February 6, 2011
COULDN'T WAS THE POINT:
A damning post-mortem of the financial meltdown: Though few have paid attention, the Financial Crisis Inquiry Commission's conclusions clearly point out the failures by regulators — and the (un)regulated — to rein in excesses that predictably led to ruin. (Michael Hiltzik, February 6, 2011, LA Times)
Bankers were playing with novel credit derivatives the risks of which they couldn't calculate. When they got a hint they didn't care. Former Citigroup Chief Executive Chuck Prince told the panel that it would not have "excited my attention" to learn his bank held $40 billion in mortgage securities. The joke's on him: The firm's loss of more than $8 billion when that portfolio went south helped cost him his job.
It's worse than that--the intent of the derivatives was to hide the risk.
