from Wealth Cycles:
Earlier this month the United States government finally brought legal action against some of the financial institutions that helped bring us the 2008 financial crisis. Yet, even as a handful of the biggest offenders face at least a modicum of justice, the Federal Reserve’s ongoing blank-check support for mortgage-backed securities enables the very behavior that nearly took down the global economy and undercuts any real efforts at reform.
On August 6, the U.S. Securities and Exchange Commission (SEC) and Department of Justice filed suit against Bank of America, alleging that the bank sold $855 million of fraudulent mortgage-backed securities. (For more on mortgage-backed securities and the role they played in the 2008 crash, see our WealthCycles article, Blaming Credit Default Swaps, or our video commentary, Michael Burry’s Sad Success Story.)