixed bag of fraud, incompetence, and mania.
I'm not sure Wall Street is the best or exclusive source from which to judge what occurred in 2008 re MBS. It's one of many needed to ascertain what took place. So Ty might in fact be as good a source as any other on this.
