Monday, August 17, 2009

An Hour And A Half Of Your Life...

...and you'll never have to claim ignorance again.

10 comments:

Sarah Laurenson said...

I'll claim ignorance of whatever it is I'm ignorant of.

Chris Eldin said...

This is very interesting. I listened to a bit...but will have to come back a few times to get the most important points. I have a feeling I'm going to want to stay ignorant.

pacatrue said...

I've watched through Black's entire speech so far, and a bit of the interview. Great stuff. I hope the interview goes more into what to do going forward, and I'm still not clear on the fraud itself. He mentions fraud repeatedly, but most of the specifics in his talk were about incentives to think in the short term, ignore risk, etc. I wonder if the rating agencies can be prosecuted if they are giving out AAA ratings without even seeing loan histories.

Will come back to it later.

Scott from Oregon said...

pacatrue-- A home buyer lies about his/her income. Fraud. The appraiser fudges the appraisel. Fraud. The loan agent turns the other way, in fact, only uses in-house appraisers who will fix the numbers to make the loan. Fraud.

Every step of the way there was fraud on top of fraud. If you sell loans that are known to be fraudulent (see above)packaged as AAA loans, you are commiting fraud. If your books say you are insolvent because what you own is not near what you owe and you don't tell your lender... Fraud.

The question is, where is there NOT fraud in all of this?

blogless troll said...

Exactly. And then you get companies like Goldman selling these subprime MSBs to investors and then turning around and shorting the very same products because they know they're crap. That's about as textbook a definition of securities fraud as you can get.

Up to our necks in fraud and we haven't even gotten to the bailout part yet.

Robin S. said...

I get sick thinking about this - but it's good to see what's what, and pay attention.

Scott from Oregon said...

http://original.antiwar.com/roberts/2009/08/19/americans-serfs-ruled-by-oligarchs/

blogless troll said...

Good article, Scott. And to answer its last three questions: No, no, and no.

It's not a prison if you never try the door.

pjd said...

You will be surprised to find out that I did, in fact, listen to the entire thing. I think your promise of never being able to claim ignorance again is a little overstated. I now feel somewhat more ignorant than I did before. Or perhaps, at least, less blissfully ignorant. Now I feel like I've bitten of the forbidden apple, and I have become aware of my own nakedness.

Which is in itself ironic because I was folding the laundry during the interview portion.

Anyway, the guy seems smart and knowledgeable, if a bit smug. But it seems like he's saying that what is needed is tons of government regulation and oversight. That the kick-ass folks in government should be poring over spreadsheets and swashbuckling through accounting departments, not standing on aircraft carriers under "we won" banners and sneering, "Bring 'em on!"

Am I hearing it wrong?

As a point of reference, here is where I learned all my knowledge of economics and civics: You saw him repressing me, didn't you?.

blogless troll said...

One man's overstatement is another man's advertising.

Yeah, he is smug. But he's a professor now, and that's how I took it. I've had plenty of professors who come across the same way. Some good, some not so much. Another thing to keep in mind about him is, according to his UMKC bio, he developed the concept of "control fraud." It sounds like a good framework to use, it makes sense and all that, but at the same time Billy Mays, were he still alive, wouldn't come out and tell you if Oxyclean didn't get every stain out.

I was less impressed with his going forward strategy than his insights about how it all came together. Yes, the regulators need to regulate and those in charge of oversight need to oversee. Does that mean we need more regulations, or enforce the one's we have? No idea, but I would guess probably both. If it were that easy, why isn't it being done? Tougher laws and more cops on the streets don't mean much if they're being reassigned to traffic duty by those at the top.

There needs to be a house cleaning, but who's going to do it? Do you really think John McCain didn't know what kind of person John Keating was? Drive a woman off a bridge and leave her to die to save yourself? A senator's "indiscretion." You're still a hero when you die. Was Congress really that ignorant about what repealing Glass-Steagall would do? Are they all just mad on power? Who knows.