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Still not seein' the, "The REPUBLICans did away with Regulations when they were in Power" Cry I am Hearing on the National Radio Networks formerly Known as Err Amerika...
To Thumb Fartmann's Credit, he Blames EVERYTHING on the 80's and Reagan...
http://www.nytimes.com/2008/10/03/business/03sec.html?_r=1Many events in Washington, on Wall Street and elsewhere around the country have led to what has been called the most serious financial crisis since the 1930s. But decisions made at a brief meeting on April 28, 2004, explain why the problems could spin out of control. The agencys failure to follow through on those decisions also explains why Washington regulators did not see what was coming.
On that bright spring afternoon, the five members of the Securities and Exchange Commission met in a basement hearing room to consider an urgent plea by the big investment banks.
They wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.
The five investment banks led the charge, including Goldman Sachs, which was headed by Henry M. Paulson Jr. Two years later, he left to become Treasury secretary.
A lone dissenter a software consultant and expert on risk management weighed in from Indiana with a two-page letter to warn the commission that the move was a grave mistake. He never heard back from Washington.
One commissioner, Harvey J. Goldschmid, questioned the staff about the consequences of the proposed exemption. It would only be available for the largest firms, he was reassuringly told those with assets greater than $5 billion.
Weve said these are the big guys, Mr. Goldschmid said, provoking nervous laughter, but that means if anything goes wrong, its going to be an awfully big mess.
Mr. Goldschmid, an authority on securities law from Columbia, was a behind-the-scenes adviser in 2002 to Senator Paul S. Sarbanes when he rewrote the nations corporate laws after a wave of accounting scandals. Do we feel secure if there are these drops in capital we really will have investor protection? Mr. Goldschmid asked. A senior staff member said the commission would hire the best minds, including people with strong quantitative skills to parse the banks balance sheets.
Annette L. Nazareth, the head of market regulation, reassured the commission that under the new rules, the companies for the first time could be restricted by the commission from excessively risky activity. She was later appointed a commissioner and served until January 2008.
Im very happy to support it, said Commissioner Roel C. Campos, a former federal prosecutor and owner of a small radio broadcasting company from Houston, who then deadpanned: And I keep my fingers crossed for the future.
The proceeding was sparsely attended. None of the major media outlets, including The New York Times, covered it.
After 55 minutes of discussion, which can now be heard on the Web sites of the agency and The Times, the chairman, William H. Donaldson, a veteran Wall Street executive, called for a vote. It was unanimous. The decision, changing what was known as the net capital rule, was completed and published in The Federal Register a few months later.
With that, the five big independent investment firms were unleashed.
In loosening the capital rules, which are supposed to provide a buffer in turbulent times, the agency also decided to rely on the firms own computer models for determining the riskiness of investments, essentially outsourcing the job of monitoring risk to the banks themselves.
Over the following months and years, each of the firms would take advantage of the looser rules. At Bear Stearns, the leverage ratio a measurement of how much the firm was borrowing compared to its total assets rose sharply, to 33 to 1. In other words, for every dollar in equity, it had $33 of debt. The ratios at the other firms also rose significantly.
The 2004 decision for the first time gave the S.E.C. a window on the banks increasingly risky investments in mortgage-related securities.
But the agency never took true advantage of that part of the bargain. The supervisory program under Mr. Cox, who arrived at the agency a year later, was a low priority.
Still not seein' the, "The REPUBLICans did away with Regulations when they were in Power" Cry I am Hearing on the National Radio Networks formerly Known as Err Amerika...
To Thumb Fartmann's Credit, he Blames EVERYTHING on the 80's and Reagan...
Here is one of the worst, that created the "too big to fail" banks, by allowing them to take on way too much debt, that had been prevented after the great depression.
http://www.nytimes.com/2008/10/03/business/03sec.html?_r=1Many events in Washington, on Wall Street and elsewhere around the country have led to what has been called the most serious financial crisis since the 1930s. But decisions made at a brief meeting on April 28, 2004, explain why the problems could spin out of control. The agencys failure to follow through on those decisions also explains why Washington regulators did not see what was coming.
On that bright spring afternoon, the five members of the Securities and Exchange Commission met in a basement hearing room to consider an urgent plea by the big investment banks.
They wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.
The five investment banks led the charge, including Goldman Sachs, which was headed by Henry M. Paulson Jr. Two years later, he left to become Treasury secretary.
A lone dissenter a software consultant and expert on risk management weighed in from Indiana with a two-page letter to warn the commission that the move was a grave mistake. He never heard back from Washington.
One commissioner, Harvey J. Goldschmid, questioned the staff about the consequences of the proposed exemption. It would only be available for the largest firms, he was reassuringly told those with assets greater than $5 billion.
Weve said these are the big guys, Mr. Goldschmid said, provoking nervous laughter, but that means if anything goes wrong, its going to be an awfully big mess.
Mr. Goldschmid, an authority on securities law from Columbia, was a behind-the-scenes adviser in 2002 to Senator Paul S. Sarbanes when he rewrote the nations corporate laws after a wave of accounting scandals. Do we feel secure if there are these drops in capital we really will have investor protection? Mr. Goldschmid asked. A senior staff member said the commission would hire the best minds, including people with strong quantitative skills to parse the banks balance sheets.
Annette L. Nazareth, the head of market regulation, reassured the commission that under the new rules, the companies for the first time could be restricted by the commission from excessively risky activity. She was later appointed a commissioner and served until January 2008.
