Comment by falsestprophet | Hacker News Reader

Comment by falsestprophet | Hacker News Reader

Jon Stewart's thesis is that teachers are punished for crimes and "Wall Street" is not.

In this segment he singularly cites the actions of loan officers soliciting incorrect information comparing their actions to teachers falsifying test results.

First of all, loan officers are hardly "Wall Street" fat cats. They are low level employees who are paid an average of $50,000 [1] and do not work for "Wall Street" firms like investment banks.

Secondly, loan officers operate throughout the United States rather than actually on Wall Street or in Manhattan and, as a group, are subject to the jurisdiction of the federal government, 50 states, and 3,144 counties each with independent prosecutors (elected state's attorneys, district attorneys, etc.).

If none of the thousands of entities who could have brought cases have done so, either there is conspiracy vaster than any other or there are not credible cases to bring.

[1] http://www.glassdoor.com/Salaries/loan-officer-salary-SRCH_K...

Teachers, Garbage men... The DA and judges in Atlanta love to throw low level employees in jail for doing their jobs. Maybe they are too dumb to realise that these employees more or less do what they are told.

No one below the district level should have been on trial for this.

I agree with you to hold the actual loan officer liable is dumb. They were following directions.

[1] http://fox17online.com/2015/03/09/garbage-man-to-spend-30-da...

So knowingly cheating in order to get a bigger bonus for themselves isn't criminal because they were told to do it? Pretty screwed up world you live in from an ethics perspective, but then I've heard all sorts of "they might be crooks but they shouldn't be held accountable for it or anything" sophistry around this case.

Being told by an authority results in people going against their morals for the majority of people. Look up the Milgram experiment.

>Being told by an authority results in people going against their morals for the majority of people.

I think it's somewhat simpler: for a lot of people, obeying authority is their morality.

1. Cheating on some childrens exam should not even be a criminal offence. If people went to jail for fluffing up their progress we would all be in jail.

2. Disobeying your boss is usually not a good career move. This is not an ethics issue this is a "do you want to pay rent this month" issue.

3. Why not quit? A software engineer in the valley could go downstairs and work for another software company, a teacher would have to relocate to find another employer because the local district controls 95% of the local teaching jobs.

1) It wasn't a "some" children, it was hundreds. It wasn't "fluffing", it was done to extract bigger bonuses they were not entitled to. Theft is a criminal offense. 2) They had a teachers union to protect them; they could not be summarily fired without due process. And if you don't see "I'll do anything to pay the rent", even if that was the case here, as "not an ethics issue", I suggest you learn something about ethics. 3) There are, what, a dozen distinct school districts in the metro Atlanta area. So, yet another specious argument.

I get that some people want to paint this as a "poor put upon teachers at the mercy of evil administrator". It's an even more compelling narrative for the defense now that the head evil administrator is dead and can't be called into court. But what the trail showed was this was a bunch of teachers who got together as a group and said "We'll get a bigger bonus if we fake these test scores. If that hurts kids so be it and management has our backs".

Loan Officers get a percentage of the loan amount, and it's not rare for them to make $300k/year in a good year.

Where do you live that it's "not rare" for the loan officer of a suburban bank originating mortgages to be making north of a quarter million dollars?

That's what I was wondering. I know a couple that were both loan officers before the market crashed. If they were making (individually) six figures I'll eat my hat.

I live in SF, but it's any midsize market (or larger) really. Loan officers are effectively sales people, they eat what they kill. The better ones have teams working for them in a sales-support capacity.

Its the same with real estate agents, a good one can be very wealthy. Some LOs hit annual comp > $1M, though that is rare. I found it pretty shocking when I first found this out.

Send me an email if you want to make the market more efficient, I'm working to build a modern mortgage bank :)

It's a tough case to make but you can say loan officers were pressured by their managers to falsify info. Managers were pressured by their higher ups. Eventually it comes back to Wall Street firms who were lusting over subprime mortgages so they could make more commissions.

Step 1: Loan officers pressured by their managers.

Step 2: Managers pressured by their higher ups.

Step 3: ???

Step 4: Profit (for Wall Street firms lusting over subprime mortgages).

In a nutshell why this has been so difficult to prosecute.

The reason is that it was a systematic structural problem. Instead of picturing that chain of command (the one you just listed) inside one organization. Imagine EACH step of that chain is actually a different organization that handles one part of that chain of command. Its like if people want euthanasia in Spain, they distribute the task of getting the arsenic among 20 people so none of them can be prosecuted for a crime. One person takes the vial from 20th street to 15th street. One person enters the building. One person walks up the stairs. etc. Their individual part is so small and they have no knowledge of other parts; it's hard to prosecute them for murder. Finance is kind of like that too. They split everything up; it's hard to prosecute.

Thiel should start focusing his network analysis tools on the internal workings of finance corporations instead of merely using it to create models to predict default risk.

Who profits? The banks that just issued risky loans, packaged them into CDOs and held onto the risky tranches?

(Typical names in that space were WaMu, BofA, Countrywide and Citi.)

Prior to the market imploding these guys were making huge sums off commissions selling to mortgages to the "clients."

A third possibility is simply that there is no political benefit to prosecuting mortgage brokers and the home buyers who colluded with them to get banks to issue risky loans. Think about it - you are a prosecutor in a county with tens of mortgage brokers, thousands of home buyers and 0 banks. What political benefit do you gain from it?

While I hate the plea bargaining system, this would be a great opportunity to use it to get at those up at the top. Use the $50k a year people to get the managers. Use the managers to get their managers, so on and so forth. Anyone at the very bottom that takes the plea gets off scott-free. As you move up the food chain, you hand greater sentences.

Why is something that you profess to hate suddenly acceptable in this situation?

Honestly, I would be okay with plea bargaining if the only bargain that could be offer the DA could make is getting off completely, not a lesser sentence. Perhaps a reasonable fine would be okay if it were enough to teach someone the risk isn't worth the reward, but not so high that it screws them for life or bankrupts them. Either way plea bargains shouldn't involve lots of jail time vs less jail time.

Why do you keep putting Wall Street in quotation marks?

Because not a lot of financial work is actually being done on Wall St. anymore, IIRC it mostly moved north.

The stock exchange even looks emptyish nowadays because it's all done online.

http://www.marketwatch.com/story/this-is-the-last-photo-well... South, not north, my bad.

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