Photo Credit: Matt Callow
Want to read an interesting op-ed on the financial industry? Yesterday, I found a really good article at the NY Times’ site, The End of the Financial World as We Know It
I think the title is a bit overboard, but some pretty good points are raised. Here’s a few quites that caught my attention:
Mr. Markopolos is the former investment officer with Rampart Investment Management in Boston who, for nine years, tried to explain to the Securities and Exchange Commission that Bernard L. Madoff couldn’t be anything other than a fraud. Mr. Madoff’s investment performance, given his stated strategy, was not merely improbable but mathematically impossible.
The articles points out that his report in 2005, but he spoke out against the fraud since 1999. How did the S.E.C. find his report?
And yet the S.E.C.’s cursory investigation of Mr. Madoff pronounced him free of fraud.
I also found out a bit more of the conflicts of interests for the credit rating.
Over the last 20 years American financial institutions have taken on more and more risk, with the blessing of regulators, with hardly a word from the rating agencies, which, incidentally, are paid by the issuers of the bonds they rate.
It’s worth 20 minutes of your time, if only to encourage you to look deeper into the financial situation in the United States. Let me know what you think if you have a chance.
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