Why not arrest CEOs behind the money mess?

[OhioChick]

And what's in the bailout package for homeowners facing foreclosure?

MSNBC
updated 7:33 a.m. ET, Mon., Oct. 6, 2008

The government's historic $700 billion plan to rescue the creaking financial system, signed into law by President Bush on Friday, has prompted a flood of questions. More than a few readers are wondering, why can't we just find the executives responsible for this mess, round them all up and throw them in jail?

What about consequences faced by the CEOs of these companies? This did not happen overnight and there should be criminal charges faced by these high-paid CEOs. If I had not done my job right, I would no longer have one, and if I mismanaged company funds, I would face charges.
— Rita L., Maryland

That chapter of the story is still being written.

As we wrote back in June, the FBI has assigned hundreds of agents around the country to look into possible lending and securities fraud. The initial round of hundreds of low-level arrests will likely help amass the evidence required to bring criminal charges against the bigger fish in these lending schemes gone bad.

The FBI has confirmed that about two dozen companies and their top executives have been targeted by the investigation. The list reportedly includes Fannie Mae, Freddie Mac, and insurer AIG and Lehman Brothers.

It may be awhile before these cases are brought to trial. For one thing, the investment schemes at the heart of the financial meltdown reached a level of complexity that is now confounding the same rocket scientists who created these pools of mortgage-backed bonds. Trillions of dollars worth of these investments were sold based on intricate computer models that turned out to be fatally flawed. Unwinding this mess will take time. So will piecing together the lengthy paper trail to show a jury just how these schemes worked.

The problem is compounded by the legal standard required to prove guilt in a financial crime. You have to show, essentially, that the people who created this mess knew at the time what they were doing was wrong, and that they knew they were taking other people’s money through deceptive means.

In some cases, the people who created these now-worthless investments sincerely believed they were smart enough to turn a risky, sub-prime mortgage into a perfectly safe investment. It was all right there in the computer.

Unfortunately, stupidity is not a crime.

What's in the bailout deal for those suffering foreclosure on their homes?
— John N., New York, N.Y.

Not much.

More: http://www.msnbc.msn.com/id/27013906?GT1=43001

[librechik]

1. It's anatomically difficult to arrest someone who is blowing you

at least that's all I can figure

:shrug:

[Lint Head]

2. Because they will flip and implicate House and Senate members involved.

:dem:

[Demeter]

10. Congress Had Very Little To Do With This

Ben and Harry's Iced, Creamed Economy Parlor, however, is neck deep in trouble, as is BushCo in general.

[Robbien]

3. Yeah right. We rigged the system so that those execs aren't even taxed

on their multi-million dollar bonuses. You expect the same guys who have been fawning all over these execs to turned around and jail them?

[Beregond2]

4. This seems lke a waste of time to me.

I doubt they can prove anyone was breaking any laws. The problem wasn't illegal activity, it was STUPID activity.

[cui bono]

7. I'm pretty sure there were laws broken. BofA is adjusting mortages for people

to avoid lawsuits due to "deceptive practices" by Countrywide.
http://www.msnbc.msn.com/id/27050659/

[truedelphi]

8. If you were able to catch Sixty Minutes tonight - they laid it all out

The problem is not at all the sub prime mortgages.

There were not enough marginally incomed folks buying houses to endanger our entire economy. Set it back 10 to 15 % sure, but not rip it apart by its gizzards.

What is undermining our economy are these damn "Credit Default Swaps" And those instruments were the insurance policies that were SOLD to the investors that bought up the SIV's (An SIV was a collection of huge bundles of many of the sub prime mortgages. Some of these bundles were sold over 35 times - sort of like if you Had twenty bucks, but you loaned it to yourself so now you have forty, so now you loan it to yourself and now have eighty, etc)

Now the Swaps were actually insurance so that no one would ever lose anything should any single bundle of sub prime mortgages default.

And as insurance they should have been regulated. Had they been regulated - they would have probably been regulated out of existence. But they weren't insurance - nudge nudge - they were SWAPS -- get it!! And as SWAPS - no one of the many regulators appointed to oversee insurance policies and their sales ever bothered to intervene and see that this mess was stopped before it brought the country down.

The whole mess stinks to high heaven. If you and me go to "Humboldt County" er I mean, "Non Tokers County" to buy some er, let's call it OREGANO, do you think we would be left without regulation? Especially if we drove home in a stolen car at speeds in excess of 115 mph??

As far as I can tell the whole thing that has gone on in Wall Street for the last three years - it is nothing more than a rackets operation. And then a bigger rackets operation was the House and Senate voting to take the money away from the middle incomed person and help the recovery of the very people who did this crap.

And last week, before the WHolesale theft of our economy out from under us - I mean last week's bill means BYE BYE Social Security ! were we not being told by the same experts that brought us this mess that the only way for our economy to avoid tanking was for this noxious Bailout Bill.

But guess what - our economy just tanked!! Even though we gave the country away!

[RavensChick]

5. You really wanna hit those pricks where they live?

Tax the living shit out of every.single.pay check they get! No sense in leaving them out 'cause we're already getting taxed for our pay as it is!

[truedelphi]

9. The small print in some of last week's 400 page

National Recovery Package insures even more tax cuts for the rich.

ANd I think that the Golden Parachutes were left intact too, I mean hopefully not, but don't remember hearing anything about that part of it so that is a bad sign.

[ihavenobias]

6. I think the problem is that the conservative ideology of deregulation made it legal to do this stuff

Maybe it wasn't ethical, but the rules weren't in place to stop it.

[OakCliffDem]

11. Kick