Two Scapegoats Charged in Growing Subprime Crisis
by Jeff Davis
The System appears to have come to appreciate the need for a few sacrificial lambs to blame for the ongoing economic crash. Two Bears Stearns executives are the first to be thrown in the volcano.
A Bloomberg news article reports “Bear Stearns Company former hedge fund managers Ralph Cioffi and Matthew Tannin were taken into custody at their homes this morning over their roles in the collapse of two funds that ignited the subprime mortgage crisis last year. The arrests are the first from a federal probe of possible fraud by banks and mortgage firms whose investments in subprime loans and securities plunged in value, causing losses that now total $396.6 billion. The Securities and Exchange Commission may sue the two men as early as today, claiming they committed fraud by falsely telling investors the funds they managed were in good condition, people with knowledge of the case said.”
Like they were going to tell their investors “We’re growing our business by making $500,000 home loans to crack heads and other people, who would not qualify for a credit card.” (more…)