erik lundegaard

Another Happy Ending

"Really, it was a federal issue. Household [Finance Corporation] was peddling these deceptive mortgages all over the country. Yet the federal government failed to act. Instead, at the end of 2002, Household settled a class action suit out of court and agreed to pay a $484 million fine distributed to twelve states. The following year it sold itself, and its giant portfolio of subprime loans, for $15.5 billion to the British financial conglomerate the HSBC Group.

"Eisman was genuinely shocked. 'It never entered my mind that this could possibly happen,' he said. 'This wasn't just another company—this was the biggest company by far making subprime loans. And it was engaged in just blatant fraud. They should have taken the CEO out and hung him up by his fucking testicles. Instead they sold the company and the CEO made a hundred million dollars. And I thought, Whoa! That one didn't end the way it should have.'"

—from Michael Lewis' "The Big Short: Inside the Doomsday Machine," pg. 18

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Posted at 01:20 PM on Thu. Apr 22, 2010 in category Business  

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