Charlie Rose

blue70531  12/07/2011 04:01 AM Report

blue70531 12/07/2011 02:46 AM Report

The fraud on at Goldman Sachs was that the cards were marked and not more than a dozen people could read the markings. Paulsen arranged tranches according to: Liars Loans, No-Doc Loans, Missed-First-Payment Loans.

It was the ratings. The buyers thought the triple A ratings were Aces. Paulsen was valuing them according to information unavailable to the general market.

NeilMacCallister  04/11/2010 06:52 AM Report

I notice Mr. Lewis' book shares a front-cover 'fishhook' art with the Vance Packard book 'The Hidden Persuaders', within which Mr. Packard discusses the Riesman view of Americans as "spectator-consumers".

Hasn't it been true that since the 1950's, we American "spectator-consumers" have increasingly received more and more of our wages in the form of tax-sheltering health and retirement plans?

That has resulted in 30 million "spectator-consumers" found standing outside the investment bank each month waving a $500 investment credit, wondering what they should do with it.

Bernie Madoff and others were there to help them to decide, and did so in a way which helped their investment bank make a large share of side-money for itself.

And too many of the "paycheck-investors" ended up with nothing left.

Perhaps we "spectator-consumers" should have cared less about avoiding taxes, and the transient excitations of pick-n-chose investment gamblings, and just taken our wages as dollars, paid a fair tax, and put the rest in our neighborhood banks' savings accounts (ensuring money for our health needs and our retirements).

..and then went and played ball with our kids.

jphelan  04/09/2010 06:31 PM Report

I may have missed it but I did not hear Michael discuss the role of Fannie Mae and Freddie Mac in purchasing low quality mortgages and then reselling them. They did this because Congress encouraged increasing home ownership. Thus government created incentive for banks to approve loans to unqualified, or risky borrowers. Since they were going to off load the risk onto government they were less cautious reviewing documentation of borrowers income, etc.

Add to this the Fed's action to keep interest rates low (by increasing the money supply)allowing developers to borrow and build more homes. When the supply of new homes exceeded demand, the bubble burst and home prices fell. Equity growth went south and home owners defaulted as they ended up with negative equity in their homes.

The financial reform bill in the Senate does not address the cause of the crisis as far as I can tell. Are we headed for another housing bubble given the recent actions of the Fed to keep interest rates low and by keeping Fannie and Freddie alive and well?

robdverity  03/18/2010 05:29 PM Report

REMants back. It's all rather futile. Like trying to ignore Darwin. Any species that would tolerate first, what they did, and second, letting Hank Paulson (in the biggest heist in history with or without a gun) pass it on to our children - and theirs, and theirs . . . . The moral hazard hazard would be greatly impeded (not obliterated) by his arbitrary incarceration (no trial). Just for crimes against humanity - the species - that's too dumb to survive. Too dumb for anarchy even when it's the only obvious recourse.

doodahdaze  03/18/2010 03:03 PM Report

I like this guy. He gives the wall street financial crowd, a kind of little , Forrest Gump innocence. How nice, what a sweet story. :). And on a beautiful Spring day, no less. I think I'll go prance through the flowers and leave my troubles behind.

doodahdaze  03/18/2010 02:55 PM Report

So Hank Greenberg was overstating the role of short sellers and 'rumors'. .. That's pretty much what I thought; executives are so full of shit.

Didn't we go through this shit before, with the Enrons and MCIs and Arthur Andersons, and etc. etc. etc..?.???

doodahdaze  03/18/2010 01:57 PM Report

Even though I can't proove it (yet). In my gut, I KNOW many many of these financial wise guys damn well KNEW what was going down, not just when it happened, but BEFORE it happened. They used that 'Communinity Initiativive Homeowner Whatever' as an excuse to let it AND encourage it to snowball so far. The worse it got, the BETTER 'the crisis' got, for THEM. It's ALL about THEM. In the end, the government would put the money back in their hands and let them do it again. Thanks to all their spys (banker lobbyists) running around Congress.

doodahdaze  03/18/2010 01:38 PM Report

"... is it politically doable?"

