Penny For Your Thoughts?

Former Countrywide Financial President Stanford Kurland has teamed up with Laurence Fink of Blackrock to start a new venture aimed at profiting from purchasing distressed mortgage back securities, sprucing them up and flipping them for a profit. PennyMac will raise $2 billion. Although Fink has a good reputation in the asset management industry (despite his unfortunate name), I have to question why he is teaming up with the fools from Countrywide. The Wall Street Journal article states that the Countrywide executives who will join the newly created firm were involved in risk management which, they claim, had nothing to do with Countrywide's current problems. REALLY??? Do these clowns actually think they did a good job managing the risk of CFC's portfolio? Did they think that furiously granting interest only loans first loans and then also providing the piggyback second loan to borrowers with no assets and stated incomes on inflated appraisals was a low risk strategy? If anything, I blame CFC's ultimate demise on the risk managers! Why? Because these spineless twerps should have stood up to everyone in management that was trying to gain market share and said "No! We will not do these loans! We cannot! It will ultimately destroy the company!" Other banks did draw the line, which is why CFC has the most ridiculous portfolio of REO assets in America. What do these guys know about valuing securities? I would argue nothing. What's going to happen? They're going to get their money, lever it up at 10x capital and wait for the next Fed bailout. Moral Hazard? What moral hazard?