PSYCHOPATHS MAKE
THE WORLD GO 'ROUND
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/feels slightly validated...I always said "sociopaths", but hey, I'll take it.

I think the author of this may have some issues himself.

I work in finance as a financial planner.


I work for one of the largest financial companies in the world.


I have more degrees, licenses and professional certifications than 95% of my colleagues.


I believe that the free market does more to increase the democratization of the world than any other force in human history.


I believe that all people should have equal access to the process, no matter what their asset level.


I consistently hide the last two facts from my colleagues.


I consistently hide all of these facts from everyone else I speak with.

My first green light.

So proud


D) I caused the Financial Crisis.

What a farking stupid article. Of course some a-hole professor of Business Ethics is going to blame the crisis on a lack of ethics.

Never farking mind the millions of individuals who willingly participated in the bubble by actively seeking to buy a home and seeking financing for that home, at prices which doubled or more in the previous 5 years. Never mind the overly loose monetary policy that fed the bubble. Ignore the willingness of investors and lenders to provide ever increasing amounts of capital for housing finance. Forget about the massive role government had in inflating the bubble through the GSEs. No, no, it's all the fault of some psychopath CEOs.

busy chillin': PSYCHOPATHS MAKE
THE WORLD GO 'ROUND
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/feels slightly validated...I always said "sociopaths", but hey, I'll take it.

Came in here to ask what the difference is.

I remember reading an article awhile back talking about how succesful psycopaths are in business. It used the banking industry as a primary example.

C) Psychopaths

Did Goldman Sachs change its name?

Debeo Summa Credo: What a farking stupid article. Of course some a-hole professor of Business Ethics is going to blame the crisis on a lack of ethics.

Never farking mind the millions of individuals who willingly participated in the bubble by actively seeking to buy a home and seeking financing for that home, at prices which doubled or more in the previous 5 years. Never mind the overly loose monetary policy that fed the bubble. Ignore the willingness of investors and lenders to provide ever increasing amounts of capital for housing finance. Forget about the massive role government had in inflating the bubble through the GSEs. No, no, it's all the fault of some psychopath CEOs.

Who is more culpable: the drug addict or drug dealer?

Omnivorous: C) Psychopaths

Did Goldman Sachs change its name?

Sachsopaths

Debeo Summa Credo: Never farking mind the millions of individuals who willingly participated in the bubble by actively seeking to buy a home and seeking financing for that home

You always forget to mention the part where the banks told them they could afford it and had a bunch of fancy numbers to back up the claim.

Where is the Venn diagram that shows the overlap between Bankers and Psychopaths?

I'm going with A) and C), as they're not mutually exclusive. As a matter of fact, the Venn diagram probably looks like a cross section of a hard-boiled egg.

Debeo Summa Credo: What a farking stupid article. Of course some a-hole professor of Business Ethics is going to blame the crisis on a lack of ethics.

Never farking mind the millions of individuals who willingly participated in the bubble by actively seeking to buy a home and seeking financing for that home, at prices which doubled or more in the previous 5 years. Never mind the overly loose monetary policy that fed the bubble. Ignore the willingness of investors and lenders to provide ever increasing amounts of capital for housing finance. Forget about the massive role government had in inflating the bubble through the GSEs. No, no, it's all the fault of some psychopath CEOs.

Psychopaths helped the greedy and stupid to fark us all.

Why Yes I Am A Wizard: Debeo Summa Credo: What a farking stupid article. Of course some a-hole professor of Business Ethics is going to blame the crisis on a lack of ethics.

Never farking mind the millions of individuals who willingly participated in the bubble by actively seeking to buy a home and seeking financing for that home, at prices which doubled or more in the previous 5 years. Never mind the overly loose monetary policy that fed the bubble. Ignore the willingness of investors and lenders to provide ever increasing amounts of capital for housing finance. Forget about the massive role government had in inflating the bubble through the GSEs. No, no, it's all the fault of some psychopath CEOs.

Who is more culpable: the drug addict or drug dealer?

I would say both, that it takes two to tango (under the assumption that the transaction is bad). One side exhibits a combination of greed (which I would argue everybody has) along with apathy. The other (in the drug example) whatever desire to escape compels them to do drugs (I'm no psychologies so have no idea what this is called). In the case of the mortage crising, everybody had some issue that caused the whole thing to collapse when combined. But you can argue that in this case, a really bad combination of character traits along with a consolidation of power caused the collapse. In this case, that was with the bankers.

