Posted On: January 15, 2009, 7:20 am CST

Posted By: Stat Guy

The fact is that there is more than enough regulatory muscle in Treasury and the SEC but the gleam of gold was so bright that even the credit rating agencies were dazzled by the light; mix all of that pecuniary bait together and they allowed the selling of credit default swaps on individual loan to people who were not involved in the loan, i.e. lenders and lendees, to purchase them. This was essentially no better than placing a side bet at the craps table in Vegas. These types of derivatives could not be sustained when they were called in; but they were buried in legitmate swaps, which made repayment difficult at best. Credit rating folks, along with existing regulatory bodies all missed the boat; it's not that no one recognized the uncollateralized obligations or no one heard the whistle-blowing, but that the warning signs were ignored. Good business sense would have stopped the likes of Madoff, too, but remember what Gordon Gecko said: GREED works! ....at least for some and you can bet that the money that we have to cover is going somewhere other than back into the treasury.....someone made a lot of money, not all lost....