Sunday, March 6, 2011

Economic vertigo: $2B as small potatoes

S'morning's reading makes me dizzy.

First, was looking at a column by SF Chronicle business editor Andrew Ross (embargoed now; available here Tuesday) about the lack of perp walks in the financial crisis recovery. He quotes heavily from the indignation of "Inside Job" filmmaker Charlie Ferguson, interviewed at the Commonwealth Club, which, he notes, has posted over an hour of Ferguson's entertaining talk on YouTube here. There's also a bit from the club's separate appearance by Phil Angelides regarding the Financial Crisis Inquiry Commission report (seriously well-written good reading, by the way), and how everybody asks him why top executives aren't in prison. "Prosecutors need to do their job," Angelides says. Well, yes.

Then I got to the HUD Inspector General's semiannual report. It claims many accumulated successes in the millions of dollars, but crows most happily about its prosecution of executives at one middling mortgage company:
"Lee Farkas, a former chairman of Taylor, Bean & Whitaker Mortgage Corporation (TBW), an FHA-approved direct endorsement lender and Government National Mortgage Association (Ginnie Mae) issuer, was arrested after his indictment in U.S. District Court, Ocala, FL, for allegedly committing conspiracy and bank, wire, and securities fraud. Farkas and others were indicted for allegedly selling phony or previously pledged loans to investors in the secondary mortgage market and causing TBW to submit false statements to HUD and Ginnie Mae. HUD and these programs experienced almost $2 billion in losses."
The weirdness being that Farkas & Co., having cost us two billion dollars, are nowhere near the level Ferguson and Angelides are discussing.

[P.S. Sad bit, midway through the Ferguson interview: he says Obama Administration people, including some he knew personally, wouldn't talk to him for the film, not even off the record. Also, listening further, it's clearer that Ferguson, speaking the day before Angelides, was challenging Angelides to say more definitely that somebody ought to be under arrest.]

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