Follow this link to the story by William K. Black, Assoc. Professor, Univ. of Missouri, Kansas City; Sr. regulator during S&L debacle. He tells how the FBI warned of an “epidemic” of mortgage fraud back in September 2004. He goes on to show that the ratings agencies like Standard and Poors were complicit in keeping the fraud hidden.  Banks that packaged these mortgages and sold them as investments did not do even a minimal amount of due diligence.  Neither the banks nor the rating agencies  even requested the documentation that would have been needed to gauge the risk of the investment.

The FBI correctly identified the epidemic of mortgage control fraud at such an early point that the financial crisis could have been averted had the Bush administration acted with even minimal competence.

As a novice investor, I can only say, “Live and Learn.”

Competence in the executive branch does matter.  I believe that the Obama administration has the competence, but only time will tell if I am right.  Let us hope that the voters never forget that it is nice to have a beer with a friend, but as President you want someone who is competent.