We'll see about that. In the meantime, what we're talking about here is morality -- the bank's, and that of the politicians who so often help them escape the reach of law and fair play.
A lot of conservatives will try to blame the whole thing on black and brown people who have the audacity to think they deserve to own homes like everyone else, and to "liberals" who encouraged the dissemination of subprime loans.
Here's something they don't know: Part of the racial discrimination in this case involves the fact that many of these homeowners wouldn't have been given subprime loans if they were white. Bankers counted on patterns of racism, and on minority communities' more limited access to legal assistance, to leave them defenseless against the impact of these predatory loans.
"I've been around for a long, long year, stole many a man's soul and faith ..."
Did Rubbie McCoy, one of the plaintiffs in the lawsuit, "deserve what she got"? She didn't want to inflate her income, but her broker insisted and told her it would be all right. Her New Century/Morgan Stanley adjustable-rate loan started out at 12.14 percent and could not fall below 10.75 percent -- and, for good measure, the lawsuit says it came with "excessive fees and costs."
Why did these borrowers want to own homes in the first place? For one thing, landlords in predominately African-American areas aren't known for their pleasant demeanor and eagerness to treat their tenants as valued clients. And for another, the idea of home ownership as the American dream was pitched to them by politicians of both parties.
Society told them this was the fulfillment of a dream. Bankers told them they could afford these loans. And when they were victimized, everybody turned their backs.
In what's become usual practice for Wall Street, Morgan Stanley "neither confirmed nor denied wrongdoing" in that Massachusetts settlement. But you know what? I kinda think they did admit it -- when they agreed to pay $102 million to stop that investigation.
"As heads is tails, just call me Lucifer, 'cause I'm in need of some restraint ..."
Here's a lucky break for our friends at Morgan Stanley: That Massachusetts settlement was less than one one-hundredth of the $107 billion it borrowed from the Federal Reserve. And since the American people created the Federal Reserve, that means that we rescued Morgan Stanley. Felix Salmon came up with a handy chart that illustrates the extent of our generosity:
At the worst point, where the lines are farthest apart, we (as the Fed) saved Morgan Stanley by lending it nearly 10 times what it was worth. And to show their appreciation, the executives (and the Board) at Morgan Stanley ripped our faces off.
What a grotesque phrase: "ripped his face off." Know where I got it? Morgan Stanley. As Frank Portnoy wrote in Fiasco that's what Morgan Stanley's brokers used to see after they'd convinced one of their own clients to invest in something the firm knew was lousy. Their own clients ...
The Treasury Department loves to say that the public "made back its money" on loans like the one Morgan Stanley received. But what did we get for rescuing them when, by any reasonable measure, their firm was worse than worthless?
Have we "made back our money" on the ongoing cost to our economy -- and our society -- of allowing predators to roam free?
I. Ripped. His. Face. Off.