The US system used to rely on distribution of power down to the people. Now it is a consolidation of power in both DC and corporations. Until we break up both, people with the most ambition and apathy will continue to find their way into the power seats and take advantage of their power.

plcow: busy chillin': PSYCHOPATHS MAKE
THE WORLD GO 'ROUND
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/feels slightly validated...I always said "sociopaths", but hey, I'll take it.

Came in here to ask what the difference is.

I remember reading an article awhile back talking about how succesful psycopaths are in business. It used the banking industry as a primary example.

There have been lots of studies (some valid, some questionable) like that. I've always wondered if they bothered looking at government as well. Whoever thinks psychopaths are exclusively drawn to the business world has never worked in government/law enforcement.

plcow: Why Yes I Am A Wizard: Debeo Summa Credo: What a farking stupid article. Of course some a-hole professor of Business Ethics is going to blame the crisis on a lack of ethics.

Never farking mind the millions of individuals who willingly participated in the bubble by actively seeking to buy a home and seeking financing for that home, at prices which doubled or more in the previous 5 years. Never mind the overly loose monetary policy that fed the bubble. Ignore the willingness of investors and lenders to provide ever increasing amounts of capital for housing finance. Forget about the massive role government had in inflating the bubble through the GSEs. No, no, it's all the fault of some psychopath CEOs.

Who is more culpable: the drug addict or drug dealer?

I would say both, that it takes two to tango (under the assumption that the transaction is bad). One side exhibits a combination of greed (which I would argue everybody has) along with apathy. The other (in the drug example) whatever desire to escape compels them to do drugs (I'm no psychologies so have no idea what this is called). In the case of the mortage crising, everybody had some issue that caused the whole thing to collapse when combined. But you can argue that in this case, a really bad combination of character traits along with a consolidation of power caused the collapse. In this case, that was with the bankers.

The US system used to rely on distribution of power down to the people. Now it is a consolidation of power in both DC and corporations. Until we break up both, people with the most ambition and apathy will continue to find their way into the power seats and take advantage of their power.

I appreciate your feedback, but the question was who is more culpable.

I would argue the banks because they had no reason (other than pure greed) to do what they did. As for people who got loans they couldn't afford they were attempting to live "The American Dream". Sure they should have been more diligent, but answer me this:

How much about applicable knowledge about banking and finance were you taught in school?

We barely cover these subjects and yet expect everyone to understand arcane and complex legal principles and language. It was a pure con job and defending the banks just allows them to get away with it.

Wireless Joe: I'm going with A) and C), as they're not mutually exclusive. As a matter of fact, the Venn diagram probably looks like a cross section of a hard-boiled egg.

But which is the white and which is the yolk? Is it possible to be a psychopath without being a banker?

WellBelowAverage: Where is the Venn diagram that shows the overlap between Bankers and Psychopaths?

D)Everyone but me.

If one were to evaluate a corporation (not the individuals in it) under the lens of a psychopathy test, which examines motivations, logical reasoning, views of self and others, etc., a corproration would test out as a 100% psychopath. Understandable because they're not human. But it makes you wonder why the U.S. seems so eager to treat them as people and grant them individual protections under the U.S. Constitution.

Sergeant Grumbles: Debeo Summa Credo: Never farking mind the millions of individuals who willingly participated in the bubble by actively seeking to buy a home and seeking financing for that home

You always forget to mention the part where the banks told them they could afford it and had a bunch of fancy numbers to back up the claim.

You always forget to mention how every homebuyer actively decided to buy homes and actively sought financing.

You always forget to mention that the single person who knows best their ability to service a loan is the borrower himself. "Fancy numbers"?? Is that what you're hanging your hat on?

You always forget that intentionally making bad loans is the stupidest business decision ever, and that lenders who do that go out of business, and that it is certifiably insane to believe that all these CEOs actually believed that they were writing bad loans. They bought into the bubble, same as all the homebuyers. That's why they got into trouble.

Why Yes I Am A Wizard: plcow: Why Yes I Am A Wizard: Debeo Summa Credo: What a farking stupid article. Of course some a-hole professor of Business Ethics is going to blame the crisis on a lack of ethics.

Never farking mind the millions of individuals who willingly participated in the bubble by actively seeking to buy a home and seeking financing for that home, at prices which doubled or more in the previous 5 years. Never mind the overly loose monetary policy that fed the bubble. Ignore the willingness of investors and lenders to provide ever increasing amounts of capital for housing finance. Forget about the massive role government had in inflating the bubble through the GSEs. No, no, it's all the fault of some psychopath CEOs.

