Think this is the best article I have read that explains it, hard to figure what happened when most of the people on tv and print don't have a clue .....http://www.rollingstone.com/politics/story/26793903/the_big_takeover/1
what happened @ aig ?
- Thread starter bryanz
- Start date
There is no doubt in my mind Cox should go to jail for failing all of us. And Paulson should go live in Europe.
Great article.
Great line!
The best way to understand the financial crisis is to understand the meltdown at AIG. AIG is what happens when short, bald managers of otherwise boring financial bureaucracies start seeing Brad Pitt in the mirror.
Great line!
The best way to understand the financial crisis is to understand the meltdown at AIG. AIG is what happens when short, bald managers of otherwise boring financial bureaucracies start seeing Brad Pitt in the mirror.
The thing that gets me about the players, they are no different from the guys that I knew that palyed for hundredths of a penny to these guys dollars .....But with the same greed and self flatulence... Caught up in the action for the big spot light, big bonuses with no reguard for reality... I know how it happens... It happens to the best of the well intentioned... I witnessed it... Again, not even close to this level but it's the same thing... Greed is is greed ! We want to think that people with so much on the line not only for them but literally the world would act in a differnet manner but, in the end we are all made up of the same stuff. This is a lesson for the common guy.. Just because they may be doctors or financial types or anyone trying to sell/tell you somthing.... If you don't understand it, don't make a move until you do or at least make a move with someone you trust as a last resort.... Do your homework.....Let them know you are doing so... NO matter what it is ... They are one of 3, 5, 7, 10, I'm talking to..... For the People that talk about to much, government regulation..... What is gov reg ? No blank checks for people that we shouldn't trust. Why should we trust people that we don't know ? Anyone that rails against regulation is either a saint, a fool or thinks the rest of us are.... What are they afraid of, if nothing to hide ? Trust But Verify ! Do you think you can trust the average corporation with your food and water ? Do you trust your government with your food or water ? I'm breaking this down to the lowest common denominator.... I'm here to tell you , if you value your health... Take a look around at what Americans looks like, that eat what government and average corporations provide as food.... All I'm saying is look at the product/ The American people .... This finanical crisis is a symptom of the shell game that if being played on all of us in so many areas .....
So: Bankers are corrupt bald-headed guys who made all kinds of irrational decisions 'cause of greed--result was buncha dumb loans.
Regulators, on the other hand, are rational folks, not caught up in "any action" or greed (even for thier careers?) and can clearly see the problems, and can stop these bankers from hurting themselves and losing billions.
that argument is beyond laughable, actually pitiful.
How did regulators and watchdogs work in the real world?
You had editorial writers criticising president's and congress actions on everything, but the impending crisis (very few exceptions)
Presidents doing almost nothing about it
Federal Reserve shrinking money supply (the main cause of this crisis) and not watching over markets
Congress, supposed to watch Fed and president, and regulatory agencies--doing almost nothing
perfessers of economics and finance totally missing the boat (as is typical and expected)
All of the above folks egging on banks to make more loans to fund the American Dream of Home Ownership.
and Nouriel Roubini was right all along. Appointing him dictator would have been the only solution (and tho he right about this, he was wrong on other predictions)
So: There is abolutely zero evidence from this crisis that more power to regulators and more regulatory rules would have helped even the least bit.
Zero
Regulators, on the other hand, are rational folks, not caught up in "any action" or greed (even for thier careers?) and can clearly see the problems, and can stop these bankers from hurting themselves and losing billions.
that argument is beyond laughable, actually pitiful.
How did regulators and watchdogs work in the real world?
You had editorial writers criticising president's and congress actions on everything, but the impending crisis (very few exceptions)
Presidents doing almost nothing about it
Federal Reserve shrinking money supply (the main cause of this crisis) and not watching over markets
Congress, supposed to watch Fed and president, and regulatory agencies--doing almost nothing
perfessers of economics and finance totally missing the boat (as is typical and expected)
All of the above folks egging on banks to make more loans to fund the American Dream of Home Ownership.
and Nouriel Roubini was right all along. Appointing him dictator would have been the only solution (and tho he right about this, he was wrong on other predictions)
So: There is abolutely zero evidence from this crisis that more power to regulators and more regulatory rules would have helped even the least bit.
Zero
don't get me wrong. We need the regulators and watchdogs. We need a new set of rules and regulations to avoid banking and financial problems like this in the future.
That will happen, as it always does. And, as always, the next crisis will be one precious few folks anticipate and, as always, our shiny new regulations from last crisis won't help much.
