[Superpredator]

I was on an extended weekend camping trip and came back to the recent news. I have a friend who works for Merrill...

 

[itsborken]

hmm S&L, Junk Bonds, Enron, mortgage meltdown. Does anyone really think new laws and regulations are going to make this better the next time history repeats itself?

Maybe the govt should just enforce the laws on the books.

 

[DrBenway]

Quote:

Originally Posted by itsborken /img/forum/go_quote.gif Maybe the govt should just enforce the laws on the books.

That would be a mighty good start. But it's also true that the repeal of the Glass-Steagall Act has led to much of the howlingly dangerous and unethical behaviour that has gotten us to where we are. This happened during the Clinton administration, with the passage of the Gramm-Leach-Bliley Act.

What do you expect when you let the fox into the barnyard, on the condition that the fox promises not to harm the chickens?

 

[Happy Camper]

This will sound irresponsible but Ha Ha Ha. The system has pushed many into insolvency and then cry when it happens to them. Let the system shake out. Business/govt. can't keep our society prisoner forever. Eventually the hired hands will have to decide on continuing to do business bidding or save their political lives. Society has to take govt. away from business.

 

[itsborken]

Quote:

Originally Posted by DrBenway /img/forum/go_quote.gif That would be a mighty good start. But it's also true that the repeal of the Glass-Steagall Act has led to much of the howlingly dangerous and unethical behaviour that has gotten us to where we are. This happened during the Clinton administration, with the passage of the Gramm-Leach-Bliley Act. What do you expect when you let the fox into the barnyard, on the condition that the fox promises not to harm the chickens?

SOX was pushed to protect the shareholders and their investments after that deregulation. For all the effort that was put into these regulations/audits it didn't do a danged bit of good preventing any of this corporate malfeasance.

 

[vcoheda]

AIG got downgraded last night.

could be the end for them if they don't get significant assistance. if AIG goes, the effect on the economy and financial system could be ... i'm not sure, but very bad.

 

[DrBenway]

Quote:

Originally Posted by vcoheda /img/forum/go_quote.gif AIG got downgraded last night. could be the end for them if they don't get significant assistance. if AIG goes, the effect on the economy and financial system could be ... i'm not sure, but very bad.

As I'm sure you've heard, Patterson has given them one day to close the gap between what they've been able to raise and what they need. Otherwise, lights out. I don't know if he was predicting that, or saying that he would (or could) take action to make it so. In any case, this should be very interesting. Sort of like watching a massive car accident in slow motion.


Quote:

Originally Posted by itsborken /img/forum/go_quote.gif SOX was pushed to protect the shareholders and their investments after that deregulation. For all the effort that was put into these regulations/audits it didn't do a danged bit of good preventing any of this corporate malfeasance.

I worked in the IT dept at a very large health insurance provider during the runup to mandatory compliance with SOX. What a disaster. Half of our meetings involved trying to figure out what the hell we were supposed to do, and how we were ever going to get it done in time.

But I think the legislation that the Clinton administration deep-sixed had proved its effectiveness. That law was originally passed in the aftermath of the crash of '29, and nothing of the sort happened again while it was still on the books.

 

[F107plus5]

Good Lord, Good Lord; I just read Sen. Phil Gramms history! Oh my, oh my. Talk about the Fox running wild in the Henhouse!

....and John McCain considers him his trusted(officially; unofficial) financial adviser and may nominate him as his Treasury Secretary!

Oh my, oh my.

 

[VicAjax]

Quote:

Originally Posted by vcoheda /img/forum/go_quote.gif sad day for lehman and merrill.

I have a hard time feeling sorry for Merrill. their grubby fingerprints were all over the Enron and Worldcom messes, and they pretty much got off scot free.

 

[itsborken]

good point

 

[milagu]

Everyone better keep stashing them pennies...

 

[DrBenway]

Quote:

Originally Posted by F107plus5 /img/forum/go_quote.gif Good Lord, Good Lord; I just read Sen. Phil Gramms history! Oh my, oh my. Talk about the Fox running wild in the Henhouse! ....and John McCain considers him his trusted(officially; unofficial) financial adviser and may nominate him as his Treasury Secretary! Oh my, oh my.

I think it is safe to say that most Americans, from the reasonable right to the reasonable left, are good and decent people. We may heartily disagree about some issues, but we agree more than we differ. The politicians we elect?

NOT SO MUCH.

Why is that? I'm a life-long member of one party, with life-long heros from the other party. I know other Americans, from the other party, who would say the same thing. So why do we keep electing idiots from both parties?

Our system is broken. We all -- all of us -- need to roll up our sleeves, take a deep breath, and fix this.

 

[itsborken]

Quote:

Originally Posted by DrBenway /img/forum/go_quote.gif I worked in the IT dept at a very large health insurance provider during the runup to mandatory compliance with SOX.

Being in the same line of work I can tell you it never stopped, it just gets worse. I can't for the life of me remember where an compromised system ruined the economy.

 

[AlanY]

It is probably best to keep politics out of this thread, otherwise it will get closed. For those looking to assign responsibility for the repeal of Glass-Steagal, this page has all the facts on who voted for it (obviously it wasn't vetoed, so there is blame at that level as well):
GovTrack: Senate Vote On Passage: S. 900 [106th]: Gramm-Leach-Bliley Act

This crisis would likely have happened even with Glass-Steagal though... it certainly didn't prevent either the Savings & Loan crisis or LTCM, and the current crisis is a mixture of ideas from both. But it also transcends banking and crosses over to the role of the Federal Reserve and its behavior.

 

[DrBenway]

Quote:

Originally Posted by itsborken /img/forum/go_quote.gif Being in the same line of work I can tell you it never stopped, it just gets worse. I can't for the life of me remember where an compromised system ruined the economy.

It's been three years since I had to deal with that mess, and I send you my sympathy, because I HATED it. Just trying to figure out what we were supposed to do (and realizing what the consequences would be if we didn't get it right) made us shake in our shoes.

I am not anti-regualation. I think regulation is a good thing in many cases. But poorly conceived, disastrously constructed legislation justs makes the problem worse. To quote Bruce Springsteen: "Walk tall, or just don't walk at all."