Matt Taibbi Quotes

Securitization was one of the most brilliant financial innovations of the 20th century. It freed up a lot of capital. If it had been done responsibly, it would have been a wondrous thing because nothing is more stable, there’s nothing safer, than the American mortgage market.... It worked for years. But then people realized they could scam it.

Much of the blame for the Great Recession lies with abuses in the housing market - namely the creation of risky and unsustainable home loans that were packaged and sold as quality investments around the globe.

The financial crisis of 2008 was not caused by investment banks betting against the housing market in 2007. It was caused by the fact that too few investors - including all of the big investment banks - bet too heavily on the housing market in the years before 2007.

If there had been a Financial Product Safety Commission in place 10 years ago, the current financial crisis would have been averted.

If nobody can sell mortgage-backed securities based on trillions of dollars of unpayable instruments, there's a lot less risk in the overall system.

We need to hold Wall Street accountable for issuing the kinds of deceptive loans that nearly brought our economy to its knees in 2008.

Investigating some of the largest subprime lenders - Wells Fargo, Countrywide, Ameriquest, Household Finance - I've seen how their terrible, toxic loans were closed by any means necessary and eventually packaged, sold as securities, and bet upon until they exploded and decimated our economy.

In early 2005, I really studied the prospectuses of these mortgage pools that were tranched out into different-rated slices rated by agencies like S&P and Moody's. They had names like Park Place and People's Choice. It was clear to me that many of the buyers of these repackaged subprime mortgages were doing little analysis.

The CDO was, in effect, a credit laundering service for the residents of Lower Middle Class America. For Wall Street it was a machine that turned lead into gold.

The crash of 2008 was driven in no small part by unfair practices in the mortgage industry which led to many consumers being trapped in loans they didn't understand and couldn't afford.

If we are really serious about preventing another crisis like the 2008 meltdown, we should simply ban complex financial instruments unless they can be unambiguously shown to benefit society in the long run.

The people who did the collateralized mortgage obligations, sold them to pension funds, then sold them short, then bought credit default swap insurance on them, are just amazing. They are a law unto themselves.

The subprime disaster was a result of financial bombs - derivatives - exploding in financial institutions such as AIG and Lehman Brothers, as well as banks and financial institutions throughout the world.

Let us not forget, the financial crisis had its roots in the decision by Congress to embark on a course of social justice to get everyone that wanted a home into one, regardless of whether or not they could afford it.

Funny money has always been the reason housing prices have risen too fast. First, it was liar loans and negative-amortizing mortgages, where the total amount you owed increased rather than decreased every month. We all know how that ended, with the global financial crisis of 2008.

Prior to the 2008 recession, many financial institutions were engaging in 'proprietary lending,' where a bank would invest funds for its own gain instead of earning revenue through commission by trading on behalf of clients.

For my own part, I did not see and did not appreciate what the risks were with securitization, the credit ratings agencies, the shadow banking system, the S.I.V.’s — I didn’t see any of that coming until it happened.

The biggest culprits in the housing fiasco came from the private sector, and more specifically from a mortgage industry that was out of control.

Like many other banks and finance companies, Green Tree used a process called securitization to resell its home loans to outside investors. Green Tree grouped thousands of these small loans into a pool worth hundreds of millions of dollars.

Home ownership was the fig leaf for the rise in subprime lending. But that was really about cash-out refinancings, not buying homes.

The mortgage crisis is a clear instance of consumers who needed protection. There was predatory lending to people who didn't know what they were doing.

In our equities business, 49 of the 50 most important Lehman clients are back doing business with us. The flows are 75 to 80 per cent of what they were prior to the bankruptcy. The issues which damaged Lehman were around commercial mortgages and illiquid private equity assets.

If banks anticipate government will come to the rescue should the credit market go badly awry, they may make loans that would otherwise be imprudent, e.g. subprime loans with little prospect of repayment.

Over and over again, financial experts and wonkish talking heads endeavor to explain these mysterious, 'toxic' financial instruments to us lay folk. Over and over, they ignobly fail, because we all know that no one understands credit default obligations and derivatives, except perhaps Mr. Buffett and the computers who created them.

In truth, it's not the shareholders of the American International Group who benefited most from its bailout; they were mostly wiped out. The great beneficiaries have been the creditors and counterparties at the other end of A.I.G.'s derivatives deals - firms like Goldman Sachs, Merrill Lynch, Deutsche Bank, Societe Generale, Barclays and UBS.