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Comment by mayukh | Hacker News Reader

Call me jaded but nothing is going to come off this. Not one single person from any of the wall street firms has gone behind bars for the massive amount of fraud and deception that caused the financial crisis. Worst case there will be a fine paid by a few firms (which is probably going to be less than some of the bonuses they dole out). The best part about these fines is that firms get to declare "No admission of any wrong doing". Really ?

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Perhaps something will:

Senator Carl Levin, releasing the findings of a two-year inquiry yesterday, said he wants the Justice Department and the Securities and Exchange Commission to examine whether Goldman Sachs violated the law by misleading clients who bought the complex securities known as collateralized debt obligations without knowing the firm would benefit if they fell in value.

The Michigan Democrat also said federal prosecutors should review whether to bring perjury charges against Goldman Sachs Chief Executive Officer Lloyd Blankfein and other current and former employees who testified in Congress last year. Levin said they denied under oath that Goldman Sachs took a financial position against the mortgage market solely for its own profit, statements the senator said were untrue.

http://www.bloomberg.com/news/2011-04-14/goldman-sachs-misle...

Was financial melt down even caused by CDO's? It was caused by sub prime mortgages mainly by Fannie and Freddy and everyone knows that however people those who are in power want to look other way because they want to continue with that, finally they have to put the blame on something, and this is something.

Sub-prime mortgages - even in the billions - were not enough to cause total financial implosion. However, CDO's (the value of which exceeded, I believe, $45 trillion), most certainly could.

So yes, yes, a hundred times yes. Fraudulently-rated CDOs were the heart and soul of the Crash. That, and extreme regulatory capture (which is something else that people who can't even afford home payments are unlikely to buy).

If this moves forward, I expect Mr. Levin's tragic death in a small plane crash.

Edit, apparently people are not familiar with cases like that of Paul Wellstone, or documentaries like "Conspiracy of Silence"

Maybe people are just tired of the stupid conspiracy theories that seem to run rampant throughout the tech community.

Maybe if people weren't actually dying mysteriously when they were opposed to totalitarian / oligarchs, then we'd stop bringing it up.

I understand the sentiment behind this grousing, but I do not understand the practical value of voicing this cynicism.

Surely you don't think reports like this should never be produced and disseminated?

Don't get me wrong, I strongly want to see some folks go to jail. But saying "crooks need to go to jail" is a far cry from saying "nothing is going to come of this". One statement is assertive and explicit, the other is defeatist and ambiguous.

How did "fraud and deception" cause the financial crisis? Do you have a specific criticism?

Or is your complaint merely "those guys in suits did stuff I don't understand, and OMFG bad economy, I need a scapegoat!"

Actually, it's more like "those guys in suits did something they didn't understand (re mortage backed securities, plenty written about this) yet still got a get out of jail card aka fed bailout"

Well, to a degree, they personally didn't get a bailout. (Speaking more for the UK as I'm here so know it better.) Their business model was flawed, they went bust, we bought them up quickly to protect their customers, which ends up impoverishing the bank's previous owners who had allowed it to operate so recklessly.

This isn't to say I don't think bits of the relief work for the banks could've been done better, but it wasn't exactly a free gift to them.

No purchasing or nationalization happened in the US. The people who made the bad bets just got public money with essentially no strings. They did not get acquired, the same people maintained control and are now paying themselves about the same as before.

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