History.:sadwave:
That will happen, as it always does. And, as always, the next crisis will be one precious few folks anticipate and, as always, our shiny new regulations from last crisis won't help much.
History.:sadwave:
I'm not the smartest guy around but I don't think the writers main goal of this article was to paint banker & regulators the way you think he did. There is a lot more to this than that... Your comments make me think you didn't read the article or most of it...So: Bankers are corrupt bald-headed guys who made all kinds of irrational decisions 'cause of greed--result was buncha dumb loans.
Regulators, on the other hand, are rational folks, not caught up in "any action" or greed (even for thier careers?) and can clearly see the problems, and can stop these bankers from hurting themselves and losing billions.
that argument is beyond laughable, actually pitiful.
How did regulators and watchdogs work in the real world?
You had editorial writers criticising president's and congress actions on everything, but the impending crisis (very few exceptions)
Presidents doing almost nothing about it
Federal Reserve shrinking money supply (the main cause of this crisis) and not watching over markets
Congress, supposed to watch Fed and president, and regulatory agencies--doing almost nothing
perfessers of economics and finance totally missing the boat (as is typical and expected)
All of the above folks egging on banks to make more loans to fund the American Dream of Home Ownership.
and Nouriel Roubini was right all along. Appointing him dictator would have been the only solution (and tho he right about this, he was wrong on other predictions)
So: There is abolutely zero evidence from this crisis that more power to regulators and more regulatory rules would have helped even the least bit.
Zero
You dunno. You might be the smartest guy around here, but your situation could be somewhat akin to that line by your sainted WFB: "being called the smartest man in Washington was like saying 'that's the tallest building in Topeka.' "
I read the Rolling Stone piece a day before you started this thread, after I noticed Ritholtz mentioning it at his blog. Where in, incidentally, he included some links to other articles discussing the same topics in sharper terms, but with less chest-thumping.
The comments I made in my post on regulatory policy implications were a mere 9 short sentences in this thread after your rant on regulation in your post, and I also incorporated a quote from the succeeding poster's comments--all this should make it obvious, except to the oblivious, that I was responding to these posts, not responding directly about the Rolling Stone article.
Your comments make me think that you didn't read my post with much care or, perhaps, comprehension; your comments do not make me think, but lead me to know, that you utterly failed to understand my post in the context of comments posted by folks in a discussion forum tread.
Oh, how years of exposure to WFB will hone's one rhetorical and rebuttal skills! And one's insulting arrogance!
Terryray: So: Bankers are corrupt bald-headed guys who made all kinds of irrational decisions 'cause of greed--result was buncha dumb loans.
True.
Terryray: Regulators, on the other hand, are rational folks, not caught up in "any action" or greed (even for thier careers?) and can clearly see the problems, and can stop these bankers from hurting themselves and losing billions.
False.
Terryray: that argument is beyond laughable, actually pitiful.
That's your argument, not the writer's.
Terryray: So: There is abolutely zero evidence from this crisis that more power to regulators and more regulatory rules would have helped even the least bit. Zero
Now THAT argument is beyond laughable.
True.
Terryray: Regulators, on the other hand, are rational folks, not caught up in "any action" or greed (even for thier careers?) and can clearly see the problems, and can stop these bankers from hurting themselves and losing billions.
False.
Terryray: that argument is beyond laughable, actually pitiful.
That's your argument, not the writer's.
Terryray: So: There is abolutely zero evidence from this crisis that more power to regulators and more regulatory rules would have helped even the least bit. Zero
Now THAT argument is beyond laughable.
Trench Fickler, those characterizations of banker and regulators I made (and I assume yours too) were exaggerations to make a point.
That main point was the rest of my post, which you conveniently ignore.
I will restate the main point, in a different way, in hopes of getting it across a second time.
There were only a handful of folks who clearly saw this financial crisis coming, and how to stop it. Most regulators were caught up in the same excitment and growing profits as everyone else.
How on earth can you devise a mechanism that will identify which handful of cassandras screaming warnings out there are correct, distinguishing them from the armies of cassandras all over the place that will be wrong?
Moreover, how on earth are you going to appoint these cassandras dictators so that they can force the Presidents, 90% of Congress and 80% of the regulators who (at the time, at the time, at the time) believed the problems couldn't develop into a crisis, or, rather, went on behaving that these developing problems couldn't turn out all that bad?
yes, regulations will get changed now. You certainly don't have to worry about a Sub-prime mortgage crisis in the near future! For the same reason you don't have to worry about another S+L crisis, or "Black Friday" huge market plunge. But believe me, another crisis will come along in future, which, like these, a handful of folks will foresee--and none of those handful of folks will be in the position to stop it. And few of us will be listening to them.
history :sadwave:
That main point was the rest of my post, which you conveniently ignore.
