Identifying a "direct cause" of the 2007-2009 financial crisis, with certainty exceeding 90-95% (the "reasonable doubt" threshold) would be worthy of a Nobel Memorial Prize, in my estimation.
b) the senior executives at institutions like bear stearns who signed off on creating the mortgage backed securities and their known composition of shit mortgages.
c) the senior executives at the rating agencies who knowingly rated shit bonds as AAA.
d) senior executives at institutions like Countrywide which pumped the shit mortgages into the market.
In other words, bond ratings may not be the cause, but still be a cause.
If I sell you a crappy asset (imagine a company almost going bankrupt) for $10m and you don't do proper due diligence on said asset, then you have no right of complaining afterwards. No one is going to do your homework.
If you know it is a crappy product, and don;t warn me, it is at the very least a SEC violation, punishable. Could also be viewed as fraud, and pursued as a crime.
They knew through sheer logic that one of these positions was by deduction not tenable.
But they went for it anyway, collecting commissions on both sides.
Even the Enron case, which was a pretty clear case of fraud, took the government 5 years to build a case and win in court.
So, while all of those things you mention do indeed sound bad, they are incredibly difficult to prove in a criminal trial.
I can knowingly sell you a crappy car, and if you sign an agreement that you bought and accepted the good in its current state, that's that. Yes, I acted unethically, but I didn't defraud you.
Second, a successful prosecution requires proof beyond a reasonable doubt that a specific person performed each element of specific crimes. Defendants do not need to even present a defense--and in fact sometimes do not, relying entirely on poking holes in the government's case.
Now that's obviously not a terribly smart idea. But there's simply no way to blame any single individual when none of them had the power to the system by themselves. I mean: quite obviously the companies being rated would have loved for others to bear the costs for it.
There are organizations, financial institutions, executives, investors, businesses, etc. that did not deserve jail, but did deserve to lose financially.
Instead, some lost their sort and others were shielded with $100,000,000,000s of taxpayer money.
The kinds of people that supported this flagrant graft are despicable. Probably not jailable (I mean most politicians and even the president supported bailing out asset holders), but more despicable than Zuckerberg or most of the scapegoats you see in the news.
How do you figure? Smells like a p value taken from a science class, not anything related to a legal definition of reasonable doubt.
https://www.google.com/search?client=ubuntu&channel=fs&q=wor...
the dotcom 1.0 crash had a lot of irrational exuberance, where VC money was raised and pissed away for ideas that wouldn't work at the time (beenz, flooz, pets.com, webvan, etc). Then there was the outright fraud like Enron and Worldcom.
How is that comparable? Holder even stated, "I am concerned that the size of some of these institutions becomes so large that it does become difficult to prosecute them" because it might damage the economy. That is not an aspect the AG should be considering. They should be upholding the rule of law which did not occur after the 2008 crisis
Right after that, the questioning continues:
> Grassley: Do you believe that the investment bankers that were repackaging bad mortgages that were AAA-rated are guilty of fraud or is it a case of just not being aggressive or effective enough to prove that they did something fraudulent and criminal?
> Holder: We looked at those kinds of cases. I think we have been appropriately aggressive, these are not always easy cases to make. When you look at these cases, you see that things were done ‘wrong’ then the question is whether or not they were illegal. And I think the people in our criminal division… I think have been as aggressive as they could be, brought cases where we think we could have brought them. I know that in some instances that has not been a satisfying answer to people, but we have been as aggressive as we could have been.
He also says:
> Holder: You are right, senator. The greatest deterrent effect is not to prosecute a corporation — although that’s important — the greatest deterrent effect is to prosecute the individuals in the corporations that are responsible for those decisions.
He's saying the opposite of what you're claiming he said: that he tried to prosecute the "bankers" as aggressively as he could, but the cases were "not easy to make."