Tuesday, April 12, 2011

Report on Subprime Mortgages by US Senate

The Senate Permanent Subcommittee on Investigations is to release a report soon on securities firms  who bet for and against subprime mortgages by creating Collateralized debt obligations (CDOs) (i.e., investment baked by pool of mortgage bonds) of subprime loans and selling them as stellar investments (with the help of the top 3 US rating agencies) to some and to others saying they were "crap" and betting against them --- all the while making fees on both sides of the coin.


One such "investment vehicle" (i.e., like the pinto-explosive).

The humor (if you can call it that) to all this is that everyone who conceived and carried out this sham on the investment world are probably still living and employed in the investment world.

I would categorize the investment community two ways - dumb and dumber!

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