Financial News

[kapkomet]

No, the people who did really dumb things are still ultimately at fault. Those who let them do dumb things are also responsible, but aren't the primary cause.

 

 

Really?

 

If you want real regulation, follow and enforce existing law. It's a "conservative" problem, to be sure, though.

 

Barney Frankless says hi.

[southsider2k5]

Because this isn't the only thing that happened that should have been against the law.

 

The irony if it took them three years to find one thing wrong with this huge supposed lack of laws, adding more laws is going to make them more effective and work quicker? That doesn't make any sense either. You are really reaching here.

[southsider2k5]

No, the people who did really dumb things are still ultimately at fault. Those who let them do dumb things are also responsible, but aren't the primary cause.

 

People who did things wrong, did them because there was little to no chance of them getting caught. There are laws on the books, and adding to them isn't going to aid the enforcement of things there are already laws against. All it will do is add to the workload and make sure laws get enforced even less. There is no reason it should have taken three years for one violation to be found by the SEC.

[Balta1701]

There is no reason it should have taken three years for one violation to be found by the SEC.

Yes there is. This is how the banks and their defenders want it.

[Balta1701]

One other note...the SEC didn't start subpoenaing financial firms about CDO's until December, 2009.

[southsider2k5]

One other note...the SEC didn't start subpoenaing financial firms about CDO's until December, 2009.

 

I'm not registered so I have no idea what the article said, but it you are saying it took until November 2009 to figure out there was a problem, you are kind of making my point for me about the way we regulate the financial sector being worthless.

[southsider2k5]

Yes there is. This is how the banks and their defenders want it.

 

And adding more rules to an ineffective unit is going to make them work better? If they can't handle the supposed few rules they have now, somehow they are going to get massive amounts of more work, and they are somehow going to be more accurate? Really that is like saying to Jayson Nix, we know you can't play anywhere but 2B, but hey, why don't you catch and pitch too while you are at it!

[Balta1701]

And adding more rules to an ineffective unit is going to make them work better? If they can't handle the supposed few rules they have now, somehow they are going to get massive amounts of more work, and they are somehow going to be more accurate? Really that is like saying to Jayson Nix, we know you can't play anywhere but 2B, but hey, why don't you catch and pitch too while you are at it!

A more accurate metaphor is that the Twins have someone in the White Sox clubhouse bribing Ozzie to do insane things like put Nix in at P or Kotsay batting 3rd.

 

It's not that they can't handle the work load they have. It's that they were deliberately, based on the political beliefs in the free market regulating itself...turning their backs.

[southsider2k5]

A more accurate metaphor is that the Twins have someone in the White Sox clubhouse bribing Ozzie to do insane things like put Nix in at P or Kotsay batting 3rd.

 

It's not that they can't handle the work load they have. It's that they were deliberately, based on the political beliefs in the free market regulating itself...turning their backs.

 

And even if that were remotely true, the rule structure is evidently there already, or else they wouldn't have been able to bring a lawsuit. So again, the problem isn't laws.

[Balta1701]

And even if that were remotely true, the rule structure is evidently there already, or else they wouldn't have been able to bring a lawsuit. So again, the problem isn't laws.

As I just said...the structure is already there to prevent Kotsay from batting 3rd, but if, for political reasons, Ozzie insists on doing so and it destroys his team...that doesn't mean you can't structure rules to prevent Ozzie from batting Kotsay 3rd in the future even if he remains on the take.

[southsider2k5]

As I just said...the structure is already there to prevent Kotsay from batting 3rd, but if, for political reasons, Ozzie insists on doing so and it destroys his team...that doesn't mean you can't structure rules to prevent Ozzie from batting Kotsay 3rd in the future even if he remains on the take.

 

Like I said, you already have the rules in place. This is a complete waste of time. Just like everything else big the Obama administration has done so far, it completely misses the heart of the problem, and instead creates a strawman to represent the problem. More laws solve nothing. Repeating strawman arguments over and over again doesn't change that. Until you change how we actually regulate the banks, all of the laws in the world aren't going to fix a damned thing, no matter how much you go on to demonize our system.

[Balta1701]

Like I said, you already have the rules in place. This is a complete waste of time. Just like everything else big the Obama administration has done so far, it completely misses the heart of the problem, and instead creates a strawman to represent the problem. More laws solve nothing. Repeating strawman arguments over and over again doesn't change that. Until you change how we actually regulate the banks, all of the laws in the world aren't going to fix a damned thing, no matter how much you go on to demonize our system.

