Older Books that American-Buddha.com put On-line
CAST OF CHARACTERS
THE MORTGAGE MEN
Roland Arnall Founder of ACC Capital Holdings, the parent company of Ameriquest.
A subprime lending pioneer who became a billionaire. His first company, Long
Beach Mortgage, spawned more than a dozen other subprime companies.
Aseem Mital Ameriquest veteran who became CEO in 2005.
Ed Parker Mortgage veteran hired in 2003 to investigate lending fraud in Ameriquest’s branches.
Deval Patrick Assistant attorney general who led the government’s charge against
Long Beach in 1996, only to join Ameriquest’s board in 2004.
Stanford Kurland President and COO. Long seen as Mozilo’s successor, he left the
company in 2006.
David Loeb Co-founder, president, and chairman. Stepped down in 2000.
John McMurray Countrywide’s chief risk officer.
Angelo Mozilo Co-founder and CEO until 2008. Dreamed of spreading homeownership
to the masses. Became a billionaire in the process, but couldn’t resist pressure
to enter the subprime mortgage business.
David Sambol The head of Countrywide’s sales force. Aggressively pushed
Countrywide to keep up with subprime lenders.
Eric Sieracki Longtime Countrywide employee who was named CFO in 2005.
Primary Residential 13/1148
Dave Zitting Old-school mortgage banker who steered clear of subprime lending.
Bill Dallas Founder of Ownit, a subprime company in which Merrill Lynch held a
20 percent stake.
THE FINANCIAL INSTITUTIONS
American International Group (AIG)
Steve Bensinger CFO under Martin Sullivan from 2005 to 2008.
Joe Cassano CEO of AIG Financial Products from 2001 to 2008.
Andrew Forster One of Cassano’s chief deputies in London.
Al Frost AIG-FP marketer at the center of the multisector CDO deals that put AIG
on 14/1148 the hook for $60 billion of subprime exposure.
Maurice R. “Hank” Greenberg AIG’s CEO from 1968 to 2005. Forced to resign by
Eliot Spitzer. Gene Park AIG-FP executive who noticed the early warning signs on
Tom Savage CEO of AIG-FP from 1994 to 2001. Howard Sosin Founder of AIG-FP. Ran
it from 1987 to 1993.
Martin Sullivan Succeeded Greenberg in 2005. Forced out by the board in 2008.
Robert Willumstad Sullivan’s successor as CEO until the financial crisis hit
four months later.
Ralph Cioffi Bear Stearns hedge fund manager. His two funds—originally worth $20
billion—went bankrupt in the summer of 2007 because of their subprime exposure.
Matthew Tannin Cioffi’s partner. Cioffi and Tannin were tried for fraud and
found not guilty.
Steve Van Solkema Analyst who worked for Cioffi and Tannin.
Jim Johnson CEO from 1991 to 1998. Perfected Fannie’s take-no-prisoners approach
to regulators and critics.
Daniel Mudd CEO from 2005 to 2008.
Franklin Raines CEO from 1999 to 2004. Forced to step down over an accounting
Josh Birnbaum Star trader who specialized in the ABX index.
Lloyd Blankfein Current CEO.
Craig Broderick Current chief risk officer.
Gary Cohn Current president and COO. 16/1148
Jon Corzine Senior partner who convinced the partnership to go public. Replaced
by Hank Paulson within days of the IPO.
Steve Friedman Co-head of Goldman Sachs with Robert Rubin.
Dan Sparks Head of the Goldman mortgage desk from 2006 to 2008.
Michael Swenson Co-head of the structured products group under Sparks.
John Thain Co-COO under Paulson until 2003.
Fabrice Tourre Mortgage trader under Sparks. Later named as a defendant in the
SEC’s suit against the company.
David Viniar CFO.
Mark Brickell Lobbyist who fought derivatives regulation on behalf of J.P.
Morgan and the International Swaps and Derivatives Association. President of
ISDA from 1988 to 1992. 17/1148
Till Guldimann Executive who led the development of Value at Risk modeling and
shared VaR with other banks.
Blythe Masters Derivatives saleswoman who put together J.P. Morgan’s first
credit default swap in 1994.
Sir Dennis Weatherstone Chairman and CEO from 1990 to 1994.
Michael Blum Executive charged with purchasing a mortgage company, First
Franklin, in 2006. Served on Ownit’s board.
John Breit Longtime Merrill Lynch risk manager who specialized in evaluating
derivatives risk. Ahmass Fakahany Co-president and COO under CEO Stanley O’Neal.
