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Feedback ForumNOW wants to hear from you! Send us your opinions, reactions and ideas about "Credit and Credibility"Submissions for this question are no longer being accepted. Previously submitted comments appear below. Comments may have been edited for content or space. Poster: Daniel Wurst Comment: I watched your program on the credit rating companies, and was stunned by the greed and dishonesty of the people running these institutions. Repackaging triple BBB paper into triple AAA rated securities wasn,t magic of any sort. It was out and out fraud. These people should be in jail, and have their assets taken back. The e-mails are the smoking gun that they knew it was fraud and theft. Sincerely, Daniel Wurst Poster: Steve N. Post Comment: THE BIGGEST AND BRIGHTEST? I think not! Hello Harvard, Wharton, Yale......etc. Can we get a refund for some of these people? Apparently we are becoming overeducated and under common-sensed. By the way...you can not put a square peg in a round hole. A B rating can not equal a AAA rating! Poster: katyb Comment: Mann got it right when he said something to the effect that of course we could see it coming. I saw it coming. I have no background in business or economics but I have lots of common sense. Perhaps some insight to human nature. And now I feel sick to my stomach. I don't normally worry but this is really scary! Growing up my mother cynically said to us kids, If you're going to steal, steal so big that no one will be able to touch you. Ironically she raised 3 moral kids who give a damn about the world. I think that is what makes me so damn mad. I think what these greedy SOBS have done is immoral. Gudliata (spelling?) was irritating to listen to. He seemed so self-justifying. My heros are the guys like Mann and Raiter. And anyone else with a greater platform than me who said, this is nuts! Poster: katyb Comment: Mann got it right when he said something to the effect that of course we could see it coming. I saw it coming. I have no background in business or economics but I have lots of common sense. Perhaps some insight to human nature. And now I feel sick to my stomach. I don't normally worry but this is really scary! Growing up my mother cynically said to us kids, If you're going to steal, steal so big that no one will be able to touch you. Ironically she raised 3 moral kids who give a damn about the world. I think that is what makes me so damn mad. I think what these greedy SOBS have done is immoral. Gudliata (spelling?) was irritating to listen to. He seemed so self-justifying. My heros are the guys like Mann and Raiter. And anyone else with a greater platform than me who said, this is nuts! Poster: M. Murphy Minnesota Comment: Your programs should be the current events portion of EVERY high school civics class in the U. S. Every school district should mandate that each student take notes and hand in a brief report on every program. And their parent or guardian should read it and ? add a comment about how they feel about the report. It might get them involved in......becoming more aware and understanding of these issues .....might generate some family discussion!!!! It could result in a much more informed public. Your programs are EXCELLENT......this is not just my opinion......IT IS FACT. THANK YOU!!!!!!!!!!!!!!!!!!!!!!!! Poster: Alison Comment: My mind is boggled! What about yours? Regulators should have seen this coming! It was all to sucker The American People...to foot the bill after they dissapated the funds on nothing that would aide the American People. I think that Mr. Hank Paulson went to Hollywood to take acting classes to dramatically, convincingly, with tears in his eyes, convince people that he had to have the money - it was a matter of life and death for our economy. What an act to get his way! What happened? A disaster! A completely disorganized mess that really jeopardized The American People! Now the car industry! That is the worst of all! It is one of the few industries left in our country, and so many lives are hinged on it! The heads of the car industries should have first opened up their own wallets and put their own money back into their companies. That is what most business owners do: all their money goes right back into the business to make sure the wages and everything is paid for - then and only then do they take out what is left to pay themselves. Nice dream! Congress didn't want to give them the money - it was Bush who pushed it! Now we have Commercial Mortgages that will mature in the next 12 months, or sooner: office parks, shopping malls, hospitals, apartment complexes..etc. Estimated $400 trillion dollars! Now they are asking the government for a bailout! Yes, 2009 will be very intersting to say the least! We just absolutely have to find a way to lift up our country! We are fantastic people,with a history of perseverance, ingenuity and strength! We have fantastic possibilities and we don't deserve to loose our future or our country. Poster: Citizen B Comment: Obama's challenge. I differ with the guest's view of health care. It should be part of the relief package. Most Americans are loosing $1000 a month to health care premiums. What kind of stimulus would we have in America if every household had an extra $1000 a month to spend? Quite a boost I would say. Nationalized single payer is what we want. Medicare for all. Poster: Cynthia B Comment: I have two observations. One, early in the show it is said they had no historical data to support their model. I beg to differ; the 1929 model is quite similar. They had their own Ponzi schemes and that is what this is. Another observation. I can't help remember that quite a few highly qualified, very honest, long term market professionals and investigators were killed in the collapse of the NYC Towers on 911. It seems to me that the only people around who were qualified to police the activities of these criminals were killed in the towers and it was game on for the crooks after that event. How convenient. The man in the white house runs the citizens in fearful circles, throwing hard balls at them every single day to confuse and upset them, while the thieves loot our national wealth. Nice set up. Poster: Patti Hayes-Andersen Comment: Part 1 Mr Stiglitz is absolutely correct. This is why they are crooks... A bucket shop is a brokerage firm that books retail customer orders without actually having them executed on an exchange. The criminal law of many states which make it a crime to operate a bucket shop and is defined as an operation