I will restate the main point, in a different way, in hopes of getting it across a second time.
There were only a handful of folks who clearly saw this financial crisis coming, and how to stop it. Most regulators were caught up in the same excitment and growing profits as everyone else.
How on earth can you devise a mechanism that will identify which handful of cassandras screaming warnings out there are correct, distinguishing them from the armies of cassandras all over the place that will be wrong?
Moreover, how on earth are you going to appoint these cassandras dictators so that they can force the Presidents, 90% of Congress and 80% of the regulators who (at the time, at the time, at the time) believed the problems couldn't develop into a crisis, or, rather, went on behaving that these developing problems couldn't turn out all that bad?
yes, regulations will get changed now. You certainly don't have to worry about a Sub-prime mortgage crisis in the near future! For the same reason you don't have to worry about another S+L crisis, or "Black Friday" huge market plunge. But believe me, another crisis will come along in future, which, like these, a handful of folks will foresee--and none of those handful of folks will be in the position to stop it. And few of us will be listening to them.
history :sadwave:
Next, to clarify the 20/20 hindsight aspect of my regulatory policy argument:
As the Rolling Stone article notes, when covering the OTS and attacking Christopher Cox: the regulations necessary to stop this financial crisis were already on the books. The regulators needed no more regulations or power. They had the tools already. The laws on the books didn't fail us.
It was a human failure--these guys didn't see the need to enforce certain regulations vigorously. The Fed also was granted broad regulatory powers over banks and didn't exercise it.
And it's only lessons learned in hindsight that folks can point to certain pieces of legislation that might have made a big difference. Folks who opposed the deregulation aspects of Glass-Steagall Act focused mostly on things other than that it might contribute to a financial crisis. But, as I've mentioned here before, I don't think Glass-Steagall repeal is much of a culprit here anyway. Another piece on it... Similarly with problems from the Commodity Futures Modernization Act--only one single prominent person, at the time, vigorously warned us about the dangerous bombshell that this little deriviative market could grow into, as this NPR story reports "no one had the sense then of systemic risk". Folks who opposed it back then did so on other grounds.
Lack of regulations wasn't a problem. Getting the regulator to excercise thier power, in exactly these areas the cassandras warned of, was the problem. Thus, this is a problem you cannot solve in time, because the fixes are only obvious to most in 20/20 hindsight.
As the Rolling Stone article notes, when covering the OTS and attacking Christopher Cox: the regulations necessary to stop this financial crisis were already on the books. The regulators needed no more regulations or power. They had the tools already. The laws on the books didn't fail us.
It was a human failure--these guys didn't see the need to enforce certain regulations vigorously. The Fed also was granted broad regulatory powers over banks and didn't exercise it.
And it's only lessons learned in hindsight that folks can point to certain pieces of legislation that might have made a big difference. Folks who opposed the deregulation aspects of Glass-Steagall Act focused mostly on things other than that it might contribute to a financial crisis. But, as I've mentioned here before, I don't think Glass-Steagall repeal is much of a culprit here anyway. Another piece on it... Similarly with problems from the Commodity Futures Modernization Act--only one single prominent person, at the time, vigorously warned us about the dangerous bombshell that this little deriviative market could grow into, as this NPR story reports "no one had the sense then of systemic risk". Folks who opposed it back then did so on other grounds.
Lack of regulations wasn't a problem. Getting the regulator to excercise thier power, in exactly these areas the cassandras warned of, was the problem. Thus, this is a problem you cannot solve in time, because the fixes are only obvious to most in 20/20 hindsight.
Terryray, I always enjoy your posts.
Faith in regulation is religious. It is not susceptible to rational inquiry. The unexamined assumption of the Governmentalist dogma is that regulators are drawn not from the ranks of the industries they regulate, but from some kind of supermen without the greed, stupidity and shortsightedness of the average earthling.
Faith in regulation is religious. It is not susceptible to rational inquiry. The unexamined assumption of the Governmentalist dogma is that regulators are drawn not from the ranks of the industries they regulate, but from some kind of supermen without the greed, stupidity and shortsightedness of the average earthling.
The Rolling Stone article does not exonerate the regulators, but placing the blame for the economic crisis squarely on the shoulders of the regulators is like blaming our troops for the actions of the insurgents in Iraq.