Who is more culpable: the drug addict or drug dealer?

I would say both, that it takes two to tango (under the assumption that the transaction is bad). One side exhibits a combination of greed (which I would argue everybody has) along with apathy. The other (in the drug example) whatever desire to escape compels them to do drugs (I'm no psychologies so have no idea what this is called). In the case of the mortage crising, everybody had some issue that caused the whole thing to collapse when combined. But you can argue that in this case, a really bad combination of character traits along with a consolidation of power caused the collapse. In this case, that was with the bankers.

The US system used to rely on distribution of power down to the people. Now it is a consolidation of power in both DC and corporations. Until we break up both, people with the most ambition and apathy will continue to find their way into the power seats and take advantage of their power.

I appreciate your feedback, but the question was who is more culpable.

I would argue the banks because they had no reason (other than pure greed) to do what they did. As for people who got loans they couldn't afford they were attempting to live "The American Dream". Sure they should have been mo ...

One of the largest reasons the stack of cards in question fell is because there were quite a few prime borrowers with good credit ratings who LIED about their income levels.

There was greed at every level of these transactions and a bubble characteristically begins by having all players start changing their behavior in response to what turns out to be an unbelievable deal: people lying to get loans, people flipping houses, banks beginning to head into subprime land, investment banks bundling the securities, ratings companies either being inept or bent, and politicians of both sides of the isle treating Fannie Mae and Freddie Mac like reverse earmarks.

Debeo Summa Credo: What a farking stupid article. Of course some a-hole professor of Business Ethics is going to blame the crisis on a lack of ethics.
No, no, it's all the fault of some psychopath CEOs.

The subprime mortgage market was worth 1.3 trillion at its peak. If that were the problem the banks alone could have absorbed the blow.

That is not a large enough number to crater world markets, but the CDO's that were devised by said psychopaths sure were. 62 Trillion by the end of 2007.

BullBearMS: Some account executives earned a commission seven times higher from subprime loans, rather than prime mortgages. So they looked for less savvy borrowers - those with less education, without previous mortgage experience, or without fluent English - and nudged them toward subprime loans.

These less savvy borrowers were disproportionately blacks and Latinos, he said, and they ended up paying a higher rate so that they were more likely to lose their homes. Senior executives seemed aware of this racial mismatch, he recalled, and frantically tried to cover it up.

Theckston, who has a shelf full of awards that he won from Chase, such as "sales manager of the year," showed me his 2006 performance review. It indicates that 60 percent of his evaluation depended on him increasing high-risk loans.

Wow, certain demographics with different average levels of educational attainment are less likely be shop well for financial products. You don't say... What starts out as "spreading affordable housing opportunities to people on the margins" becomes "predatory lending" mighty quickly when things go wrong doesn't it?

So clearly we need another agency like the Consumer Financial Protection Bureau to produce yet more regulations and disclaimers to compensate for how stupid most Americans are that will go into a mortgage document the size of a phone book that no one actually reads most of the time anyway and will add to the already ~$15,000 worth of compliance costs for processing every new mortgage...which is built in as a higher interest rate for all of us.

Amagi: Wow, certain demographics with different average levels of educational attainment are less likely be shop well for financial products.

Is this your attempt to draw attention away from the psychopaths who were pushing fraudulent loans because they were more profitable for the lender? (At least in the short term.)

There was fraud at every step in the home finance food chain: the appraisers were paid to overvalue real estate; mortgage brokers were paid to induce borrowers to accept loan terms they could not possibly afford; loan applications overstated the borrowers' incomes; speculators lied when they claimed that six different homes were their principal dwelling; mortgage securitizers made false reps and warranties about the quality of the packaged loans; credit ratings agencies were overpaid to overrate the securities sold on to investors; and investment banks stuffed collateralized debt obligations with toxic securities that were handpicked by hedge fund managers to ensure they would self destruct.

That homeowners would default on the nonprime mortgages was a foregone conclusion throughout the industry -- indeed, it was the desired outcome. This was something the lending side knew, but which few on the borrowing side could have realized.

The homeowners were typically fraudulently induced by the lenders and the lenders' agents (the loan brokers) to enter into nonprime mortgages. The lenders knew the "loan to value" (LTV) ratios and income to debt ratios that they wanted the borrower to (appear to) meet in order to make it possible for the lender to sell the nonprime loan at a premium. LTV can be gimmicked by inflating the appraisal. The debt to income ratios can be gimmicked by inflating income. "Liar's" loan lenders used that loan format because it allowed the lender to simultaneously loan to a vast number of borrowers that could not repay their home loans, at a premium yield, while making it look to the purchaser of the loan that it was relatively low risk. Liar's loans maximized the lender's reported income, which maximized the CEO's compensation.