Greg Fleming Co-president—with Fakahany— until O’Neal’s resignation in 2007.
Dow Kim Head of trading and investment banking until 2007. 18/1148
David Komansky O’Neal’s predecessor as CEO.
Jeffrey Kronthal Oversaw Merrill’s mortgage trading desk under Kim. Fired in
Dale Lattanzio Chris Ricciardi’s successor as the leader of Merrill Lynch’s CDO
Stan O’Neal CEO from 2002 to 2007. Created the culture that allowed the buildup
of Merrill Lynch’s massive exposure to securities backed by subprime mortgages.
Tom Patrick CFO under Komansky and executive vice chairman under O’Neal. Seen as
O’Neal’s ally until O’Neal fired him in 2003.
Chris Ricciardi Head of Merrill’s CDO team from 2003 to 2006. While at
Prudential Securities in the mid-1990s, worked on one of the first
Osman Semerci Installed as global head of fixed income, reporting to Kim, in
2006. Fired in 2007. 19/1148
Arshad Zakaria Head of global markets and investment banking. Considered a close
ally of O’Neal until forced out in August 2003.
Mark Adelson Longtime Moody’s analyst and co-head of the asset-backed securities
group whose skepticism was at odds with Brian Clarkson’s vision for the agency.
Quit in 2000.
Brian Clarkson Co-head of the asset-backed securities group who aggressively
pursued market share. Named president in 2007.
Eric Kolchinsky Managing director in charge of rating asset-backed CDOs. Oversaw
the rating process for John Paulson’s Abacus deal.
Raymond McDaniel CEO.
THE PIONEERS 20/1148
Larry Fink Devised the idea of “tranching” mortgage-backed securities to parcel
out risk. Underwrote some of the first mortgagebacked securities for First
Boston in the 1980s. Later founded BlackRock and served as a key government
adviser during the financial crisis.
David Maxwell Fannie Mae’s CEO from 1981 to 1991. Important player in the early
days of mortgage securitization.
Lew Ranieri Salomon Brothers bond trader who helped invent the mortgage-backed
security in the 1980s.
Prentiss Cox Head of the consumer enforcement division in the Minnesota attorney
general’s office from 2001 to 2005. 21/1148
Tom Miller Iowa attorney general who fought predatory lending.
Eliot Spitzer New York State attorney general from 1999 to 2006.
Commodity Futures TradingCommission
Brooksley Born Chair of the CFTC from 1996 to 1999. Attempted to increase
oversight of derivatives dealers.
Wendy Gramm Chair of the CFTC from 1988 to 1993.
Michael Greenberger Director of the CFTC’s division of trading and markets under
United States Congress
Richard Baker Louisiana congressman who introduced a bill to reform Fannie Mae
Freddie Mac in 1999. James Bothwell Author of two key General Accounting Office
reports, one criticizing 22/1148
Fannie and Freddie and the other calling for regulation of derivatives.
Charles Bowsher Head of the GAO from 1981 to 1996. Bothwell’s ally.
Phil Gramm Chairman of the Senate banking committee from 1989 to 2003. Opposed
regulation of derivatives. The “Gramm” in Gramm-Leach-Bliley, the law that
abolished the Glass-Steagall Act.
Jim Leach Chair of the House banking committee from 1995 to 2001. Criticized
Fannie and Freddie. The “Leach” in Gramm-Leach- Bliley.
Department of Housing and Urban Development
Andrew Cuomo HUD secretary from 1997 to 2001. Crossed swords with Jim Johnson.
Increased Fannie and Freddie’s affordable housing goals.
Armando Falcon Jr. Director of the Office of Federal Housing Enterprise
Oversight from 23/1148 1999 to 2005. Outspoken critic of Fannie and Freddie, the
two institutions his office was charged with regulating.
Jim Lockhart Director of OFHEO from 2006 to 2008.
Department of the Treasury
John Dugan Comptroller of the currency starting in 2004.
Gary Gensler Former Goldman executive who became assistant Treasury secretary
under Robert Rubin. Testified in favor of Baker’s bill. Current chairman of the
U.S. Commodity Futures Trading Commission.
James Gilleran Director of the Office of Thrift Supervision from 2001 to 2005.
John “Jerry” Hawke Comptroller of the currency from 1998 to 2004.
Henry “Hank” Paulson Jr. Treasury secretary from 2006 to 2009. Previously
chairman and CEO of Goldman Sachs. 24/1148
John Reich Director of the OTS from 2005 to 2009.
