The FCIC report misses the point in a major way, as Yves Smith points out.
The market was actively seeking bad mortgage loans, because they made much more money shorting the bad loans than they did on originating good ones. Michael Lewis describes this in his book, “The Big Short.” Matt Taibbi’s been screaming it from the rooftops.
But somehow, the FCIC missed it. Or missed it on purpose. Because no regulation with real teeth was put into place that will prevent it from happening again, so Wall St. got their money’s worth.