in which the customer is sold what is supposed to be a derivative interest in a security or commodity future, but there is no transaction made on any exchange. The transaction goes 'in the bucket' and is never executed. Operating a bucket shop involves violations of several provisions of US federal securities or commodity futures laws. New York State Insurance Commissioner Eric Dinallo, put a shock into Senate Agriculture committee when he called the credit default swap markets bucket shops, which were outlawed in 1909, after the Panic of 1907. Dinallo presented the committee with copies of state laws by which bucket shops were declared criminal enterprises. Some 90% of CDS derivatives trading, Dinallo said, is basically bucket shop activity. go to part 2 Poster: Steven Duke Comment: Your highness, we are so very sorry. The clothes that we have made are of such exceeding quality and splendor that only the most adroit and intelligent of human beings are capable of seeing them. We had thought assuredly such an astute and worthy person as yourself would be capable of seeing them but alas we were mistaken. We will gladly return all the gold from which the clothing was made with our most humble apologies. The fable of the Emperors New Clothes As always NOW and PBS show themselves as the exception to the pernicious and noxious cowards, propagandists and enablers who populate the modern main stream media. It is an invaluable service to the American people that is being provided and thus explains why it is so maligned and scapegoated by the right and by popular culture. Thank you for speaking the truth and please continue down the rabbit hole in exposing the ideas and practices that have led to this catastrophe. The reversal of or ignoring of so much of the New Deal laws that would have prevented it. The politicizing of the Regulatory agencies that should have stopped it. Please continue to expose the corrupt and abhorrent practices that have been used, the misinformation being perpetrated upon the American people to allow it to continue and the unmitigated gull of those who have done it. Still hidden in the shadows is the Derivatives market. With it's credit default swaps and bets placed without collateral on the failure of these CDO's, it is the fissionable material that will cause the greatest financial implosion in the history of the world Poster: mel bingaman Comment: In your program you had AN ECONOMIST on camera who SAID we should not stifle financial innovation as many more people can now get a mortgage and that WE WOULD NOT WANT TO RETURN TO 1970 when that was very difficult to do. I just checked the 2009 New York Times Almanac and read on page 303 the historical data for home ownership. The chart showed a mere 5% increase in home ownership(62.9 to 68.1)from 1970 to 2007. If the almanac is correct HE USED A BAD EXAMPLE and that means we tanked the economy for a measley 5 points!! Am I right? And what financial innovation has been so beneficial? Poster: Phil Scott Comment: Why aren't these guys in jail? Poster: Ric Comment: On your credit and credibility show: I think your attempt to examine this subject is head and shoulders above the mainstream media efforts, but.... I think you missed one of the main changes in the normal cash flows in the home mtg. market. The fractional reserve banking system essentially creates the money when they issue a loan. Normally that money would flow slowly into the banking systems coffers over the period of the particular loan or about 30 years. What the mtg. security market did was to bring that cash directly into the banking system, in a matter of months, sucking liquidity off the world investment system. This profit turned into a kind of feeding frenzy all along the food chain. This money creation scheme was the real pearl of greed that lead to all the other abuses. Someone that cares PS: As you point your collective fingers (the media) at the institutions that failed the country, take a gander in the mirror. If you did more than just your current post mortem efforts on our economy, you would be examining the underlying principals that were violated here and are being violated systematically in government and industry to some degree. How to be an honest researcher/investigator/reporter in a world where it pays to go along to get along? This will require some kind of new institution that is truly independent decentralized and has self enforced integrity. PSS: One question I am researching is: how is the principal that is repaid to the bank that created the money accounted for with the IRS. Is it treated as income to the bank or is there a special exemption form taxation on money that is created under the fractional reserve banking system. Poster: Charles N Comment: In 2000 I stopped trusting equity analysts. I stopped subscribing to ratings services. They had rated Worldcom and Enron as excellent. Now I view Fitch, Moody's and Standard and Poor's ratings of bonds as junk. I don't trust them, and never will. As far as I am concerned, their opinion rates with Morningstar, Value Line, Merrill Lynch and other analysts. I don't trust Wall Street. So what bonds do I buy, what equities do I buy, and where do I put my savings? Who can I trust? Also, I don't trust our government. How did we get lead in our toys? I also don't view US Treasury paper as safe. Also, I don't trust the US Dollar. With all of the paper that is being printed, I trust that it may devalue. Also, I trust their may be a resurgence of inflation. I don't trust Christopher Cox. I don't trust the Democrats. After all, they have had control of Congress since 2006, and have continued to fund the occupation of Iraq. I am going to have to trust myself. The stock of some companies with a real product and a plan may be a good long term investment. Some bond issuers will honor their committment. Just like our infrastructure, we have a very rocky difficult road ahead. Poster: Nancy Hau Comment: I am disapointed your reporter did not include the important role AIG played in the promotion of the CDO's and the AAA rating. American Insurance Group (AIG) provided swaps (aka insurance) to the investors. That is why investment managers purchased CDOs for pension funds...they were insured by AIG. The term swap was created to avoid the insurance industry regulation. In the late 1970's FDR,s 1934 banking regulations were overturned. Banks, investment brokers and insurance could now merge. The Financial Act of 1999 created the UNREGULATED credit derivative obligation. The very first CDOs were credit card and auto