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| A Memo Found in the Street (pdf) |
| 2008-09-28 |
| By BARRY L. RITHOLTZ To: Washington, D.C. From: Wall Street Re: Credit Crisis Dear D.C., WOW, WE'VE MADE QUITE A MESS OF THINGS here on Wall Street: Fannie and Freddie in conservatorship, investment banks in the tank, AIG nationalized. Thanks for sending us your new trillion dollar bailout. We on Wall Street feel somewhat compelled to take at least some responsibility. We used excessive leverage, failed to maintain adequate capital, engaged in reckless speculation, created new complex derivatives. We focused on short-term profits at the expense of sustainability. We not only undermined our own firms, we destabilized the financial sector and roiled the global economy, to boot. And we got huge bonuses. But here's a news flash for you, D.C.: We could not have done it without you. We may be drunks, but you were our enablers: Your legislative, executive, and administrative decisions made possible all that we did. Our recklessness would not have reached its soaring heights but for your governmental incompetence. THIS MEMO PROVIDES A BRIEF HISTORY OF your actions that helped create this crisis. We on Wall Street do not deny our part. rtwt at link for a 10 year history. A lot of this remains and needs to be fixed. We created these securities, we rated them triple-A, we traded them without understanding them. Now that they have gone bad, we are real close to getting the rest of the country to take them off our hands. Thanks, D.C. None of this would have been possible without you. Very truly yours, Wall Street In my opinion, the greatest fault with the $700 billion bailout is that it encourages more moral hazard on the part of the financial community and our whole culture. No one is held responsible. No one will suffer for their individual greed and error. But everyone will suffer to the tune of $ 2,300 for every man woman and child to fix it. And that's just for starters. There needs to be a lot more judgment of and consequences for these malefactors as individuals. If it doesn't start till after November 4, that's OK with me. But it's time people were held responsible for the errors on their watch. Should have started with Tennant and Mueller. Casey and Abazaid. There will be consequences for these failures. What is being debated in Washington is who bears the burden of those consequences. The current plan does not allocate the burden appropriately. I prefer inaction to this plan. |
| Posted by:Nimble Spemble |
| #13 well, at least they aren't Democrat office-holders. |
| Posted by: Frank G 2008-09-28 17:55 |
| #12 Some of my best friends are crack 'hos..... |
| Posted by: Alaska Paul 2008-09-28 17:51 |
| #11 Of our instruments of power, Diplomatic, Informational, Economic, and Military, we as a nation are broken on three fronts. Sad situation. JQC is right, Nov 4th is a very important day. |
| Posted by: 49 Pan 2008-09-28 16:22 |
| #10 Congress needs to be jailed. Every one of the - or hung I don't care. Then, term limits. Then you can replace the personnell |
| Posted by: Hellfish 2008-09-28 14:15 |
| #9 LOL Frank! You are right. I apologize to crack whores everywhere. |
| Posted by: JohnQC 2008-09-28 13:59 |
| #8 1) Treasury officials are saying if it doesn't happen, the stock market could lose 1/3rd of its value in short order. That would be okay, short lived, and a great buying opportunity. Maybe if we spent the time it takes for the stocks to fall investigating who is at fault here, democrats, democrats, democrats, and democrat supporters, just maybe we can elect a responsible Congress in November. This is the result of corruption and immoral behavior. Without a full accounting and corrective measures, nothing is gained. We are at opportunity's door and it is open. |
| Posted by: lollypop 2008-09-28 13:36 |
| #7 Quit slandering crack whores, dammit |
| Posted by: Frank G 2008-09-28 13:30 |
| #6 Many of these Congress Critters are like crack whores who will do anything to feed their habit. With these Congress Critters votes, money and power = crack. Not all of our Congress fits into this category but we should remember all that do on November 4th and then again, again, and again at each subsequent election until these Toxic Congressmen/women are removed from the taxpayer-financed Congress welfare roster. |
| Posted by: JohnQC 2008-09-28 13:27 |
| #5 So the big question is not really one of moral outrage. It is, "Will it work, and if not, then what?" Ironically, this is only a rhetorical question, because it won't work. It is a band aid over a bullet hole. Because the problem is moral and the proposal doesn't address the problem. That's why moral outrage is an appropriate response. |
| Posted by: Nimble Spemble 2008-09-28 12:22 |
| #4 In the last three days, conservatives have turned against this deal big time. While I generally agree that it is blackmail, and damned unfair, to make matters worse I will mention two things: 1) Treasury officials are saying if it doesn't happen, the stock market could lose 1/3rd of its value in short order. And, 2) It is unlikely it will work in any event. So the big question is not really one of moral outrage. It is, "Will it work, and if not, then what?" Ironically, this is only a rhetorical question, because it won't work. It is a band aid over a bullet hole. |
| Posted by: Anonymoose 2008-09-28 12:20 |
| #3 rtwt. They weren' blind and they didn't look the other way. They were a prime contributor helping to spread the corruption. Think CRA, repealing Glass Steagal, failing to fix Fan and Fred, appropriating more for the Smithsonian than the SEC. The list goes on and on. They're as guilty as Wall Street. That's why Wall Street gives them so much money. Coongress of Whores led by the Slut of the House. |
| Posted by: Nimble Spemble 2008-09-28 12:08 |
| #2 ...they were just too stupid to see this coming. Nah, there's a difference between being blind and looking the other way. Best Congress money can buy. |
| Posted by: Procopius2k 2008-09-28 11:59 |
| #1 Typical of wall street and current America. "It's not my fault". It IS wall street's fault. Not our Congress, they were just too stupid to see this comming. When 30% loans were allowed, I did not buy. My home loan is fixed and affordable, not an interest only or ARMM. Wall street needs to stand up and be accountable for their greed. |
| Posted by: 49 Pan 2008-09-28 11:15 |