Amagi: One of the largest reasons the stack of cards in question fell is because there were quite a few prime borrowers with good credit ratings who LIED about their income levels.

You mean after the Banks made all those highly profitable looking NINJA loans where the lender made no effort whatsoever to verify that the borrower had any Income, any Assets or even a Job?

(No Income No Job or Assets = NINJA) (Also called Liars Loans)

You set out to encourage fraudulent loans and you get them??? ASTONISHING!

Debeo Summa Credo: You always forget that intentionally making bad loans is the stupidest business decision ever, and that lenders who do that go out of business get bailouts.

The home-buyers have little to no responsibility for this mess. They were told my "experts", real estate agents, loan officers, and bankers, that they could afford a house through fancy mortgages and appreciation of home value. Since most did have little knowledge of the process, they trusted the experts under the assumption that the experts wouldn't intentionally make bad loans. The bank has all the power, if it thinks a loan is too risky, all it has to do is say "No."
Since the experts would then repackage the loan and sell it off under the guise of a good investment, it didn't matter how sound the loans where, since they wouldn't be on the hook for them. Why this is the home-buyers fault is unclear to me, as it was the banks pulling a bait and switch in both directions.

Debeo Summa Credo: intentionally making bad loans is the stupidest business decision ever, and that lenders who do that go out of business

Let's see... Do the psychopaths in banking care more about the long term health of the institution they work for, or do they care more about the size of their own personal bonus check?

Gee, what a tough thing to figure out.

Let's check in with the banking regulator who was tasked with cleaning up our last large scale banking crisis, the Savings and Loan debacle:

BILL MOYERS: In your book, you make it clear that calculated dishonesty by people in charge is at the heart of most large corporate failures and scandals, including, of course, the S&L, but is that true? Is that what you're saying here, that it was in the boardrooms and the CEO offices where this fraud began?

WILLIAM K. BLACK: Absolutely.

BILL MOYERS: How did they do it? What do you mean?

WILLIAM K. BLACK: Well, the way that you do it is to make really bad loans, because they pay better. Then you grow extremely rapidly, in other words, you're a Ponzi-like scheme. And the third thing you do is we call it leverage. That just means borrowing a lot of money, and the combination creates a situation where you have guaranteed record profits in the early years. That makes you rich, through the bonuses that modern executive compensation has produced. It also makes it inevitable that there's going to be a disaster down the road.

BILL MOYERS: So you're suggesting, saying that CEOs of some of these banks and mortgage firms in order to increase their own personal income, deliberately set out to make bad loans?

WILLIAM K. BLACK: Yes.

BILL MOYERS: How do they get away with it? I mean, what about their own checks and balances in the company? What about their accounting divisions?

WILLIAM K. BLACK: All of those checks and balances report to the CEO, so if the CEO goes bad, all of the checks and balances are easily overcome. And the art form is not simply to defeat those internal controls, but to suborn them, to turn them into your greatest allies. And the bonus programs are exactly how you do that.

Sergeant Grumbles: Debeo Summa Credo: You always forget that intentionally making bad loans is the stupidest business decision ever, and that lenders who do that go out of business get bailouts.

The home-buyers have little to no responsibility for this mess. They were told my "experts", real estate agents, loan officers, and bankers, that they could afford a house through fancy mortgages and appreciation of home value.

So utterly ridiculous. You are suggesting that the majority of the American public (as well as those who bought into bubbles in Ireland, Spain, the UK, Australia, etc) are too stupid to handle their own finances, and only 'experts' are smart enough to determine if they should make large purchases.

Since most did have little knowledge of the process, they trusted the experts under the assumption that the experts wouldn't intentionally make bad loans. The bank has all the power, if it thinks a loan is too risky, all it has to do is say "No."

And when they did think loans were too risky, they did say "No.".

Since the experts would then repackage the loan and sell it off under the guise of a good investment, it didn't matter how sound the loans where, since they wouldn't be on the hook for them.

Well, except that the banks who wrote the loans ended up taking huge losses when the loans unexpectedly went bad. Why did Citigroup need $40b in bailouts? Why did BoA need $25b? Wachovia, National City, and Washingtom Mutual no longer exist due to losses incurred on mortgage debt. Clearly and obviously, if they had sold off all the loans and weren't on the hook for them, they wouldn't have seen their capital or profits hit due to the mortgage crisis. Lehman and Bear Stearns didn't fare too well either. AIG and the financial guarantors, who wrote insurance on CDOs of packaged mortgages, clearly thought that these assets were good - do you hold them responsible or were they likewise decieved by "experts"?

