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Wall Street's chain yankers would like you to know they care not for the plan to help Detroit

by: Eric B.

Wed Jan 29, 2014 at 16:11:55 PM EST


Back, lo these many years ago, the good people of Wall Street had a plan. They would take the important work done by the people in the subprime mortgage lending industry and devise complex ways to make a boatload of cash off it. In reality, it was a race, really, whereby everyone would spring ahead like made and eventually the race would end and everyone except, like, two or three people would drop dead of heart attacks.

Their plan was an ingenious as it was mad. They took bundles of shitty mortgages everyone expected to go bad at some point in the very near future, chopped them apart and rebundled it all, selling as many as possible as safe investments. They would then sell them to pension funds and other gullible people who thought they were prudently investing money (or who didn't care because everyone else had their hands out, so why shouldn't they). Nobody worried that undergirding these investment bundles were a bunch of mortgages sold by unscrupulous lenders to people with terrible credit and no hope of ever meeting their obligation, because ... well ... profits. Why worry?

Their plan required two things: Regulators who were either too buffaloed by these new investment products to understand the inherent risk or had too close a relationship with the people trading in them, and ratings agencies staffed by the dullards of Wall Street, who simply took everything that was handed to them without worrying if it was maybe a giant fib and who awarded the highest grade investment rating on the grounds that absolutely no one would hold them accountable after the things all imploded.

Wall Street got its wish, and the rest as my old aunt Myrtle says, is l'histoire.

We fast forward to today, in the Year of Our Lord 2014, where meet up again with our good friend the rating agency.

Those comments apparently didn't sit well with Fitch Ratings, one of the country's top agencies, which criticized the "us versus them" tone and said prioritizing pensions over bondholders may "establish a troubling precedent" in Michigan and beyond.

"As the state and city continue down what could be a long road, actions and rhetoric that suggest bondholder rights are not an important consideration will continue to damage market perception of the state and its local governments," Fitch said in a statement.

We could be excused if we didn't take the word of our good friends at Fitch with a wee grain of salt ... the size of Rhode Island. Translated from OBEY YOUR WALL STREET OVERLORDS OR PERISH IN FLAMES-ese into English, what it's really saying is, "That's a nice city of Detroit you got there. Hate to see anything happen to it."

By the way, in the aftermath of the near-collapse of global finance, it's been pointed out by more than one person that the Wall Street investment banks suffered barely the indignity of arrest and conviction for massive swindling and fraud therein (although to hear tell by the squealing, there were plenty of hurt fee-fees to go around). The regulatory agencies suffered even less. Suffering none at all for their role in it all? Our rating agencies, which if you read books by insiders about the crisis, are mostly staffed mostly with the industry's least talented minds.

Eric B. :: Wall Street's chain yankers would like you to know they care not for the plan to help Detroit
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