In an earlier presentation to that University of Pennsylvania’s Wharton School of Business, Dow Chemical CEO, Andrew Liveris, was astonished to learn that 70% seek careers in finance.

Aforementioned type of thinking precipitated aforementioned systemic failure of our economy.

I will return to the present prescient presentation delivered by Mr. Liveris later in this piece.

Tracking a two year study, the present U.S. Senate Permanent Subcommittee on Investigations Recently issued a 635-page bipartisan report that describes the causes of the present financial crisis.

That Chairman of this committee, Senator Carl Levin, D-Michigan, stated the follow-up: “Utilizing emails, memos in addition to else internal documents, the report tells the inside story of an economic assault that cost millions of Americans their jobs including homes, while wiping out investors, good businesses, and markets. Higher in position risk lending, regulatory failures, inflated credit ratings, including Wall Street firms engaging in massive conflicts of interest, contaminated aforementioned U.S. financial system with toxic mortgages and undermined public trust in U.S. markets. Using Their own words in documents subpoenaed by the Subcommittee, aforementioned report disclosures how financial firms deliberately took advantage of their clients in addition to investors, how credit rating agencies assigned AAA ratings to high risk securities, including how regulators sat on their hands instead of reining in the unsafe moreover unsound practices all around them. Rampant conflicts of benefit arethe threads that run through every chapter of that sordid story.”

The report cites four key aspects of the crisis: (1) higher in position risk mortgage lending by thrift institutions, (2) unjustified credit ratings by Moody’s also Standard and Poor’s, (3) creation and sales of ill-conceived financial products by investment banks, primarily Goldman Sachs, in addition to (4)ineffective government oversight moreover regulation by this Office of Thrift Supervision (OTC).

At this core: the indicated institutions knowingly participated in financial malfeasance that sowed a macroeconomic earthquake.

In 2003, Washington Mutual Bank (WaMu) embarked on a higher in position-risk mortgage lendingprogram. In a period three years, its lowrisk loan originations dropped to 25% from 64%, while its higher in position risk loansincreased to 55% from 19%. At the present time,this bank’s senior executives said the present housing market “signifies a bubble” includingthat risks “will come back to haunt us.”

In2006 plus 2007, 90% of all AAA ratings for mortgage backed securities weredowngraded to junk status pursuance sever default rates occurring in thatmarket. In 2006, more than 40% of thehigh risk subprime also Alt-A loans defaulted. In fact, that same year, Long Beach Securities was able to boast aperfect record: all 75 AAA-rated LongBeach securities it created were eventually classified as junk.

Investmentbank fees to construct , underwrite, in addition to market mortgage-backed securitiesranged from $1 million to $8 million, while that for collateralized debtobligations was between $5 million also $10 million. A handsome return for a destructive product.

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