Why is it so hard to recognize that this bubble and ensuing crisis, like all bubbles, resulted from a mass delusion regarding the value of assets. Borrowers, homebuyers, lenders, investors, insurers, fannie and freddie, Alan Greenspan, etc. etc. all believed that the gains in housing value during the bubble were not illusory. Does it make you feel better to find one party, who makes more money than you and does things too complicated for you to understand, and blame them entirely for the crisis?

Rev.K: Debeo Summa Credo: So utterly ridiculous. You are suggesting that the majority of the American public (as well as those who bought into bubbles in Ireland, Spain, the UK, Australia, etc) are too stupid to handle their own finances, and only 'experts' are smart enough to determine if they should make large purchases.

Yes, everyone, everywhere completely understands the ins and outs of mortgages. Every term, every implication, every consequence, everyone understands them all, which is why there's absolutely no need for mortgage and real estate professionals. Why those people exist is a complete mystery.

Most people understand the concept of a mortgage payment and interest. Most people know to look at historic prices trends before making the largest purchase of their lives.

The very few non-mentally challenged people who do not understand these very simple concepts are too stupid to manage their own finances.

Mortgage and real estate professionals are not responsible for forecasting future home prices. Because nobody can do that. They're job is to match up willing buyers and sellers and borrowers and lenders.

Rev.K: Sergeant Grumbles: The home-buyers have little to no responsibility for this mess. They were told my "experts", real estate agents, loan officers, and bankers, that they could afford a house through fancy mortgages and appreciation of home value. Since most did have little knowledge of the process, they trusted the experts under the assumption that the experts wouldn't intentionally make bad loans. The bank has all the power, if it thinks a loan is too risky, all it has to do is say "No."

I just flushed half a trillion dollars down the toilet.

THIS IS ALL THE TOILET'S FAULT!!

I just borrowed money from you to buy an overpriced asset, the asset went down in price, and I can't pay you back.

THIS IS ALL YOUR FAULT!! SURE, YOU'RE OUT THE MONEY YOU LENT ME, BUT I'M THE VICTIM HERE!!

Rev.K: I would doubt that's even what 25% of people do before they buy a house. Why? Because they'd rather get that advice and information from someone within the industry. You know, someone with more knowledge than them.

Which would be the wrong thing to do, since the entire industry operates on commission and bonuses. Realtors aren't bad people, but they're the same as car salesmen. If you want advice and information you're better off hiring a financial consultant or a lawyer for a flat fee.

Then again, I'm the type that tells my realtor what houses to look at and to prequalify myself. I use the realtor to do the paperwork and find out the stuff the other realtor left out of the listing(most common: HOA fee)

Why Yes I Am A Wizard: plcow: Why Yes I Am A Wizard: Debeo Summa Credo: What a farking stupid article. Of course some a-hole professor of Business Ethics is going to blame the crisis on a lack of ethics.


I appreciate your feedback, but the question was who is more culpable.

I would argue the banks because they had no reason (other than pure greed) to do what they did. As for people who got loans they couldn't afford they were attempting to live "The American Dream". Sure they should have been more dilig ...

Yeah, I second that. But it's not just the greed. Everybody is trying to take care of themselves first. The real problem is excessive greed. And what makes it excessive (at least to the extent society cares) is the difference in what level of harm you are comfortable with causing to somebody else to get what you want. That's the apathy part that is the real culprit (and psychopaths exhibit a large amount of). And even then it only becomes a problem when the apathetic person gains alot of power. I could care less about an apathetic hermit in the appalachians.

Policy that addresses the extent of power that apathetic people are able to attain would be much more succesful than targetting greed, which is what India completely failed at. And as long as there are powerful positions, then a certain number of apathetic, ambitious people will get them. Banks were the powerful position this time around. Before that it was oil companies and before that railroads. Next, on the path we are following, it will be the federal government; all throughout history government eventually gets into the picture.

The problem is psychopaths? The cause for such a large and complex issue as the Global Financial Crisis can be boiled down to people who lack empathy?

What is it with people pushing a single, easily identifiable boogeyman to pin the blame? At the rate we're going we'll be blaming Bob, head of security for Goldman Sachs, for causing the crisis by allowing these psychopaths in the front door.