From the NY Times:
Attorney General Andrew M. Cuomo of New York has subpoenaed major Wall Street firms including Merrill Lynch, Morgan Stanley and Deutsche Bank, seeking information about the business of packaging and selling subprime mortgages, according to people briefed on the subpoenas.
The subpoenas, sent out in late summer, are part of a wide review of the mortgage industry by Mr. Cuomo’s office into the mortgage business. The subpoenas were reported today by The Wall Street Journal.
Wall Street has played a major role in the boom in lending to buyers with weak credit records. It has extended credit to mortgage originators to allow them to offer more mortgages, bought companies that originate and service mortgages, and perhaps most importantly, packaged the mortgages into securities to sell to investors.
--It would be nice if they would have done something five years ago before we got into this mess. This political environment reminds me a lot of the post Enron period, where politicians talked a lot but did very little to solve the incentive problems. Get the full version here.
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