fi-cri fallout

The Phil Angelides Comedy Hour

You know what they say about comedy. It’s just tragedy plus time. With the tragedy that was the collapse of the housing market a safe three years behind us, today’s Financial Crisis Inquiry Commission hearings, which targeted the ratings agencies who slapped AAA ratings on securities that were later found to be worthless, was practically a barrel of laughs! Perhaps knowing that he would be sparring with the financial world’s king of the sound bites, Moody’s stakeholder Warren Buffett, Committee Chairman and former California state treasurer Phil Angelides brought his “A” game to the proceedings. Here are some of his best zingers.

• “Even the dumbest kid in the class gets 10 percent on their exams.” —To Moody’s chief executive Raymond McDaniel, citing the company’s 90 percent downgrade of its housing-market-linked ratings.

• “Flipping a coin would have been five times better,” than Moody’s ratings of mortgage-backed securities in the run-up to the financial crisis.

• “There is a country song by Don McLean,” Angelides says, thoughtfully rustling through his important serious-person papers, “Where he says,’When the gates are all down and the signals are flashing and the whistles are screaming in vain, and you stay on the tracks, avoiding the facts, you can’t blame the wreck on the train.’” — To Buffett, on the “many red and yellow” flags that indicated the housing market was overheated. [The awesome Aaron Lucchetti points out to us that this song is from the 1987 album Love Tracks, and reached #49 on the charts.]

• “Did you ever see I Love Lucy? That famous episode where she’s working in a chocolate factory and the conveyor belt just goes faster and faster? Did you ever feel like Lucy?” —To former Moody’s managing director turned whistleblower Eric Kolchinsky, who ran a unit that rated subprime collateralized-debt obligations. (Kolchinsky’s answer: “Oh yes, all the time.”)

Buffett: “Rising prices were a narcotic.”
Angelides:: “You don’t want your police trading in crack.”

• “If ifs and buts were candy and nuts, we’d all have a Merry Christmas.” —Okay, that wasn’t Angelides, it was Vice-Chairman Bill Thomas, but it was still awesome.

Financial Crisis Inquiry Commission (Transcript) [C-SPAN]

The Phil Angelides Comedy Hour