Im very happy to support it, said Commissioner Roel C. Campos, a former federal prosecutor and owner of a small radio broadcasting company from Houston, who then deadpanned: And I keep my fingers crossed for the future.
The proceeding was sparsely attended. None of the major media outlets, including The New York Times, covered it.
After 55 minutes of discussion, which can now be heard on the Web sites of the agency and The Times, the chairman, William H. Donaldson, a veteran Wall Street executive, called for a vote. It was unanimous. The decision, changing what was known as the net capital rule, was completed and published in The Federal Register a few months later.
With that, the five big independent investment firms were unleashed.
In loosening the capital rules, which are supposed to provide a buffer in turbulent times, the agency also decided to rely on the firms own computer models for determining the riskiness of investments, essentially outsourcing the job of monitoring risk to the banks themselves.
Over the following months and years, each of the firms would take advantage of the looser rules. At Bear Stearns, the leverage ratio a measurement of how much the firm was borrowing compared to its total assets rose sharply, to 33 to 1. In other words, for every dollar in equity, it had $33 of debt. The ratios at the other firms also rose significantly.
The 2004 decision for the first time gave the S.E.C. a window on the banks increasingly risky investments in mortgage-related securities.
But the agency never took true advantage of that part of the bargain. The supervisory program under Mr. Cox, who arrived at the agency a year later, was a low priority.
Big Banks aren't Regulated?...
Dimmies also conveniently forget that the deregulation directly responsible for too big to fail financial institutions was signed by none other than Bill Clinton.
Dimmies also conveniently forget that the deregulation directly responsible for too big to fail financial institutions was signed by none other than Bill Clinton.
Yet I never see ANY Evidence of this Claim...
What Industry is Regulation Free?...
What Industries have had Regulations Removed by the GOP?...
Anyone?...
peace...
Yet I never see ANY Evidence of this Claim...
What Industry is Regulation Free?...
What Industries have had Regulations Removed by the GOP?...
Anyone?...
peace...
Oh wow, I love it when you guys go after a "gotcha" moment and then get "schooled". And the careful way you worded it, "What industry is regulation free"? You could say that it's a requirement that all shoes worn on oil rigs are white and then point and say, "See, they have a regulation". That's what Right Wingers do.
Unfortunately for you, there is a pollution producing industry that is indeed, "regulation free". It was deregulated under the Bush/Cheney Energy Policy Act of 2005. That industry is "fracture drilling for natural gas".
Carcinogenic chemicals are among 500 chemicals that are used in the process.
Pollution has been reported in 32 states. I've already put up thread after thread on this subject. So instead of putting up links, "PROVE ME WRONG". But I know you won't be able to.
[ame]http://www.youtube.com/watch?v=PRZ4LQSonXA[/ame]
Yet I never see ANY Evidence of this Claim...
What Industry is Regulation Free?...
What Industries have had Regulations Removed by the GOP?...
Anyone?...
peace...
Oh wow, I love it when you guys go after a "gotcha" moment and then get "schooled". And the careful way you worded it, "What industry is regulation free"? You could say that it's a requirement that all shoes worn on oil rigs are white and then point and say, "See, they have a regulation". That's what Right Wingers do.
Unfortunately for you, there is a pollution producing industry that is indeed, "regulation free". It was deregulated under the Bush/Cheney Energy Policy Act of 2005. That industry is "fracture drilling for natural gas".
Carcinogenic chemicals are among 500 chemicals that are used in the process.
Pollution has been reported in 32 states. I've already put up thread after thread on this subject. So instead of putting up links, "PROVE ME WRONG". But I know you won't be able to.
[ame]http://www.youtube.com/watch?v=PRZ4LQSonXA[/ame]
Oh damn. I ruined another thread with "facts". When will I ever learn. Right wingers don't need facts, they have "opinions", or so I've been told.
Oh wow, I love it when you guys go after a "gotcha" moment and then get "schooled". And the careful way you worded it, "What industry is regulation free"? You could say that it's a requirement that all shoes worn on oil rigs are white and then point and say, "See, they have a regulation". That's what Right Wingers do.
Unfortunately for you, there is a pollution producing industry that is indeed, "regulation free". It was deregulated under the Bush/Cheney Energy Policy Act of 2005. That industry is "fracture drilling for natural gas".
Carcinogenic chemicals are among 500 chemicals that are used in the process.
Pollution has been reported in 32 states. I've already put up thread after thread on this subject. So instead of putting up links, "PROVE ME WRONG". But I know you won't be able to.
http://www.youtube.com/watch?v=PRZ4LQSonXA
Oh damn. I ruined another thread with "facts". When will I ever learn. Right wingers don't need facts, they have "opinions", or so I've been told.
There is NO Regulation whatsoever on that Drilling?...
peace...
Dimmies also conveniently forget that the deregulation directly responsible for too big to fail financial institutions was signed by none other than Bill Clinton.
I don't believe it. Show me.
he's referring to Gramm?Leach?Bliley Act - Wikipedia, the free encyclopedia
Granted, there has been significant recent legislation easing financial restrictions. Most often mentioned is the Gramm-Leach-Bliley Act, which, as The New York Times described it on Monday, "removed barriers between commercial and investment banks that had been instituted to reduce the risk of economic catastrophes." Some argue that the law, which allowed traditional banks and investment firms to be affiliated under one holding company, helped bring on the credit meltdown. Even if true, how was that George W. Bush's fault? The law was signed by President Bill Clinton in 1999
To hear Liberals, you'd think the GOP did away with ALL Regulations while in Power...
