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Wall Street Sold ‘Tragically Deficient’ Product, Angelides Says

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Phil Angelides, Financial Crisis Inquiry Commission
Phil Angelides, chairman of the Financial Crisis Inquiry Commission. Photographer: Andrew Harrer/Bloomberg

Oct. 25 (Bloomberg) -- Wall Street firms such as Goldman Sachs Group Inc. and Citigroup Inc. created products that were “tragically deficient,” in the view of the chairman of the panel charged by Congress with identifying the causes of the financial crisis.

“The notion that Wall Street was non-culpable is just ridiculous,” Phil Angelides, the chairman of the Financial Crisis Inquiry Commission, said in an interview aired yesterday on C-SPAN’s “Newsmakers” show. “Either people knew and didn’t care, or they didn’t know and they didn’t care to know.”

He cited Goldman Sachs, Citigroup and Merrill Lynch as parts of a “Wall Street mortgage-security machine” that, he said, never slowed even after the housing market peaked in 2005 or 2006.

“They in fact were creating products that they were selling into the marketplace,” Angelides said. “They clearly turned out to be tragically deficient products.”

Legislative leaders of both parties appointed the 10-member commission in 2009 to investigate the causes of the worst financial crisis since the Great Depression. The panel has until December to report its findings to Congress.

Angelides, the former treasurer of California and a Democrat, estimated the commission and its staff have interviewed 600 to 700 people.

“We’re now putting together the findings of our investigation, we’re working furiously, we’re deliberating as commissioners and we hope to have a report delivered to the American people that helps explain how this calamity came to be,” Angelides said.

To contact the reporter on this story: Phil Mattingly in Washington at pmattingly@bloomberg.net.

To contact the editor responsible for this story: Mark Silva at msilva@bloomberg.net

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