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Who made this global financial mess?

As the global financial turmoil shifts from full-blown panic to widespread anxiety, a lot of readers are also getting angry. And they're taking names: “Who’s responsible for this mess?”
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As the global financial turmoil shifts from full-blown panic to widespread anxiety, a lot of readers are getting angry. And they're taking names. In hundreds of e-mails they asked: “Who’s responsible for this mess?” We’ve rounded up some suspects of our own. Readers offered their own opinions. Here’s just a sampling.

It seems that some of this mess is here because the rocket scientists, in addition to creating these arcane instruments, found ways to skirt the existing regulatory framework.  What's needed is a single regulatory body for all financial institutions.  Only in this way can the overall regulatory czar be sure that insurance regulators, bank regulators and others compare notes on what they find. 
— Tom S., Address withheld

That is one of the ideas getting serious consideration in Washington — and around the world. A complex, global financial system requires a global regulatory approach. But sorting out the details will take months — if not years.

In the meantime, the man tapped as the first “czar” of the Treasury’s $700 billion is, in fact, a former rocket scientist. Here’s his bio (see last line).

(Regarding those) complex financial derivatives which nobody understands and which exist in reality only as computer models. If you were to design a new product such as an airliner, a drug, a genetically modified plant, factory process control software, or any number of critical products, wouldn't you have a legal and moral obligation to thoroughly test them to verify that they work as intended? These people have harmed our nation as (badly as) or worse than any deliberate terrorist act because they bypassed any reasonable standard of product verification. Don't they have significant legal risk for criminal negligence?
G.A., Denver, Colo.

There is an ongoing investigation by the FBI into 24 companies (at least) looking into mortgage and securities fraud. As of June, there were hundreds of agents on the case.

So stay tuned.

Why could stockholders not file class-action lawsuits against the company executives for not exercising their fiduciary responsibility?  No fraud need be shown, and, in effect, you will find them guilty of stupidity.
John P., Kentucky

I don’t think you need to go to court to get that stupidity verdict. In the meantime, there are a number of civil suits under way at all levels of the mess, and there will almost certainly be more.

Some of these cases will be easier to make than others. The problem with “breach of fiduciary duty” is that can be tough to prove. If a CEO simply blunders badly, or a stock broker gives advice “in good faith” that turns out to be wrong, that’s not fraud.

For that, you’ve got have get photos of them stuffing wads of shareholder cash into duffel bags after hours. Some CEO pay packages may fall into that category.

Hey let's cut this media crap. You are part of the problem in causing this market panic. Stop the media blitz and start reporting the positive, because I'm moving on from this mess regardless on the outcome. The only thing Wall Street is doing is creating the fear so people will dump their stocks at a loss and then sweep it up!
Jeff S., Address withheld

How about we start a Weather Channel that only reports that it’s sunny all the time?

To be sure, the press played a role, in our opinion. For too long, the problems in the mortgage market were attributed to a handful of credit-impaired "subprime" borrowers. It's now clear the entire system of home mortgage finance began to fall apart as early as 2005.

But we don't believe in reporting only good news and cheerleading the markets. That's not our job.

There is more at stake here than just a credit problem. If you dig deep enough you will find that the same players who created the Federal Reserve are also the same people who are buying up financial institutions in trouble. … The more I read about this situation it clearly indicates that this approach is not about money — it is about sheer power and control. Any chance you can dig in to this story???  There is a story here — yet it seems the media is afraid to cover it.
— John C., Phoenix, Ariz.

You can find dozens of “documentaries” that “expose the truth” on YouTube about the “shadowy origins” of the Federal Reserve and the ongoing conspiracy to control our lives by an unelected body that has unchecked powers.

Having researched this carefully, I’ve come to an important conclusion: You should ignore anything that originates on YouTube and claims to “expose” anything. Stick with clips of skateboarding dogs and Steven Colbert Greenscreen Challenges.

The problem with these YouTube docs is that they contain just enough truth to sound credible. But they share a common theme: There has been an evil conspiracy on the part of (cue ominous music and insert Black Hat of your choice here) that has duped the Common Man to serve the greedy self-interests of the Shadowy Overlords behind (pick your favorite public or private institution.)

The Fed is illegal. The WTO is secretly in charge of the global economy. Wall Street is controlled by a cabal of 10 white men who play poker once a month and decide how to screw the rest of us.

Many of these videos explaining the financial crisis like to ask the question: “Is it really credible that all this is an accident?” Well, yes, in fact, it is. Financial markets are by their nature chaotic and unpredictable because they represent the collective fear and greed of everyone — including the authors of these “documentaries.”

These folks frequently support their claims by pointing to “media silence” on these conspiracies. “Mainstream Media knows full well what’s going on but has been bought off or silenced by "Those in Power.”

I’ve got hundreds of these in my Inbox. My personal opinion is that this dangerous nonsense helps people overcome a feeling of powerlessness (“They did this to me”) and only makes it more difficult to develop realistic and rational solutions to the very real problems these “documentaries” conveniently overlook.

Are you unaware that "flooding it (the economy) with cash" causes inflation? In fact it is a fire hose compared to the lending window's squirt gun. Forget the discount rate. The real news is the billions in 'created' dollars the Fed is throwing at the financial markets. This will cause unprecedented inflation. Are you duped and don't realize this, or are you part of the con?
— Ben H., Atlanta

Duped. I’m one of those members of the Mainstream Media that’s been reprogrammed by the Shadowy Overlords.

You're free to check my math on this, but I calculated that if you strung $700 billion worth of $100 dollar bills end-to-end, they would go from the center of our earth to the center of the moon a total of 2.78 times, or the equivalent of 662,879 miles.  Enough said.
Bob S., Woodbury, Conn.

But if you lined up all of the world’s economists end to end, they’d never reach a consensus.

I see reports the market lost $8.4 trillion from one year ago. Is this calculation based on actual transactions or based upon a market-cap type of calculation?
— John P., Address withheld

I’ve seen numbers as high as $25 trillion. It’s tough number to nail down. For one thing, it depends on what you mean by “market” Do you include just stocks? Or bonds, too? What about real estate? And how do you value the loss on the many trillions of dollars in mortgage backed securities at the heart of the problem — because no one can tell what they’re worth?

Are there any readers out there with ideas on how to help tally the final tab for all this?