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How J.P. Morgan and Barclays Mistakes Inflated the Housing Bubble
by Elliot Blair Smith
Market Watch
If I had to depend on Wall Street or Washington for an explanation of what ails the U.S. financial economy, I’d probably pick neither one. My choice would be John Griffin, a cowboy boots-wearing University of Texas financial professor, who has been on something of a roll.
Six years before Standard & Poor’s agreed to pay $1.4 billion to settle state and federal government lawsuits alleging it inflated credit ratings on securitized mortgage debt, Griffin revealed—with mathematical precision—how S&P degraded its own analytical model to issue puffed-up grades.
Seven months before J.P. Morgan Chase agreed to pay $13 billion to resolve state and federal claims that it misled investors on toxic mortgage securities—the largest financial settlement with a single entity in U.S. history—Griffin showed how the bank had originated a disproportionate share of securitized mortgages flawed by undisclosed second liens (among other reporting problems).
Continue Reading at MarketWatch.com…
Source: http://financialsurvivalnetwork.com/2015/06/how-j-p-morgan-and-barclays-mistakes-inflated-the-housing-bubble/?utm_source=rss&utm_medium=rss&utm_campaign=how-j-p-morgan-and-barclays-mistakes-inflated-the-housing-bubble
