There has been much finger-pointing over the years about who and what caused the financial meltdown in 2008. The big banks and Wall Street did an incredibly effective job of selling the idea that it was over-regulation on them and political pressure on Fannie Mae and Freddie Mac to lend to unqualified borrowers that did us all in.
To those of us who were there it was always particularly galling and frustrating. We regularly had reps from sub-prime mortgage companies owned by the Wall Street Banks and the Big Banks (yes, those ones) in our offices offering us significantly higher commissions if we would only sell their toxic products.
Fortunately in the last couple of years a lot of the malfeasance has finally come to light. The latest revelation comes from a Department of Justice investigation into Morgan Stanley and their relationship with New Century Mortgage, one of the largest of the sub-prime lenders leading up to the crash. It turns out that Morgan Stanley was pushing New Century to create more and more toxic loans, and that employees at the company actually knew about, and joked about, borrowers who could never repay the loan they were given.
The only disappointing thing is that this investigation will end up in a settlement, and no one will likely go to jail. But at least the story is being told, and if folks are paying attention we have a little more insight into what caused the financial meltdown.
You can read the article here. And Google “Morgan Stanley Investigation” for some fun reading.