That means, will the BANKER-LOBBYISTS stone-wall Volcker's solution?. .. In favor of continuing their little self-flattering rigged Monopoly games, at the expense of the REAL professions whose real work is the real value that they want to 'play' with. Just as their ivy league professors taught them to do. .. A bunch of dam self licenced bloodsuckers.

Just do what Volcker tells us to do. NO MORE!!! AND! NO LESS!!! Nobody else has the combination of experience, depth of mind and INTEGRITY, to figure it out without his own selfish interest at heart.

Realpolitik  03/18/2010 07:44 AM Report

Hopefully, we are seeing a retreat from the idealogy that Market Fundamentalism resolves everything in the long run. As John Maynard Keynes said "In the long run, we are all dead." Most idealogues I know, when confronted with real data, retreat into Founding Father quotes.

JLRmapman  03/17/2010 10:55 PM Report

Interesting guy! - Finally, a change from the recent string of boring 'authorities'

I wish I could force all my conspiracy-seeking friends to watch this particular interview.

Whether its this, the invasion of Iraq or any other great debacle including all the small personal ones, it seems to always come down to our infinite capacity for self-delusion and group-think.

Wasn't there someone on this show once who said something like: 'A good idea is simply the sudden cessation of stupidity.

Great passage from Tolsoy. I,ll have to put that on my Facebook.

doodahdaze  03/17/2010 01:01 PM Report

That was profound. .. I'll watch the interview later.

REMant  03/17/2010 12:12 PM Report

I enjoyed this tho it came at the tail end of a very long and trying day. I watched the interview on 60 Mins Sunday nite as well. The only thing I have say is that the psychology of people who believe in "new economies," etc has long been dealt with. Perhaps not as well as it might still be, but well enough. In recent years "Devil Take the Hindmost: A History of Financial Speculation" by Edward Chancellor comes to mind, published in 1999. But there's the work of Galbraith, Kindleberger, and Frederick Lewis Allen. More recently Chancellor called the US a Ponzi nation. This come close to the nub. At the base of all commercial banking is the idea of creating unsupported credit (ie, ahead of savings) and paying back the investor out of the the returns. It is an expression of hope, of enthusiasm, a mania. If as a result of creating the credit, the return necessarily increases as a result of inflation, then it is a sure thing. As sure as the Fed shoveling money under the table to refloat the remaining Wall St firms. This is what banks around the world have been doing for centuries when they keep only a fraction of deposits in reserves and still guarantee withdrawals. As a result since banking began we have had steady inflation. The inflation creates more inflation, the debt creating more debt - all of our money these days is debt - and as everyone knows the thing to do in an inflationary environment is to circulate money as fast as possible, and sink as much as possible into assets, commodities, real estate and the like. Debt involving these would be deemed twice as attractive, and everyone assumed that the process which had driven up home prices several hundred times what they had been half a century ago would be the very best investment. Indeed, it was backed by the Federal government itself and woven into the American myth of the independent yeoman and middle class. But not everyone makes enough to invest in such things, which has vastly increased the drag on the "safety net," as inflation prices them out of more and more markets, increasing the transfer of manufacturing and services overseas, which, in a vicious circle feeds on itself, not least because the imbalance of payments is used to buy government bonds which keeps the long term interest rates that govern mortgage costs artificially low. The more credit is extended, the more people believe they deserve it and the more they need it. In addition, easy money creates slack, a decrease in the discipline of the marketplace as envisaged by classic Liberalism, and an increase in the idea that the world works by scratching each others' backs, which unfortunately latter-day Keynesian saints view as economic growth. I hope I've made my point. The real issue in all this is the moral hazard. Not just of some bond rating agencies or proprietary traders, but of the public at large, and not just on Wall St, but pretty much the world over.