Gasbagarino: Shut Up


Seriously, there’s a difference between being rather foolish and outright bullcrap.

The point is, what looks like a crime — at least as presented by a publicity-hungry AG or an agenda-driven filmmaker — often isn’t one.

Most of what went on in the buildup to the 2008 financial crisis wasn’t criminal fraud as much as it was a collective bout of greed and stupidity — aided and abetted by years of government rescues that gave big-firm CEOs every reason to believe there was no real downside risk.

What’s this Charlie?  Remember, this is sworn testimony given under oath:

These mortgages were sold to Fannie Mae, Freddie Mac and other investors. Although we did not underwrite these mortgages, Citi did rep and warrant to the investors that the mortgages were underwritten to Citi credit guidelines.

In mid-2006 I discovered that over 60% of these mortgages purchased and sold were defective. Because Citi had given reps and warrants to the investors that the mortgages were not defective, the investors could force Citi to repurchase many billions of dollars of these defective assets. This situation represented a large potential risk to the shareholders of Citigroup.

I started issuing warnings in June of 2006 and attempted to get management to address these critical risk issues. These warnings continued through 2007 and went to all levels of the Consumer Lending Group.

We continued to purchase and sell to investors even larger volumes of mortgages through 2007. And defective mortgages increased during 2007 to over 80% of production.

What is intentionally selling defective loans to people Charlie?  Representing something to buyers you know is not true?

Collective greed or criminal fraud?

Answer the question please.

No weasel-word bullshit.