Skip to main content

View Diary: Wall Street's moral hazard (128 comments)

Comment Preferences

  •  american government cannot shrink european banks (2+ / 0-)
    Recommended by:
    Balto, Nailbanger

    Wonderful article, but i have found many crisis blogs and books neglect to point out that the major players, like Deutsche Bank, Credit Suisse First Boston, Barclays, BNP Paribas, the Royal Bank of Scotland, etc etc etc, are not American banks, and the American regulatory scheme means fuckall to them. When Michael Lewis wrote the Big Short, he was able to interview the people from several American hedge funds, and a fund that was inside of Morgan Stanley, but when it came to getting access to Gregg Lippman, the guy with 'im short your house' on t-shirts, who worked inside of Detusche Bank's CDO desk... well. DeutscheBank specifically forbade him from talking too much.

    Especially during the American Securitization Forum in Las Vegas the year or two before the crash -- Deutsche management REALLY did not want him talking during that time, because, as Michael Lewis points out, they were trying to sell the same securities that Lippman was shorting.

    Credit Default Swaps were created at JP Morgan - but in it's London branch. AIG wrote its CDS against CDO garbage in its Financial Products division - which was in London.

    It is truly a global world. Only going after American banks would be like only organizing your labor unions to go after American corporations... and that didn't seem to work very well, since they just shut down shop and move elsewhere.

    Am i insane?

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site