As proof that the notions that Private Equity, Hedge Funds and the Investment Banks are out of fiduciary trust limits and without control I will offer various articles by respected journals. Here are some sources:
Business Week – huge debt levels smack against the Wall of Debt calls
Barrons – December 24, 2007 Cover Story
” Failing Grade. Its time to fix the rating agencies, like Moody’s and S&P which helped to ignite the mortgage bomb. Whats’s needed ? More competition and …”
Economist View – argues that Feds/FRB dodged chance to curb lending problems
Economist – March 22, 2008:
“the problem – counterparty risk – has been roiling the markets lately…even with collateral, sorting out a counterparty default would be a nightmare. Hence the Federal Reserve’s extraordinary measures to keep Bears Stearns [ a major counterparty player] from falling into bankruptcy. ‘If Bear Stearns had failed, banks would not have known where they were for days or weeks’ says a hedge-fund manager. The markets might well have frozen and other banks might have collapsed… ”
Motley Fool – The Fed is knuckling under to the Walls Street in ever risky fashion
Stay tuned for more reading as the Walls Street Insiders spend their billions in compensation to guarantee that they will not be subject to SOX-Sarbanes Oxley like legislation. In that regard it is noteworthy that SOX, despite the beefing by corporates and Investment houses, is credited with being very effective in reducing what was a growing scourge of accounting, investment advisory and auditing misdeeds.