loans to poor risks. The CDO risk demands lead to the high dollar sub-prime and A-prime CDO mortgages. It's like the most HUGE Ponzi scheme ever. Greenspan wrote a 5 page document (available online) endorsing the CDO concept. Greenspan included regulatory recommendations. However, Senator Phil Gramm and the other 2 Senators who authored the Fiancial Act of 1999 specified that CDO's be unregulated in order to be competitive in a global market (poor Iceland). There you have it...how the foxes got into the hen house and into your 401K, non-profits,ABSs,trust funds and PENSIONS. Nancy Hau Poster: Brent B Comment: Enjoyed the piece but you should have taken it a step further. Why were these deals done? Answer; Because were a publicly traded company and if we miss our numbers(analyst earning projections), our stock will go down and the option packages senior mgmt recieves will be worthless. The whole financial mess can be traced back to two mitigating factors: A) The excessive use of stock options as a compensatory tool(answers why such a huge disparity of income levels over the last 20 years)and B) the repeal of Glass Steagall. Feel free to investigate both of these topics in the future. Failure to do so means you will continue to get the same results.... Poster: Thomas Yates Comment: I am writing this immediately after watching your program. I find it amazing that you can still put such spin on this clear and obvious swindle of the American citizens. This did not start with Bush, though he did his part. This was coming for a very long time, I can't imagine how you can say that these 'experts' couldn't see what was coming! I knew exactly what was coming and I was watching for it when the first real operational trip wire was tripped, that being William Jefferson Clinton repealing the rest of the Glass-Steagall Act. The Glass-Steagall act was put in place about 1933 if memory serves to protect against just this happening again! I was waiting to see him do it, and I saw him do it on November 12, 1999 as I remember it off hand, on the Whitehouse lawn I think it was. Joseph Stiglitz was one of the few who said it out loud before this all happened, I remember hearing him discuss it. Furthermore, your story as usual, only tells enough to say 'you reported it'. You never tell the whole story, the fact that this was planned from the start, I knew it, I know many others who knew it, how could you possibly not know it? Now you tell the public the details, but never discuss the whole operational planning of this event. Nothing in politics happens by accident, and nothing in world finance happens by accident either, only the details are variable. I just can barely believe you get away with this. Poster: Charles James Comment: As the top managers of a modern American corporation typically receive the lions'-share of the wealth generated by it's activities, said officers must be held personally responsible for it's - and it's employees' - failings. If it can be shown that fraud was deliberate and epidemic in these companies, then the top managers must be held to personal account. Not knowing - or looking the other way - is no excuse. In their positions of authority, they MUST know what is occurring at the firm. That's their job. If they were derelict in their duty as corporate officers, then they should face civil and criminal charges - and be prepared to pay the price. Poster: Barbara2 Comment: I agree that the people who perpetrated this massive fraud on the world should all be in prison, and not in some comfy white collar prison either. They should return their profits, and Hank Paulson should not be in charge of this massive bailout (how's that for putting a fox in the hen house?). How can they say they could not have seen this coming? I saw it coming when I read about the growth of the subprime loan market in 2004, and I am neither an economist nor a financial professional. Common sense dictates that if you loan money to people who cannot afford to repay it, someone is going to lose, and if you hide the bad securities in a batch of good ones, the house of cards you built will ultimately collapse. What happened to good old common sense? Clearly, greed ruled the day. What manner of Capitalism is this????? Privatize the profits and nationalize the losses! Great. We get to spend our hard earned money to help them continue this fraud. And guess what? The bailed-out banks are using our money to purchase other banks, thus getting even bigger, and therefore far, far too large to fail. They are also still paying dividends and bonuses! Wouldn't we all love a six-figure bonus, no matter how bad business gets? Capitalism at its best? Bailout? What a scam. I knew it all along. Whenever President Bush utters any words to the effect of 'we have to do this immediately, without debate', you should recognize that he is about to perpetrate another scam (remember Iraq and WMDs). What about the credit card companies usurious interest rates? Tune in for the next wave of this debacle.... NPR has an excellent series available for download on the financial crisis, collateralized debt obligations and credit default swaps on the show This American Life. Visit NPR.org O, what a country: we have 700 billion to give the Wall Street crooks, but nothing (or a paltry $14 b) to give the stubborn, Luddite automakers? Low-tech union jobs are not worth saving --- certainly we must complete Ronald Reagan's destruction of labor unions! Listen to the debate on CSPAN about the loans to automakers by Senators from states hosting foreign automakers, and then look up their deals with Toyota et al. Those Senators gave the companies billions in subsidies to 'encourage' them to open plants in their states: the companies are paying no taxes; the states gave them free land; the taxpayers paid for training the prospective autoworkers; and the wages of those workers are the same as those of the unionized workers in Detroit. What more could a 'true' Capitalist ask? Dear NOW editors, please do a show on how the bailout money is being misused/abused. We need to see the facts so we can channel our anger to the appropriate parties and put a stop to this madness. Poster: Judith Logue Comment: Why aren't the individual members of the rating agencies, Standard and Poors, Fitch and Moody's, being prosecuted for the fraud they committed. Why are they not being convicted under RICO and all their funds which they gathered fraudulently used to help the American People. They need to be dismantled and replaced (responsibly - like leaving Iraq). If a poor man robs a gas