Robert Rubin Treasury secretary from 1995 to 1999. Previously co-chairman of
Bob Steel Undersecretary for domestic finance in 2006. Former Goldman vice
chairman brought to Treasury by Paulson.
Larry Summers Treasury secretary from 1999 to 2001. Rubin’s deputy before that.
Along with Rubin and Alan Greenspan, the third member of “the Committee to Save
Federal Deposit Insurance Corporation
Sheila Bair Current chair of the FDIC. Assistant Treasury secretary for
financial institutions from 2001 to 2002.
Donna Tanoue Chair of the FDIC from 1998 to 2001. 25/1148
Ben Bernanke Chairman of the Federal Reserve starting in 2006. Timothy Geithner
President of the New York Federal Reserve from 2003 to 2009.
Edward “Ned” Gramlich Federal Reserve governor from 1997 to 2005. Longtime head
of the Fed’s committee on consumer and community affairs under Alan Greenspan.
Alan Greenspan Chairman of the Federal Reserve from 1987 to 2006.
Securities and Exchange Commission
Christopher Cox Chairman from 2005 to 2009.
Arthur Levitt Chairman from 1993 to 2001.
THE SKEPTICS 26/1148
Michael Burry California hedge fund manager who began shorting mortgage-backed
securities in 2005.
Robert Gnaizda Former general counsel of the public policy group Greenlining
Institute who called for scrutiny of unregulated lenders.
Greg Lippman Deutsche Bank mortgage trader. One of the few Wall Street traders
to turn against subprime mortgages early on.
John Paulson Hedge fund manager who made $4 billion buying credit default swaps
on subprime mortgage-backed securities.
Andrew Redleaf Head of the Minneapolisbased hedge fund Whitebox Advisors. Used
credit default swaps to short the subprime mortgage market in 2006.
Josh Rosner Former Wall Street analyst who grew skeptical of the housing boom.
Published a research paper entitled “A Home without Equity Is Just a Rental with
Debt” in 2001. 27/1148
ABCP: Asset-backed commercial paper. Very short-term loans, allowing firms to
conduct their daily business, backed by mortgages or other assets. Part of the
“plumbing” of Wall Street.
ABS: Asset-backed securities. Bonds comprising thousands of loans—which could
include credit card debt, student loans, auto loans, and mortgages—bundled
together into a security.
AIG: American International Group.
ARM: Adjustable-rate mortgage.
CDOs: Collateralized debt obligations. Securities that comprise the debt of
different companies or tranches of asset-backed securities.
CDOs Squared: Collateralized debt obligations squared. Securities backed by tranches of other CDOs.
CFTC: Commodities Futures Trading Commission. Government agency that regulates
the futures industry.
CSE: Consolidated supervised entities. An effort by the Securities and Exchange
Commission in 2004 to create a voluntary supervisory regime to regulate the big
investment bank holding companies.
FCIC: Financial Crisis Inquiry Commission. Commission charged by Congress with
investigating the causes of the financial crisis.
FDIC: Federal Deposit Insurance Corporation. Government agency that insures bank
deposits and takes over failing banks. Also plays a supervisory role over the
FHA: Federal Housing Administration. 29/1148
GAO: General Accounting Office. Government agency that conducts investigations
at the request of members of Congress.
GSEs: Government-sponsored enterprises. Washington-speak for Fannie Mae and
HOEPA: The Homeownership and Equity Protection Act. A 1994 law giving the
Federal Reserve the authority to prohibit abusive lending practices.
HUD: Department of Housing and Urban Development. Sets “affordable housing
goals” for Fannie Mae and Freddie Mac.
LTCM: Long-Term Capital Management. Large hedge fund that collapsed in 1998.
MBS: Mortgage-backed securities.
NRSROs: Nationally Recognized Statistical Ratings Organizations. The three major
credit rating agencies, Moody’s, Standard & Poor’s, and Fitch, were granted this
status by the government.
OCC: Office of the Comptroller of the Currency. The primary national bank
OFHEO: Office of Federal Housing Enterprise Oversight. Fannie Mae’s and Freddie
Mac’s regulator from 1992 to 2008.
OTS: Office of Thrift Supervision. Regulated the S&L industry, as well as
certain other financial institutions, including AIG.
PWG: President’s Working Group on Financial Markets. Consists of the secretary
of the Treasury and the chairmen of the Securities and Exchange Commission, the
Federal Reserve, and the Commodities Futures Trading Commission.
REMIC: Real Estate Mortgage Investment Conduit. The second of two laws passed in
the 1980s to aid the new mortgage-backed securities market by enabling such
securities to be.