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Trust Me, Says Wall Street, Just Trust Me

By    |   Wednesday, 18 Mar 2009 08:00 AM

Accountability is the newest idea in Washington, perfectly focused in the manhandling of Jim Cramer on last week's painful-to-watch but exhilarating "interview" with Comedy Central's Jon Stewart. Thomas Frank in The New York Times puts it as bluntly as anyone can.

"But the larger problem won't go away. And it's not just a matter of people missing the biggest economic story of the last 20 years. It's a matter of those who minimized it and those who blew it off because it didn't fit their worldview continuing in their plum positions of authority. Mr. Stewart wasn't rude enough to ask it, but over all his inquiries there hung the obvious question: Why do you still have a job, Mr. Cramer?"

It's a question worth asking: Ken Lewis at Bank of America still has a job. So does Citi CEO Vikram Pandit. John Thain at Merrill managed to exit stage left with a bundle of cash and no serious questions. The perpetually tanned Angelo Mozilo, the ex-CEO of Countrywide Financial and a cofounder of the failed IndyMac bank, walked away with millions of dollars despite it all, although it has been reported that the SEC might finally be close to charges.

Nevertheless, Mozilo's No. 2 at Countrywide, Stanford Kurland, now makes buckets of money, the Times reports, buying up the same kinds of garbage mortgages his former company wrote in the first place, through a company called Penny Mac.

And shouldn't the entire crew at Moody's and Standard & Poor's be relieved of duty, with prejudice, and immediately? Warren Buffett owns a big chunk of Moody's. Doesn't he have any skin in this game, or is it good enough for him and Charlie Munger to do their own homework and just ignore the ratings agencies?

Oddly, and this is where one's head just spins, Eliot Spitzer, the infamous Client No. 9, now makes a living blogging about these folks (and trying to do New York real estate, go figure). Weirder still, he works alongside Henry Blodget, the poster child of conflicted analysts from the last big stock disaster, the dot-com mess. Remember, Spitzer exposed Blodget's harshly critical e-mails about tech stocks he was nevertheless touting to clients.

The politicians behind this mess will likely pay at the ballot box, but only a serious law enforcement effort followed by civil or criminal trials will create any kind of real brake on the insanity that was Wall Street the last decade.

Yet, if the aftermath of the Enron cases is any example, whatever brakes are applied simply won't be enough to stop this train. President Obama says he'll clean things up, but now his Democratic Congress is getting pulled under by the same rip tide of messy alliances and questionable business deals.

It might be simpler to just fire them all and start over. Trust, if it still exists, might well be the hottest commodity of the coming decade for investors. Low in supply and, one would hope, high in demand.

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Accountability is the newest idea in Washington, perfectly focused in the manhandling of Jim Cramer on last week's painful-to-watch but exhilarating "interview" with Comedy Central's Jon Stewart. Thomas Frank in The New York Times puts it as bluntly as anyone can."But the...
wall,street,lawsuit
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2009-00-18
Wednesday, 18 Mar 2009 08:00 AM
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