station, he pays and goes to prison. These creeps break the law - and get a scolding. Poster: M.A.MERRILL, LCSW , PhD Comment: Great broadcast - great context. Rating Agencies: BADDD! But your audience has been fed financial alchemy'101'.It is time to offer us advanced study. We are capable of more. Future broadcasts need to penetrate how additionally, CD swaps on collateralized or syndicated asset-backed instruments - may be the Tsunami rumbling closely behind the first wave of financial crisis. We need to have 'arbitrage' -- 'counterparties' and other investor - based arcana exposed. We count on you to coninue the good work . Thanks Sincerely, Michael Poster: Preston Comment: This country needs a good George Washington, and a boston tea party. This federal government has become the very thing the founding fathers fought against. I have not been represented by any member of Congress. I franknly know that members of congress have no clue what my opinion is. And they dare not ask. I can forsee the fall of the United States as we give away jobs, print money against comodities that do not exist. Yes this story needs to be shown in the schools, Along with the story of Paul Reveres' Ride Poster: Grady Lee Howard Comment: The outcome of this financial fraud is that the beneficiaries go unpunished and are rewarded with great wealth plus bailout money. What is a speculator? It is an individual who borrows other people's money, legally or illegally, in order to gamble with it, sometimes in the markets. There will be 3 results: 1.Because this outcome has resulted in a greater polarization of wealth the recovery will be slow and sluggish. The size of the middle and upper middle class will shrink as the underclass swells. Property will increasingly fall, by default and purchase, into fewer hands. Lack of political power among the overwhelming majority will result in a greater disparity of income. Those with wealth and property will not be interested in propelling the mundane industries of food production and other vital sectors by investment, but will prefer to continue speculating at increasingly longer odds. 2.Speculation will quickly renew and become more rampant, because the people who make the rules are dependent upon the speculating class. 3.The floating value of currency will be undermined by debt and worthless fiat issues. Hyperinflation will commence in the middle of a 2nd Great Depression. The propertied class will continue in power on account of immense holdings of property and valuable commodities. I leave it to nightmare imagination what will ensue. Such is the inevitable outcome of global corporate capitalism, because it can never be regulated. Great minds, please submit substantive solutions. Poster: Cere Davis Comment: This show is an ok attempt to uncover who's at fault around our current financial meltdown but it fails to go very deep. You fail to mention that the rating agencies are, ultimately, funded by the companies they rate. How could this not eventually lead to the corruption of the ratings agencies?! Also, there is the matter of governmental regulation that should have prevented the bundling of equity in such a non-transparent haphazard manner that could never be easily audited by external agencies. Poster: Joyce B Comment: first of all thank you PBS for explaining this topic, im not an economis major and wall street just boggles my mind. for a long time, the US has been seen as a country with excellent, safe and strong standards in a lot of things. US products or policies were trusted, now, the US seems more and more like a big JOKE! really? we didn't get anything from all the money that those companies made and now, we have to pay for mess they created in the name of profit--btw, profit that only a few will get, but most of us will suffer from. what a JOKE! Poster: Pat Lambright Comment: Yours was the first -possibly only- discussion that did not characterize borrowers as greedy, dumb people who purchased more home than they could afford. Certainly, mortgagors did not create the loan instruments. The loans could have been an excellent means to stimulate home ownership -- except that they included poison pills in the form of exploding interest rates and fees. Some of the lenders -and their associated insurers, appraisers, et al, should go to jail. Don't pass go, don't collect $200 (or bailout money) -- just straight to jail. Thank you for shedding some light of truth on this situation. Fabulous as always. Poster: Val Comment: Can anyone say DotCom? The DotCom period was also a bubble. As with the current bubble, the DotCom economics also defied common sense. Then as now, neither the regulators nor the auditors were anywhere to be seen. The lessons of history were missed; thus, the errors are repeated ... only the consequences are exponentially worse. As Joseph Stiglitz noted, they did financial alchemy and turned gold out of lead. My response to the financial wizards I came across was based on my IT experience: Garbage In - Garbage Out. It made no sense that these junk CDO were rated AAA. Julian Mann basically said that same thing. These instruments and their underlying sub-prime mortgage business defied common sense (lending money to someone who cannot pay you back made no sense). Like Julian Mann, I too was criticized for not understanding the new financial economy. It reminded me of similar criticism that I'd gotten back in the heady DotCom days, when I worked at one of the top accounting firms. I was told that I didn't understand the new economics. My response back then was 'The new economics is the old economics but with the books cooked.' My words are just as applicable now as they were back then. Poster: Joseph Thames Comment: Clearly Enron was not a fluke. Something must be done to remove the fundamental conflict of interest at the heart of our financial system. It compels well meaning executives toward the effect if not the intent of fraud. There is a strong precedent for dealing with this problem, namely by converting these credit calibrating agencies, into nonprofit service corporations. In 1960, The Aerospace Corporation was cloned from TRW's Space Technology Labs (STL), for a similar reason. But STL's activities had nowhere near the catastrophic impact of those of Moody's or S&P today. Nonprofit, Federally Funded Research & Development Centers, (FFRDC's) are major arms of government, providing long-term scientific and engineering analysis of complex technology, most of it far more complex than financial derivatives. Engineering is about modeling and testing new