Morgan Stanley to pay $150 million for pushing toxic mortgage bonds

[blue-wave]

Morgan Stanley has agreed to a $150 million settlement to resolve claims that it misrepresented the poor-quality of pre-crisis mortgage bonds and cost California teachers and public employees millions of dollars, the California Attorney General announced Thursday.

The charges claimed that Morgan Stanley concealed the high-risk quality of the mortgage-backed securities it sold to the California Public Employees’ Retirement System and the California State Teachers Retirement System from 2003 to 2007. <snip>

<snip> It concluded that the bank was aware of the misrepresentation but did not remove the poor-quality loans from the investments, because of concerns that such an admission would be a “relationship killer” with the companies making the risky loans.


Full Article: https://www.housingwire.com/articles/48888-morgan-stanley-to-pay-150-million-for-pushing-toxic-mortgage-bonds-on-californias-teachers-and-public-employees





Yes, part of the reason for the mess retirement funds are in today.

[JHB]

1. And how much did they make from that "misrepresentation"?

Need I even wonder if it was much more than the settlement?

[Pantagruel]

3. Since the suit took years,

the penalty probably didn't even equate to the interest they made on their ill gotten gains. Business as usual for corporate Amerika.

[turbinetree]

2. They really should be removed from operating and anything else they have there hands in............

fucking blood octopus, that people are still paying for, lost homes etc........ and 150 million, chump change............... when you pay nothing in taxes, they should have people in jail for this crap.............................."criminal intent" is still "criminal intent" and that includes fraud and deception.......................

[jmowreader]

4. The sick part is they're not alone

Toxic MBS and CDO derivatives were the Junk Bonds of the Aughts...the whole mortgage industry was being run to raise money for corporate raids.

I hold responsible:

The corporate raider class.
The banks that enabled them.
The investors who bought this crap, many times without understanding what they were getting into. (Prime example: the Goldman Sachs “scandal.” The popular press claims it was so terrible that GS got rich and it’s investors lost all their money...Problem is, the prospectus said that’s exactly what would fucking happen. A “synthetic CDO” is a casino play: we build a pool of credit default swaps. We then sell shares in it to marks. If the people who bought the houses the CDS are written against pay their loans off, the marks get money. If they go into foreclosure, the bank does. Under that scenario, why does it surprise anyone that GS found the most disastrous mortgages on the face of the planet to bet against?)
The carpenters tho built houses no one could actually afford.
The media that sold these places as a mandatory part of your lives.
And the idiots who bought houses they couldn’t afford in the first place, but them I’ll let slide a bit: when you walk into a bank and a woman dressed in a suit that costs more than your car says you can afford the house, you think you really can afford the house.

I also think we truly fucked up when we wrote Dodd-Frank: the most toxic derivatives should have been banned, and each derivative should have required a license to sell -part of which would be explaining what the security did. Like Fabrice Torre said, no one understands these things.

[onethatcares]

5. leave the carpenters out of this one, please?

we just do what we know how to do. It's not like we get rich off the loans or derivatives or any of the above. We work, we think we're doing ok, then we get layed off and go back to square -3 and start all over again until we're too old and sore to go on.

[jmowreader]

6. If you'd like to read that as "construction companies," that works too

SOMEONE decided every damn house built in America since Clinton's second term had to be 3000 square feet with granite countertops and Sub-Zero refrigerators.

[onethatcares]

7. twasn't we carpenters though

Personally, I'd prefer 1000 sf or less, single story with ADA facets throughout.

I also think the prices have gone out of sight mainly because I bought the one I live in now for 27,900.00 and had to have 10% of that in the bank in cash at closing.

It took forever to get $3K together. I can't imagine having to pay more for an automobile than my house.

But, back to the post. It wasn't the carpenters it's the damn developers.

RIght here in west central coastal Floriduh we are running out of fresh water. The PTBs are allowing massive condominium and apartment projects to be built on wetlands or close to them. They build them out of shitboard, that would be OSB sheathing on the roofs and walls. They get wet prior to dry in, then they have mold problems. And we're still out of water. Next step, inject our sewerage water into the aquifier and pump it back out for human consumption or you can buy bottled Nestle water for 4 bucks a 35 bottle case.

Gaud, I need a drink.