Financial analysts try to assign blame for the credit crisis

[Biggus Piggus]

Here's what the CFA survey returned as to who is to blame for the creation and magnitude of the subprime credit crisis, in order of responsibility:

(1) mortgage underwriters who did not hold to proper lending standards,
(2) credit rating agencies who put careless or negligent ratings on MBS,
(3) financial firms holding mortgage-backed securities, using inadequate risk controls and often holding them off balance sheet
(4) financial firms that engineered mortgage-backed securities of increasing complexity,
(5) lax regulators and a legacy of under-regulation,
(6) individual real estate speculators who took out many of the loans that are failing.

As for aspects of the bailout plan:

66% supported the bailout plan as the best solution to the crisis; 34% did not.

46% supported the temporary suspension of short selling; 54% did not.

63% said implementing the uptick rule was a better alternative than suspending short selling; 37% disagreed.

63% supported the government guarantee of money market deposits; 37% did not.

60% supported the creation of a $700 billion liquidity pool using taxpayer funds; 40% did not.

76% said the package should include limits or oversight on executive compensation for firms accessing the liquidity pool; 24% disagreed.

72% said the requirements for fair value accounting should not be suspended to allow firms to avoid having to write the value of derivatives down to current market value; 28% disagreed.

74% said the government should pay fair value for the illiquid subprime, mortgage, and other derivative securities; 26% said the government should pay a value other than fair value.

As for which factors were causing financial markets to remain volatile after the global interventions:

(1) unwillingness of commercial banks to lend to one another, (2) concern about the likelihood of a global recession, and (3) concern that financial institutions continue to hold assets at values that do not accurately reflect current market value.

[The Marmot]

Wait, wait, wait........ where are the damn Democrats on that who's-responsible list?!?!?





OK, sorry for the political derail. Back on topic.

[Biggus Piggus]

Congress's push for affordable housing was listed in the "other comments."

[Biggus Piggus]

Some guy on CNBC this morning was trying to suggest that Republicans afraid of Obama had been causing the market to go down + that this week's rally stemmed from McCain's recovery in the polls.

Honestly, folks out there, that's not how we investment people work.

[Biggus Piggus]

I wanted to call in to CNBC and ask why voting for W twice hadn't helped the stock market.  If they want to play that stupid game...

[HOGSCALD]

Some guy on CNBC this morning was trying to suggest that Republicans afraid of Obama had been causing the market to go down + that this week's rally stemmed from McCain's recovery in the polls.

Honestly, folks out there, that's not how we investment people work.

Are you saying there is no emotional or irrational behavior involved in the market?

[HotlantaHog]

Are you saying there is no emotional or irrational behavior involved in the market?

Plenty of emotional and irrational behavior, but there is pretty much contempt for poltiicians of all stripes.