instruments, before we place our faith in them, especially when so much depends upon their predictability. Poster: Asia Real Comment: And what can we as the screwed taxpayer do to voice our outrage, get the change we need to stay protected, hold our representatives responsible to not further enrich the robber barons who knowingly stole from us? Why would I go to jail for stealing food if I needed it, and they are not only free, but they will remain free to continue doing what they do flying around in their Lear jets, taking $40,000 vacations, while receiving bail out money from my 401k, my future higher interest rates, inflation and taxes? When does the short-term memory of average Americans become enough of a long-term rage to finally not only shame white collar crime, but make the criminals accountable? When will we stop wanting to be like the rich, admiring the rich, watching the rich on t.v. and in magazines, forgiving the rich by believing crackpot notions like regulations and laws are bad because the rich tell us that we should never hinder them and their institutions the right to make limitless money at the majority's expense? When will we see that when CEOs of multi-nationals get jobs as elected or appointed officials in government, it's not just a conflict of interest, it's a special interest! What! What! What can be done to bring real accountability to them and stop this expectation that we have to pay for their party when we're not even invited? Asia Real, Ventura California Poster: Susan D. Comment: The answer to Barbara is yes ! Americans are apparently that stupid. Poster: Susan Comment: Stiglitz called it financial alchemy. Your description of how it was done (BBB's to AAA's) made me think of money laundering - & the rest boiled down to GREED! Poster: Bill Michaels Comment: Why aren't Standard and Poors executives like Director Scott being prosecuted for FRAUD? PBS showed that S&P Director Scott sent an e-mail to Raiter effectively directing their analysts to produce a model to make BBB rated mortgages look like AAA rating with the intention of gaining greedy profit. S&P executive Gugliati admitted there was not sufficient data to make that AAA rating. Poster: Vincent from Maine Comment: This was a very good broadcast that logically portrays the sequence that likely caused our current situation. But, it would have been a lot better for our country if you had been able to brodcast some of the clips you had in this show about past years inactions to the public in 2005 when public awareness might have been able to force Congress to act then that would have prevented the economic collapse we are experencing in our credit markets today. Poster: Eric Pedersen Comment: We've repremanded wall street,the hedge fund operators, credit rating agencies, independent mortgage brokers, investment banks and greedy consumers who thought markets will always rise and bundlers who deceitfully repackage dung and call it gold as they dumped it downstream, but How does the history of the community reinvestment act factor into all of this? Or does congress,the political administrations of both parties for the past 30 years and Wall street just get a slap on the hand and the key to the vault in the same breath? They'll just say that they're sorry, and all's forgiven and forgotten, right? Poster: Jim Davis Comment: Enjoyed your program on the financial crisis and the comments of the 3 economists on the future of capitalism. Might a suggest a topic for a future program? Check out Capitalism 3.0 by Peter Barnes. This is a brilliant treatise for upgrading the operating system of industrial capitalism. The book is available for free under a Creative Commons license online and would add greatly to the debate over what's next at this critical time. Keep up the good work! Poster: Anthea Estergard Comment: Thank you very much for your excellent programs. The topics are relevant and we learn what goes on behind the scenes that contributes to the problems this country faces. I am also very grateful that you makes the programs available on the computer, since I cannot always watch NOW at the designated time on the TV. Keep up the good work. Poster: Malcolm Roberts Comment: Your show Friday, 11/21, illuminated for the first time the problem that caused the financial crisis. And, your excerpts from Dr. Stiglitz on your website describe a clear answer . . . a roadmap for Congress and President-Elect Obama. Please keep telling this story. Thank you. Poster: Barbara Comment: So much greed, so many crooks -- and when the President, in charge of positioning regulators and signing legislation to allow this kind of mess to happen -- leaves office, he will give them all pardons, and none of these criminals will pay the price either with prison sentences or financial penalties. The fat cats take care of themselves and we little guys have no control over what happens to US!!!! I'm sick of it! Are we Americans so stupid that we keep voting-in those who could care less about our own financial interests or any other for that matter? Talk about the Dumming Down of America!!!! Sorry this isn't a simple pithy comment. I'm too mad. Poster: manuel tarsha Comment: the money over the last 20 years that was gleaned as profits should be tracked, the benefeciaries should be placed under house arrest and forbidden from getting access to their funds. their assets frozen, and a board of inquiry with the help from the FBI follow the money, and ask where did you get this? if a small time thief robs a bank for a few hundreds of dollars he is thrown in jail, if not killed by the security guards. this white collar crime on the American public is thousands of times larger than that and the thiefs that commited it are either still in their jobs and asking for more dollars, or have squandered and sheltered the proceeds of their scheme. they are asking for a socialist country bail-out, how about applying a socialist country type dictatorial law? Poster: Robert Barnes Comment: Your show Credit and Credibility was excellent. I now understand how this crooked bailout mess came about. I thought the W.M.D. lies about the The Iraq war had set a new high for govermental corruption. Please show the program again as only a few people saw the program. I was lucky enough to see the program. My thanks to all of the people at P.B.S. you are doing a very good service to the American People which our government refuses to do. Robert L. Barnes Poster: Roger Sayer Comment: The foreclosures on so called 'sub-prime' loans baffles me. Why foreclose? OK the lenders were