The Global Financial Catastrophe Defense

I am to understand that in the United States, in an article in the WSJ that banks have won dismissals of lawsuits with variations of "a global financial catastrophe defense" arguing the blame should be on collapsing markets rather than any actions on their part?!

What judge in his right mind would listen to such a defense?! Are the banks suggesting that they were passive bystanders? Did CDO's, NINJA Loans, Sub-Prime and all the other financial products appear out of thin air?

I just don't get it. Next will we see a murderer throw away their weapon and point to the number of murders happening in general and blame an anonymous "them" for the crimes they committed?

And then Greenspan chimes in that he was 70% right but he and the regulators were being pressured to expand credit, particularly to foster home ownership. Wait a minute. Home ownership isn't a right. It brings with it responsibilities like being able to pay. Rather than hiding behind veiled barbs at Republican enemy #1 Barney Frank why not focus on the lax regulation and oversight that allowed the sub-prime mess to evolve in the first place. Oh, but then that would assume that Greenspan would acknowledge his responsibilities....

Which leads us straight to those towering intellects of Citibank Mr Prince and Mr Rubin. What exactly was Mr Rubin paid to do? Apparently it was to meet with clients and advise on "strategic and managerial issues". Well Mr Rubin was certainly on top of the strategic and managerial issues at Citibank. I wonder what advice he was pedalling.

And then that paragon of intelligence Mr Prince. He blames the financial crisis on a combination of prolonged low interest rates, the growth of the securitization market, policies encouraging home ownership and the "patchwork nature" of sub prime mortgage regulation! He then goes on to say that he believed that neither he, Citibank's chief risk officer Mr Bushnell or Citigroup's senior traders and bankers "understood the risks" in their CDO portfolios.

No Mr Prince, it was clear that there was a problem-if you were willing to look at the structures closely. That would require an ability to look beyond the revenue figures that were being generated and actually inquire as to how they were being achieved. It would also require a risk manager who actually asked difficult questions and would be willing or able to challenge traders and structurers.

I can only partially agree with Phil Angelides, the Chairman of the Financial Crisis Inquiry Commission when he told them "you were either pulling the levers, or asleep at the switch". They were obviously asleep at the switch-I also think they were either criminally negligent, or negligently criminal. In either case the operative word is "criminal".