From Jesse’s Cafe Americain: http://jessescrossroadscafe.blogspot.com/
William Seidman on culprits of the financial crisis
By George White
November 10, 2008 at 4:50 PM
L. William Seidman, former chairman of the FDIC and the Resolution Trust Corp., was the lunch speaker at the Securities Industry and Financial Markets Association’s Summit on the Troubled Asset Relief Program Monday afternoon. As chair of the FDIC during the last financial crisis, Seidman started off by reassuring the audience that the crisis would pass, but he quickly focused on the seriousness of the situation.
“These things do go by,” he said, “but that’s not to take away from the fact that this is the worst financial crisis since the Great Depression. In one sense it’s worse than the Great Depression, since it’s far more complicated for governments to handle.” (Hey didn’t Greenspan call a bottom last week? LOL – Jesse)
Seidman then went on to list the main reasons (in no particular order) for the crisis:
1. The Securities and Exchange Commission for loosening capital requirements
2. Fannie Mae for entering into subprime lending
3. Rating agencies for rating paper with which they had no experience
4. Robert Rubin and Alan Greenspan, who went to bat to prevent the commodities exchange from regulating derivatives (add Phil Gramm and wife here)
5. The Federal Reserve for increasing the money in the system and refusing to regulate mortgage brokers
6. Securitization and himself
“The nuclear weapon of this situation has been securitization. This was invented by myself and the RTC, so I add my name to this list as well,” Seidman said. “The exception is that we kept a piece of it ourselves back then; that part was lost when others started doing it.”
Bill is being far too humble and self-effacing by naming himself for merely developing the concept of securitization as part of his work at the Resolution Trust Corporation during the S&L crisis. Taking the blame for what followed at the turn of the century is like blaming the inventor of television for CNBC. Wall Street is capable of perverting almost anything into a vehicle for financial chicanery and fraud.