not receiving the interest they bargained for but by throwing people out of their homes they get no interest. In fact they are landed with a mass of empty property that they probably have to pay tax on and have no chance of selling. Why not renegociate the loans so that the families can stay in their homes and continue to pay at a rate they can afford? Then as the economy picks up the loan agreements can be further adjusted. I would have thought the lenders would settle for something rather then nothing. Poster: Roger Sayer Comment: The country has talent, natural resources, much work to be done and people who are anxious to work. The potential to produce, to supply the demands is as high as it's ever been. But the economy is grinding to a halt, not because of any of the above but because the money system has failed (or has been subotaged by the finance industry). It's about time the Feds wrote a rule book on how money must be used. It's purpose should be only to distribute and exchange goods and services and should not be treated as it's own commodity. Perhaps by compiling a set of rules for the 'money game' the mountains of worthless paper can be avoided in the future. Poster: Cynthia Comment: I think Paulson and the current administration are a pack of bank robber type thieves that are fooling everyone so that they can make off with the loot as they leave office for 50 years. They are mad as hell on top of it and are getting even by teaching us a lesson for rejecting them. It is so obvious with all the MEAN SPIRITED OVERTURNS of environmental and labor law that is going on right now. They are criminals and more needs to be discussed about this. Why does the RICO act not apply to them? Poster: SinDe Barnwell Comment: Thank you for a wonderful explanation and expose on the financial crisis. More and more I depend on NOW to explain the inexplicable. A job well done! Keep up the great work. Poster: Joseph Thames Comment: Clearly Enron was not a fluke. Something must be done to remove the fundamental conflict of interest at the heart of our financial system. It compels well meaning executives toward the effect if not the intent of fraud. There is a strong precedent for dealing with this problem, namely by converting these credit calibrating agencies, into nonprofit service corporations. In 1960, The Aerospace Corporation was cloned from TRW's Space Technology Labs (STL), for a similar reason. But STL's activities had nowhere near the catastrophic impact of those of Moody's or S&P today. Nonprofit, Federally Funded Research & Development Centers, (FFRDC's) are major arms of government, providing long-term scientific and engineering analysis of complex technology, most of it far more complex than financial derivatives. Engineering is about modeling and testing new instruments, before we place our faith in them, especially when so much depends upon their predictability. Poster: Gloria G Karp Comment: PS Joseph Stiglitz has long been one of my heroes. Ever since he started talking about globalization. Is it time for you to do a new program on that subject? Poster: Gloria G Karp Comment: this was an especially noteworthy show (and that is saying a lot since all of your programs are great). This information on the rating agencies has appeared nowhere and only reinforces our beliefs that anything connected with Wall st is a disaster for the taxpayer. One can only hope that Obama will get this information, but I do worry since all of his appointees are middle of the road Clintonites connected with wall st. Poster: Joseph Goldman Comment: While watching the Credit and Credibility segment on Now last night, I felt as though I was seeing a syndication re-run of the burst of the Dot Com Stock bubble of the late 1990s. Can anyone tell me how Standard & Poor's analysts recycling BBB-rated CDOs into AAA mortgage-backed securities differs in any way from analysts at securities firms in the 90s rating tech stocks and Dot Com IPOs as Buys without any track record of earnings? What is the lesson that was learned after the crash of the NASDAQ market and all so many investors lost their shirts back then? What good did all of the congressional hearings and the hand-wringing in Washington do back then when ten years later we're seeing the same Wall Street greed at the expense of investors and now taxpayers rearing its ugly head? This is extremely disillusioning. How can anyone in their right mind invest in the stock market now when this kind of one-two punch (not to mention Enron in the middle) has laid waste to whatever confidence that existed in the stock market. What needs to be done is a serious assessment, stock by stock, firm by firm of every publicly traded company by an independent investigative body with the intent of weeding out the good, the bad and the ugly. This should result in many companies being mandated to buy back their stock from investors and becoming private entities once more. What should be left is a much leaner market that will not fluctuate very much from day to day, or year to year. The bulk of investor earnings should become dividends paid by the sound, solid earnings-based firms that earn their status as publicly-traded entities. No more alchemy, financial wizardry and lets face it, phony financial models. Poster: Sharon Archer Comment: Fantastic insights and information I never see on other networks. Continue your amazing work, it is vital in these times. Thank you! Poster: Sharon Archer Comment: This is the most informative piece on how the government failed the American people. Call or email your senators and representatives and demand that they focus more on Main Street and less on Wall Street. From The Bottom...Up! Thanks PBS for providing the clarity and motivation in these troubled times. Poster: Sarah Avery Comment: I could bearly hold myself back from trying to strangle Richard Gugliada. I am constantly amazed at PBS's correspondents failure to point out the obvious. Richard Gugliada belongs in jail. He is a criminal - likewise the CEO's of Fitch, S&P and Moodys. They should spend the rest of their lives repaying the world for the catastrophic collapse of the economy that they engineered. The auditors of these credit agencies are also at fault. SAS 99 guides the auditors evaluation of risk of fraud and was clearly mis-applied. Revenue recognition is the primary source of fraud and there are many techniques that auditors could have used to expose management's pressure to increase revenues. Poster: Carla Blumberg Comment: I believe that there were a couple of things missing from