Banker Derangement Syndrome I: Lawyers Offer to Get Rid of Their Profession to Save the TARP Banks

We’ve decided to publicize the rapid rise of a dangerous ailment, Banker Derangement Syndrome, which has become so widespread that the media is publicizing examples on virtually a daily basis.

Banker Derangement Syndrome occurs when someone who might once have been sensible is acting as a mindless mouthpiecs of particularly rancid banking industry propaganda. Note that financial services industry employees by definition do not qualify; they are simply engaging in the time-honored industry practice known as “talking your book” when they say something that is patently ridiculous and self serving. No, Banker Derangement Syndrome occurs when an independent party say something so blatantly and embarrassingly wrong in support of the banking industry, whether to curry favor or via having taken an overdose of its Kool Aid, so as to do severe damage to their credibility. In other words, if the questionable behavior could be explained as an over-zealous effort to win points with our new financial overlords, it backfired big time.

The initial example comes in a Wall Street Journal story which finally caught up with what we have been discussing on this blog for a year, namely, that the originators and packagers of residential mortgage securities on a large scale, perhaps pervasive basis, quit complying with the requirements of their own securitization agreements as far as how the borrower notes (the IOUs) were conveyed to the securitization vehicle (a trust).

Check out the rest here…

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