Re: The Reckoning - WaMu Built an Empire on Bad Loans - Series - NYTimes.comworth readingin full

[David Farber <dave () farber net>]

Begin forwarded message:

From: "Erik Cecil" <erik.cecil () gmail com>
Date: December 28, 2008 1:21:54 PM EST
To: dave () farber net
Subject: Re: [IP] The Reckoning - WaMu Built an Empire on Bad Loans -  
Series - NYTimes.comworth readingin full

Dave,

After more than a dozen years practicing administrative law in D.C.,
corporate and state regulatory practices, I have yet to encounter, and
doubt I ever will, a regulatory issue that did not boil down to two
issues: jurisdiction and money.  Regardless of sector or regulatory
agency, following these two parameters always yeilds the most
consistent analytical results.   While early in my career I would
examine every case and every policy statement trying to make sense of
it all, after years practice including extensive litigation, I simply
track who gets what and then turn my attention to the law and policy.

If I have learned anything from the experience it is that regulatory
agencies possess unique power - they have both judicial and
legislative power because unlike any other branch they make the rules
they enforce and vice versa -  and as such can do great harm or great
good.  As a further result rarely do they actually accomplish status
quo as law and regulation always lags - sometimes by decades -
technology, business, and market conditions.

This is illustrated by the stupefying scope and scale of regulatory
and political blindness illuminated by events such as those recounted
in the NYT article.   Whatever we do going forward, we must ensure
visibility, transparency, and thus accountability.  It means that if
the politicians, regulators or lawyers cannot concisely explain what
is going on in ways pellucid to non-expert, then follow the money (and
jurisdiction if relevant - i.e. which agency, state or federal, gets
to decide the question) and figure it out yourself.  To do otherwise
is to learn by result rather than by design.

Let us learn, therefore, that the regulators and politicians were not
necessarily alone in creating this.  Let us learn that we, the public,
who ultimately reap any rewards but always bear the costs, are by
definition ultimately responsible for it.   Either we are watching,
active and involved *or* the machine is on autopilot.

This time around, I for one, will follow the money and the political
consequences - always and in all ways.  This approach, however, is
neither skeptical nor cynical.  Nor do I cast any aspersions on
politicans or regulators.  The vast majority in my lengthy career and
personal experience working directly with regulators and politicians
nationwide on behalf of clients seeking to gain the best position
possible relative to law, technology and business conditions *are*
very smart, completely dedicated, unquestionably ethical, and tireless
public servants doing their absolute *best* within a decent but
imperfect system.  *Rather* it is to observe the nature of an
imperfect system while suggesting that visibility and accountability
matter *only* to the extent that the public is awake, paying
attention, and participating.  It means that despite the chaos,
including, for me, being laid off as the sole source of income for a
relatively large and young family,  I remain *very optimistic* about
the changes we are seeing and will continue to see for a very long
time to come: visibility, greater transparency, increased public
participation, and improved design that comes from broad
accountability.

The ultimate reckoning is ours.  There is *no* avoiding the fact that
*we are the system* and that we must do our collective best - however
imperfectly -  to serve it.  We can start by watching, following the
causes of action rather than their justifications,  by holding
accountable in the sense that we choose by design rather that wait for
others' results,  but we do not blame and instead agree that we are
all in this together.  If we do, we cannot help but take action
consistent with *all* of the public's interests.

The future is integrated and participatory.   It starts right now.

Giddy up!

Erik Cecil, Esq.

On 12/28/08, David Farber <dave () farber net> wrote:
> http://www.nytimes.com/2008/12/28/business/28wamu.html?_r=1&hp
>
>
> By Saying Yes, WaMu Built Empire on Shaky Loans
>         
> By PETER S. GOODMAN and GRETCHEN MORGENSON
> Published: December 27, 2008
> "We hope to do to this industry what Wal-Mart did to theirs,Starbucks
> did to theirs, Costco did to theirs and Lowe's-Home Depotdid to their
> industry. And I think if we've done our job, five years from now
> you're not going to call us a bank."
>
>
> SAN DIEGO — As a supervisor at a Washington Mutual mortgage processing
> center, John D. Parsons was accustomed to seeing baby sitters claiming
> salaries worthy of college presidents, and schoolteachers with incomes
> rivaling stockbrokers'. He rarely questioned them. A real estate
> frenzy was under way and WaMu, as his bank was known, was all about
> saying yes.
>
> Yet even by WaMu's relaxed standards, one mortgage four years ago
> raised eyebrows. The borrower was claiming a six-figure income and an
> unusual profession: mariachi singer.
>
> Mr. Parsons could not verify the singer's income, so he had him
> photographed in front of his home dressed in his mariachi outfit. The
> photo went into a WaMu file. Approved.
>
>
>
> <snip>
>
> -------------------------------------------
> Archives: https://www.listbox.com/member/archive/247/=now
> RSS Feed: https://www.listbox.com/member/archive/rss/247/
> Powered by Listbox: http://www.listbox.com

--
Sent from my mobile device



_______________________________________
skype: erikcecil
tweets: https://twitter.com/zenlaw
mobile: 720-250-8889




-------------------------------------------
Archives: https://www.listbox.com/member/archive/247/=now
RSS Feed: https://www.listbox.com/member/archive/rss/247/
Powered by Listbox: http://www.listbox.com