At today's FCIC hearing witnesses cited MBS Ratings were "triple AAA, senior tranches, super seniors" BUT something very impotent was missin' - those securities had not seen the light of day in an Arms length trade - 100% different breed of cat compared to an MBS that was bought and sold!
Where was the or any VOLUME of trading goin' on - on most of the toxic derivatives building up on and off the balance sheets of the CSE's?
Perhaps an analysis of MBS trading VOLUME month to month would show - as stated here in July 2007 that many of these securities probably traded "by appointment" i.e. infrequently, read less than hoped for - yet the AAA ratings persisted.
http://www.fiduciaryexpert.com/page3.html
Speakin' of volume - and the lack thereof excuse me, the volume WAS goin' on somewhere as penned earlier today ON and OFF sponsors', issuers' often notably one and the same underwriters' balance sheets! And as if Wall Streeters don't know this - when a company is holding a block of stock ready to issue into the market from a shelf offering - it will have what?
OVERHANG - yes - like a HANGOVER.
A dampening, more realistically a depressing effect on that stock - the stock which is BEING traded in and on the markets; YET somehow the same Wall Streeters reckoned that the OVERHANG of MBS and related derivatives inventory was above and beyond the dilutive effect of more of the same flooding the market!
So - it doesn't take much to see some conflicts - the rising waves of CASH compensation were SO enjoyable during 2003 to 2007 that executives state "No one saw the crash, the tsunami" but as Mr Angelides said today there were warning signs - ignored by those who's firms WERE holding back the flood waters of MBS and related derivatives; stored on and off balance sheet, totally self created, held, NOT sold (and why was/is that?), month after month, "ratified" in the parlance of Wall St respondents (a reversal of their PRIMARY defense against public customers) and this IMPORTANTLY NOT ONE WALL ST CSE IS SUING ANOTHER BASED ON LACK OF CAPACITY - HUH?
MEANS THEY KNOW THAT THE OTHERS KNEW THAT THEY KNEW EXACTLY WHAT GAME - CHARADE WAS BEING PERPETRATED EVEN UPON THEIR OWN FIRMS - AFTER ALL THEY WERE GETTING PAID IN CASH. AND AS PRACTICE ON WALL ST - HE WHO EARNS THE MOST GETS TO APPOINT AND ANOINT FUTURE LEADERS - MOUTHPIECES OF THE SAME; IT'S NO LESS POLITICAL THAN WASHINGTON OR CHICAGO POLITICS.
When it comes to "control' see my submission to the FDIC August 2009 here http://www.fdic.gov/regulations/laws/federal/2009/09c01AD48.PDF
More on Ratings - some lessons seemingly forgotten, and ratings DO NOT EQUAL VALUE - never have never will!!
A rating is only ONE characteristic, supposed marque of value, ONE ratings agency's opinion. Coins can be graded brilliant uncirculated or proof - that doesn't CAUSE a third party to pay par or any value whatsoever, let alone the holder's expectation of value will be assigned in a trade, Postage Stamps the same way.
Why would these executives, managers, supervisors believe any different unless of course they were listening TO - instead of ASKING hard hitting, tackle NOT touch football questions of - their (conflicted) prop traders or their auditors - ya' think?
Lessons of Enron and Worldcom BONDS - oh how about the WPPS (Washington Public Power Supply) bonds - all rated solid investment grade, some even at the top rung - and what happened? Poof - accounting scandal here, fraud there, as if MBS were above ANY fray!
Let alone - sub prime, interest only or Alt A - was the underwriting at origination a AAA process? You know and everyone KNEW the answer to that WHEN - AT THE TIME - it was goin' on - correct me if I am wrong.
Incredible siesta continuing on the US taxpayers' dime - hoping to see some major Compensation Clawback, Jail time for some singularly obsessed with RATINGS!
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