HOME | WHAT IS SOCIO TIMES? | CONTRIBUTE | ARCHIVES |
Pete Kendall's Socio Times: A Socionomic Commentary
CULTURAL TRENDS | SOCIAL CHANGE | MARKETS | ECONOMY | POLITICS


BREAKING NEWS
May 15, 2007

Attorney General Targets Wall Street
Ohio Attorney General Marc Dann, likening the subprime lending industry to armed robbers, said he wants to sue Wall Street firms because their bond sales enabled consumers to get mortgages they couldn't afford.

Ohio has already won the right through a lawsuit to review foreclosures by New Century Financial Corp., the bankrupt California-based lender. Dann may add investment banks and credit-rating firms to the case or bring new suits, perhaps using Ohio's civil version of the federal Racketeer Influenced and Corrupt Organizations Act, he said in an interview today. The RICO law is used to target organized crime and drug rings.

``If somebody was buying guns and giving them to people to go and take people's houses at gunpoint in Ohio, we'd be prosecuting them and throwing them in jail,'' Dann said.

Ohio has the nation's highest foreclosure rate, in part because manufacturing losses have left the state with the sixth-highest jobless rate. About 3.38 percent of Ohio homeowners with mortgages faced foreclosure as of Dec. 31, the Mortgage Bankers Association reported, compared with 1.19 percent nationwide.

Securities firms encouraged ``irrational loans'' to be made, Dann said, by providing a liquid market in which mortgages were bundled by the thousands and sold as securities.

``I want to see the e-mails, I want to see the documents,'' he said. ``I'm guessing somebody at some or all of these places was predicting the bottom was going to fall out.''

``We are sympathetic to the difficulties that some Ohio homeowners and pension funds have encountered,'' said Chris Atkins of Standard & Poor's. The company's ratings on mortgage bonds -- which Dann alleged understated risks -- aren't supposed to address the ``suitability'' of securities as investments for specific buyers, or of mortgages for consumers, Atkins said.

``We've got to do something to avenge those homeowners and to deter this type of conduct in the future, and hopefully create a pool of money to restore some of these folks to homeownership,'' Dann said.
Bloomberg


May 2007
S M T W T F S
    1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31    

« Previous | Main Page | Next »

You Could Have Read It Here First, Mr. Attorney General
Category: NEWS
By: Pete Kendall, May 17, 2007
After a major bull market peak, acceptance and trust engendered by the optimism of rising share prices gives way to suspicion and control. At really big turns, it’s not hard to see—unless you are blinded by the anger and recriminatory impulses of the bear market.
The Elliott Wave Financial Forecast, July 2006
It looks as if the regulatory repercussions of the mortgage meltdown are beginning in earnest in Ohio.  No Congressional show hearings or cosmetic regulatory changes for the state attorney general.  He's going after the lenders and possibly the securitizers with RICO.  At the federal level, that would allow recovery of treble damages; not sure it the state law is the same.

I particularly like the phrasing "We've got to do something to avenge those homeowners..."  That sure sounds like the anger and bloody-mindedness that come with a bear market.  And true to form, actual guilt may not matter at all since "The state may seek damages from mortgage companies and investment banks even for ``purely criminal'' situations in which borrowers committed frauds against lenders..."
--Deron Kawamoto

Whatever happened to caveat emptor, free trade, personal responsibility and pulling one’s self up by one’s bootstraps? Oh yeah, those are the concepts that take hold in a healthy bull market.

Post a comment




(you may use HTML tags for style)

RECENT ARTICLES
May 21, 2007
Girl Power Hits Shrek III
read more
May 18, 2007
As Inflation Gets Stamped Out, Drivers Hit the Brakes
read more
May 17, 2007
You Could Have Read It Here First, Mr. Attorney General
read more
May 15, 2007
From Near Nation to Gangs, Gaza Reflects the New Order
read more
May 14, 2007
Early Trading Post Marks the Spot 'Where It All Started'
read more

ARTICLE COMMENTS
"Whatever happened to caveat emptor, free trade, personal responsibility and pulling one's self up by one's bootstraps?" It was outlawed by the nanny state.
Posted by: Eventhorizon
May 17, 2007 02:44 PM



HOME | WHAT IS SOCIO TIMES? | CONTRIBUTE | SEARCH    Copyright © 2024 | Privacy Policy | Report Site Issues