the Credit and Credibility show. For sure, there is great culpability on Wall Street. But the idea of bundling all those BBB's together was to make them a safer investment because it was thought that not everyone in there would default. However, the mortgages were designed to get people (qualified or not) into them - but not to keep them in there. It is less mysterious to me how the credit raters thought what they were doing was OK than what the lenders thought they were doing. What did they think was going to happen when the rates went way up after a few years? CB Poster: o'Kelly McCluskey Comment: How were these experts insured to cover professional errors and omissions. Who assessed the prmiums each individual had to pay to cover their exposure? Did their prmiums increase as they obtained higher & higher profits? Has there been any investigation of why we taxpayers should pay before their Insurance Carriers? Capt o'Kelly McCluskey, Former Chair ,Consumer Protection Section Wash State Trial Lawyers Assoc Poster: Maurice Lekamge Comment: The three Motor compamies in the US would have been given the 25 Billion dollars, if only they had come prepared with a prepared constructive plan for their redemption. Any junior executive with a smattering of commonsense knows that. Sheer stupidity and childishness. These are the people who run these big corporations. What a disgrace. Poster: garyd Comment: 'NASA, WE HAVE A PROBLEM' 1-Its interesting that during the run up of the tech bubble until 2001, Wall Street had their fingerprints all over the evidence. (100 buy orders to 1 sell order and the smartest? financial minds in the country didnt see it coming?). Investment banks lied, CEO's lied, analysts lied, accounting firms lied, etc. They made hundreds of billions in profits thru fees, commissions, bonuses, and stock options etc...while the rest of the investors lost trillions....and we forgive them. Does anyone see a pattern here? 2-During the run up of the sub prime mess in 2008, Wall Street again had their fingerprints all over the evidence. Investment banks lied, CEO's lied, analysts lied, rating agencies lied, banks lied, mortgage companies lied, etc. Again, hundreds of billions were made in fees, commissions, bonuses, and stock options....while the rest of the investors lost even more trillions....and we forgive them again. Does anyone see a pattern here? 3-Now we have appointed as treasury secretary, a man who was CEO of Goldman Sacks. The news media tells us he made $700 million dollars thru fees, commissions, bonuses, and stock options while all this trickery was going on. In order to (help?) us again, He is now bailing out the same people he worked around at these institutions, who (HELPED) cause all these financial problems......who will mend their ways so as to help us get out of the problems? .....and we still forgive them again. Does anyone see a pattern here? Not only has Wall Street stolen our money, but the Federal Reserve is creating the money out of thin air to help bail them out......and charging us for the damage! Are we on the same team?....and we forgive them again. SOLUTION...vote them all out (everyone). Democrats, republicans, good or bad. If Americans could do this for just one election, they would 'GET THE MESSAGE'. Could 500 new guys do any worse? The leaders we now have, have bankrupted us for the next 2 generations.....and we still forgive them. Poster: Carlton Comment: You guys going after the ratings guys, S&P, Moody's, Fitch, is straining at a gnat and swallowing a camel. Their millions or billions are chicken scratch and old news. Your name is NOW. Why are you looking at the past. Look at what is happening right now. Look at where all that bail out money is going. It is disgusting. If the rating agencys should have blown the whistle, how much more are you guys suppose to blow the whistle on the wholesale looting of our nations wealth right under your nose? At least the ratings agencys had obvious monetary motivation. What motivates your looking the other way? Poster: G. H. setac Comment: When do these people go to jail? Why don't we make them give back the UNEARNED money? Poster: Peggy McDow Comment: It seems to me that the crooks are in charge. They do not care about the American people, the taxpayers only their greedy selves. When are these people going to go to jail? Right now W is deregulating every thing to add to this problem. I feel he has been the biggest crook of all. Poster: James L Stratton Comment: Just a Word, Credit has No Standard and is not derived too by any one source. Companies that choose a model to use as a Standard are as crooked as any high stakes roller in the money game and should be held accountable by the United States Justice Department as criminals. We the public are suffering because of these people and I for one am all in favor of prosecuting of these individuals. I am a Veteran living on a small V.A. Pension. My check that was awarded to me in 2003 goes absolutly nowhere these days as opposed to when I was first was awarded this pension. I was looking for a place to own but now that will be virtually impossible because of these Wall Street Wizards and therefore will be forced to rent for the rest of this decade if not beyond. Also what good is money if it has no standard? Placing a value on something is not the same as setting a standard we need to go back to a standard on our money and not some arbitrary amount, Whatever that may be! Thank You James Poster: dave Comment: Great show. Thanks for the episode. One thing i would like to note is That there were so many players involved in this economic disaster. The rating agencies were just a small part in an overall system of corruption. To get at the root cause of this pyramid scheme a person would have to start closer to the beginning with Greenspan and his decision to lower interest rates to 1%. This action did two things. It created a massive amount of capital looking for an investment while at the same time reducing the rate of return on safer venues. With interest rates at 1% banks were desperate to find investments with a decent return. With limited opportunities, they took greater and greater risks in an attempt to chase yield. Government intervention in the market place can only cause imbalances. Our willingness to fix the game will only lead to bigger and bigger disasters. Using the excuse of trying to help the American worker is an out right lie. When institutions manipulate the markets its only for one reason, to make money. If a person wanted to help society they would join