Fraud and the Mortgage Meltdown

Charles Ferguson, the person who created the documentary on the mortgage meltdown "Inside Job," has written a book on the topic titled "Inside Job: The Financiers Who Pulled Off the Heist of the Century." I can only seem to find it on Amazon's UK website so I don't know if it will be available in the US. In any case, this article in the Guardian, written by Ferguson, has some interesting comments about the fact that the Obama administration and the US Justice Department is not prosecuting anyone. Ferguson also names several banks that he claims were complicit in the meltdown and committed various forms of fraud. He says that It's pretty disheartening to think this much corruption exists in the financial industry and the government isn't doing much to hold anyone accountable for it. Here are a few excerpts:

CFOs and Fraud

EY just released the latest version of its annual Global Fraud Survey and some of the findings are striking.    15% of surveyed CFOs expressed a willingness to pay bribes and 4% would be willing to misstate financial performance to help their business to survive an economic downturn (versus 9% and 3% last year, respectively).  While the survey was conducted globally, according to the report, "No strong patterns were identified in relation to the jurisdictions, industries or types of companies where these issues were more acute."  That is, these results aren't primarily driven by a few extreme locations or types of companies but appear to apply fairly generally everywhere, to all companies.

Causes and Effects of Cheating in America

Here is an article that describes how the family's failure to instill a strong moral compass (and even corrupting the moral compass of some children) is leading to costly short- and long-term economic consequences. It reports a case where several students were found to buy "ringers" to take entrance exams for them so as to get into colleges where they would otherwise be unable to gain entrance. A troubling statement in the article is: "Parents – who presumably foot the bill for hiring these ringers – feel tremendous pressure to give their children the best odds they can for gaining admission to Ivy League schools, where success would mean better prospects for future careers." Assuming parents are supporting or at least not preventing this sort of behavior, the family is truly failing in this case. The least of the consequences from such a situation are described in the article as follows:

Imagine John Edwards on the US Supreme Court

Check out this article about former Senator John Edwards watching a video of himself lying about his affair. The article states that he was holding out hope to be a US Supreme Court Justice. Wow, that is scary...