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If they artificially manipulated the stock themselves and hid their interest in the company to the degree where holdership limits were broken, yes. You also ha

If they artificially manipulated the stock themselves and hid their interest in the company to the degree where holdership limits were broken, yes. You also have to realize what sort of lending put the banks under. Using their influence in the banks they directed the loan officers to make out unsecured loans to their own companies. That was a big part of the banks all failing simultaneously.

cm2187 11y ago
Exactly, but that's Enron style fraud. It's not fraud that caused the financial crisis. It is the excess of leverage, and the complacency in lending and the way balance sheets were funded. I am not saying it wasn't moronic, just not criminal.
- Beltiras 11y ago
  There were rules that were supposed to prevent such overleveraging that they skirted by hiding their interest in the bank. The holding companies were so transparent about it that they had silly names like Drawercorp and (I shit you not) Twisty (The Icelandic name is Vafningur, it kinda translates)
  - JumpCrisscross 11y ago
    > There were rules that were supposed to prevent such overleveraging that they skirted by hiding their interest in the bank. To clarify, executives at Bank created a Holding Company. Bank lent Holding Company $100. Bank then sold Holding Company Bank stock for $100, thereby manufacturing $100 in "equity". This "equity" makes Bank's debt/equity, and other equity-based leverage ratios, look rosier than they are. I recall a similar shit show going down around Karzai's cronies in Afghanistan.
- crdoconnor 11y ago
  >It's not fraud that caused the financial crisis. Fraud wasn't the initial spark, but it was what turned the American 2008 housing market slump from a self contained bust into a global financial crisis.
  - JackFr 11y ago
    That is simply wrong. The US housing bubble, while experiencing fraud at the margins, was neither a cause nor an effect of fraud. The bulk was really due to too much money chasing too few assets, and a bunch of foolish decisions made in good faith by both borrowers and lenders. The idea that fraud lead a US housing bubble to cause a real estate bubble in the UK and Spain, and a banking crisis in Iceland and Ireland is just not correct.
    - tim333 11y ago
      >foolish decisions made in good faith by .... lenders I'd dispute that. Often it was a smart and cynical decision by lenders to make bad loans, take the bonuses and commissions and leave the government and others to clean up the mess. If you were to pin the blame on one group I'd say it was mostly the governments fault for under regulating this stuff.
deleted 11y ago
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cm2187 11y ago

Exactly, but that's Enron style fraud. It's not fraud that caused the financial crisis. It is the excess of leverage, and the complacency in lending and the way balance sheets were funded. I am not saying it wasn't moronic, just not criminal.

Beltiras 11y ago
There were rules that were supposed to prevent such overleveraging that they skirted by hiding their interest in the bank. The holding companies were so transparent about it that they had silly names like Drawercorp and (I shit you not) Twisty (The Icelandic name is Vafningur, it kinda translates)
- JumpCrisscross 11y ago
  > There were rules that were supposed to prevent such overleveraging that they skirted by hiding their interest in the bank. To clarify, executives at Bank created a Holding Company. Bank lent Holding Company $100. Bank then sold Holding Company Bank stock for $100, thereby manufacturing $100 in "equity". This "equity" makes Bank's debt/equity, and other equity-based leverage ratios, look rosier than they are. I recall a similar shit show going down around Karzai's cronies in Afghanistan.
crdoconnor 11y ago
>It's not fraud that caused the financial crisis. Fraud wasn't the initial spark, but it was what turned the American 2008 housing market slump from a self contained bust into a global financial crisis.
- JackFr 11y ago
  That is simply wrong. The US housing bubble, while experiencing fraud at the margins, was neither a cause nor an effect of fraud. The bulk was really due to too much money chasing too few assets, and a bunch of foolish decisions made in good faith by both borrowers and lenders. The idea that fraud lead a US housing bubble to cause a real estate bubble in the UK and Spain, and a banking crisis in Iceland and Ireland is just not correct.
  - tim333 11y ago
    >foolish decisions made in good faith by .... lenders I'd dispute that. Often it was a smart and cynical decision by lenders to make bad loans, take the bonuses and commissions and leave the government and others to clean up the mess. If you were to pin the blame on one group I'd say it was mostly the governments fault for under regulating this stuff.

deleted 11y ago

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