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Because the investment banks took loans and repackaged them, then didn't do anything illegal. The most sketchy thing they were accused of was repackaging loans
by rr808 5y ago
Because the investment banks took loans and repackaged them, then didn't do anything illegal. The most sketchy thing they were accused of was repackaging loans when they should know the documentation was fraudulent, ie borrowers were lying on their forms. Its a long chain of paper pushers who are blaming each other, I'm not convinced anyone is worse than the others, just GS is most famous.
- bcrosby95 5y agoActually, the transfer and repackaging of loans was not done legally, and courts had to rubber stamp massive amounts of backdated paperwork when cleaning up the mess so the houses could actually be foreclosed upon.
- worik 5y ago> Because the investment banks took loans and repackaged them, then didn't do anything illegal. They did very illegal things. They lied, flat out lied, to their customers about what was in the financially engineered structures. Lied. That is a crime (in civilised jurisdictions, and in the USA)
- rr808 5y agoPlease tell me which customers you are talking about? Is it the hedge funds who bought billions of CDOs but says they didn't understand what they were? Are they the people you're concerned about.
- worik 5y agoThe banks they sold them to. And yes, the hedge funds. They misrepresented these products. The learnt that the ratings agencies had made a mess of the rating too late, they were on the books. So they sold them as fast as they could, lying to the customers. It does not matter if the customer was a hedge fund, a bank, or you. Lying about financial products is a crime.