the peace corps, not become an investment banker. Bernanke's solution is more of the same. Decimating interest rates and flooding the banks with cash. We're making the same mistakes expecting different results. Poster: James Frederick Comment: The basic error was a common one, the suspension of skeptical evaluation coupled with an unthinking acceptance of an ideology which became not only conventional thinking, but generated groupthink throughout the business community, the media and the government. That ideology, when boiled down to its most basic tenet was that the free market could replace government, which therefore became essentially unnecessary, even in areas of defense, where contract mercenaries were increasingly preferred over citizen solders. Handing over the reins of government to the business community was a clear and simple recipe for disaster. The business community is made up of organizations who will act invariably in their own financial interest, with no inherent concern for community, health, environment, patriotism, morality, or even national security. In no way do the priorities of the business community match those of the citizens of this nation, save for the very privileged few, who are in positions which the business community rewards with enormous wealth, on a scale unprecedented in history. While many individuals within the business community may embrace values of the majority of our nation, fairness, decency, integrity, and concern for others, the pressures for profits and stock price appreciation within business organizations overwhelms all such concerns of the individuals within them. Essentially we have rogue elements running the country, who are supported by a political machine whose need for money for successful political campaigns makes it subservient to business, to the great detriment of the nation as a whole. While we do not need government to supplant free enterprise, we do need it to govern, to make and enforce the rules that benefit society, to keep score, and require that the free enterprise acts productively, not predatorily, as far too many business organizations now conduct their affairs. That so many business do so is no accident, it is the inescapable result of the untested theory that business and the free market could regulate itself, a fantasy, however appealing, that has no history or science to support it, only the latest delusion of the human race, which forever is susceptible to nonsensical ideology. Poster: Thomas Comment: I just watched your program on the credit rating agencies and their role in the mess that's been created. The central theme seemed to be that corporate greed caused these agencies to overate these CDOs. But you committed one crucial detail, which is that the three ratings agencies have a state sponsored monopoly in their field. That is, they are the only the companies allowed to produce credit ratings. This means there is no real competition, and no reason for any of the companies to provide useful services, because either way they will all be protected by government regulations. I really wish you had included this crucial fact instead of heedlessly chalking everything up to greed. Poster: Phillip Sebree Comment: From what I see, is that when the dow was flirting with 12000 to 13000 or more this could have been an off shoot of the CPO packages that folks like Standard & Poors and Moody and others of the like that basically approved of these BBBloans and gave a thumbs up to investors that these packages were on the up and up; Furthermore it seems that the Bush administration turned a blind eye via the agencies that should have been regulating these agencies in the spirit of making a buck, a hugh buck. Does anyone agree with me that this looks like these issues are the root causes of the financial situation we now have world-wide? Feel free to email me... unv@usanewsvideo.com Poster: Wallace Raynor Comment: It is incredulous that our representatives in Congress were not aware of the party that was going on with the rating agencies, Standard and Poor's, Moody's,etal, in regards to the subprime lending debacle. These rating agencies have committed fraud! Any individual with simple household finance abilities could have seen the fallacy of lending money to those who could not pay back the loan. Criminal actions must be taken on all those evolved. Poster: paul jellinek Comment: A fascinating program. I had suspected from the outset that the credit rating agencies were at the heart of the financial meltdown, but I hadn't understood until tonight's program how they were compensated. My simple-minded question is: wouldn't this problem largely take care of itself if the rating agencies were paid by the buyers of the securities they were rating rather than by the sellers, and if they were paid on a flat-fee basis rather than a volume basis? Seems like something Congress and the new administration may want to think about in considering regulatory reforms of the financial system. Poster: Mariah Fee NYC Comment: I can't believe that S&P lied and wrote that getting business was not the priority in determining the values of the CDO's. Gugliotta wanted the business and pressured Raider to make (best guess) data to get the AAA fake ratings. Gugliotta left before the sub prime melt down- & probably left with all his money in tact. He should be prosecuted for conflict of interest. The tax payers are now having to clean up his fabrications that helped to de-value our economy. These men posed as analysts in a trusted and venerable institution S&P. They operated as brokers. This was a contradiction that should not of been allowed to continue. Shame on Standard and Poor. Gugliotta should give back his illegal gains. Oh that's right - we haven't proved if this has been illegal. He was a broker working/posing as an analyst in a credit agency. His obligation was to provide the correct and truly analyzed data to determine value. He was and is corrupt!!! I am so so angry at these people. Poster: Margaret Dower Comment: Credit & Credibility. One of your very best. An ordinary, not-doing-so-well-right-now investor, I finally get it. Poster: Lynn C. Schwartz Comment: I just saw this broadcast and was totally apalled. I think that what these people did is CRIMINAL and they should be prosecuted!!!!!!!!! Your show was wonderful and informative as always. The greed of us all is abominable and some are worse than others. Please tell me if there will be any prosecutions for this. Sincerely, Lynn Schwartz |
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