» Posted by Martin Weil on July 16, 2009

there are always the courts as a venue to redress the wrongs perpetrated on the investing public.

From Bloomberg "The California Public Employees' Retirement System, the largest U.S. public pension fund, sued the three major bond-rating companies for $1 billion in losses it said were caused by "wildly inaccurate" risk assessments.

Standard & Poor's, Moody's Investors Service and Fitch Ratings used methods to analyze medium-term notes and commercial paper that were "seriously flawed in conception and incompetently applied," Calpers said in a lawsuit filed July 9 in state court in San Francisco."

I suspect this is not leading simply to a financial penalty so much as a remaking of the damaged ratings business model. Hooray.

And hooray for our system of multiple checks and balances that in the end may bring some measure of justice to an industry at the very heart of this credit disaster.

» Posted by Martin Weil on July 16, 2009

The 1932 Pecora Commission established to investigate the causes of the 1929 stock market crash "uncovered a wide range of abusive practices on the part of banks and bank affiliates... a variety of conflicts of interest such as the underwriting of unsound securities in order to pay off bad bank loans as well as pool operations to support the price of bank stocks. ... As a result of the Pecora Commission's findings, the United States Congress passed the Glass-Steagall Banking Act of 1933 to separate commercial and investment banking, the Securities Act of 1933 to set penalties for filing false information about stock offerings, and the Securities Exchange Act of 1934, which formed the SEC to regulate the stock exchanges" according to Wikipedia

Does anyone really think the Financial Crisis Inquiry Commission announced today, headed by the former Treasurer of the now near bankrupt state of California, Phill Angelides, will come anywhere near this record of achieving investor safety and capital market integrity for the next 50-plus years?

» Posted by Martin Weil on July 10, 2009

William White predicted the approaching financial crisis years before 2007's subprime meltdown. But central bankers preferred to listen to his great rival Alan Greenspan instead, with devastating consequences for the global economy.

White, until 2007 the chief economist for the Bank for International Settlements (BIS) in Basel, Switzerland, was "The Man Nobody Wanted to Hear."

» Posted by Martin Weil on July 09, 2009

Then Wall Street Prison Consultants (I am not making this up) is the place you need to call.

A sample: "Fedtime 101, is a unique SURVIVAL PROGRAM on Federal Prison life, that I designed and put together while serving time behind prison walls. Fedtime 101 provides, direct one-on-one counseling and guidance,to ensure you have a complete understanding of the issues lying ahead of you and your family.... My program's extensive, based on reality, and the personal hands on experience of surviving for ten years at all security levels of the Federal Prison System."