NEW YORK (TheStreet) - So it seems that there was no shooter in the Grassy Knoll.
The Financial Crisis Inquiry Commission, our generation's Warren Commission, today drove a stake through the heart of one of the Big Lies of the 2008 financial calamity. It pretty much reaffirmed what was obvious from the gitgo, which is that the banks, abetted by deregulation, robotic credit rating agencies, panicky government officials and snoozing regulators, caused the financial crisis. The banks and their abettors were to blame, not the speculators who correctly forecast that the bankers were digging their own graves. The FCIC report is an important contribution to the history of the financial crisis, by, among other things, standing up for mark-to-market accounting. "Not valuing assets based on market prices could mean that firms were not recording losses required by the accounting rules and therefore were overstating earnings and capital," says the report. There was no real surprise about this -- or about pretty much anything else in the report, I guess -- but it needs to be said, lest we suffer a repetition of an ancient Urban Legend. No, Ruby did not know Oswald, Area 51 is a myth -- and no, short sellers, including the mythical species of trader known as the "naked short seller," were not responsible for the collapse of Bear Stearns and Lehman Brothers. You really have to hunt through the report to find that what the commission had to say about short-selling. It's not mentioned in the panel's conclusions. It's not dealt with in the dissents. It's on pages 326 and 327: "(Lehman CEO Dick) Fuld would later describe Lehman's main problem as one of market confidence, and he suggested that the company's image was damaged by investors taking 'naked short' positions (short selling Lehman's securities without first borrowing them), hoping Lehman would fail, and potentially even helping it fail by eroding confidence. 'Bear went down on rumors and a liquidity crisis of confidence,' Fuld told the FCIC. 'Immediately thereafter, the rumors and the naked short sellers came after us.' The company pressed the SEC to clamp down on the naked short selling." Which they did, in panicky fashion. 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