Frankly, you're half right. This law "Solves" nothing as written. It would make things better and make the next bailout lest costly for taxpayers, but it wouldn't end them.

 

However, a well-written law that limited leverage, created an independent consumer products version of the FDA, created penalties that increased based on the size of the financial institution, ended the conflict of interest on the part of the regulating agencies, ended the conflict of interest on the part of ratings agencies, and bringing the "shadow banking" system of derivatives, overnight lending, and all the other off-the-books stuff onto the books...that actually would very likely end them. At least until the next time we decided to deregulate the financial system.

[Balta1701]

Simon Johnson and James Kwak on Moyers.

Finally getting around to watching this today. This blurb made me think quite a bit about 2k5.

SIMON JOHNSON: So, look, what I say to my, to all my Republican friends: on Fannie Mae and Freddie Mac, you were right. They became too big to fail. They captured Congress. They were known as some of the most formidable financial lobbyists in the 1990s. They argued for the rights to take on these kinds of risks, okay?

 

And the Republicans were right. The Republicans called them on this. But now it's the big private banks that have the same incentive structure. That have bulked themselves up so big that you can't let them fail. That's what we saw in September 2008. Hank Paulson looked at his options. And they are all pretty awful. And I'm not a big fan of Hank Paulson, but I think the moment where he looked at it, he was right. That if you let JPMorgan Chase or Goldman Sachs fail, the consequences would have been devastating, because they're so big. It's a Fannie May and Freddie Mac structure come to Wall Street, come to the top guys on Wall Street. And our Republican colleagues and friends should recognize this, they should acknowledge it. And then we can all fix this together.

[Balta1701]

TIFWIW

Washington is suddenly looking very unkind to the firm that used to be known as "Government Sachs." Now the Senate's Permanent Subcommittee on Investigations, led by Carl Levin, Democrat of Michigan, is planning to focus hearings scheduled for next week at least in part on Goldman Sachs's role in the financial disaster. Levin's staff has uncovered new documents "that link certain actions to specific people" at Goldman, according to a senior legislative official who spoke on condition of anonymity. The official would not divulge the nature of the allegation but said that Levin believes it amounts to "another big shoe to drop on Goldman." Spokespeople for Levin said they were not prepared to discuss the nature of the probe, but his committee has been conducting several weeks of hearings and one is planned for April 27 on "the role of the investment banks." "We expect to have some information tomorrow," spokesman Bryan Thomas said Monday.

[lostfan]

And adding more rules to an ineffective unit is going to make them work better? If they can't handle the supposed few rules they have now, somehow they are going to get massive amounts of more work, and they are somehow going to be more accurate? Really that is like saying to Jayson Nix, we know you can't play anywhere but 2B, but hey, why don't you catch and pitch too while you are at it!

If Nix didn't have pics of Ozzie participating in interspecies erotica or whatever I wouldn't put it past Ozzie at all.

[StrangeSox]

People who did things wrong, did them because there was little to no chance of them getting caught. There are laws on the books, and adding to them isn't going to aid the enforcement of things there are already laws against. All it will do is add to the workload and make sure laws get enforced even less. There is no reason it should have taken three years for one violation to be found by the SEC.

 

Ok, I think I generally agree with that. You've never been a fervent anti-all-regulation guy here which was the position I was driving at.

[Balta1701]

[Balta1701]

This is probably the "other shoe" that I noted last night.

AIG, the US government-controlled insurer, is considering pursuing Goldman Sachs over losses incurred on $6 billion of insurance deals on mortgage-backed securities similar to the one that led to fraud charges against the US bank

 

AIG’s [AIG 41.08 1.99 (+5.09%) ] move over the deals that caused it a loss of about $2 billion is a sign that Friday’s decision by the Securities and Exchange Commission to file civil fraud charges against Goldman could spark actions from investors who lost money on mortgage-backed securities.

 

If AIG and others discover that their transactions had disclosure issues similar to those alleged in the SEC charges, they would be able to complain to the SEC, file a private lawsuit, or both, lawyers said.

 

People close to the situation said that AIG was reviewing deals to insure $6bn-worth of Goldman’s [GS 160.9175 -2.4025 (-1.47%) ] collateralised debt obligations in the run-up to the crisis. They added that AIG had yet to decide whether to take action. AIG and Goldman declined to comment.

[lostfan]

The CEO of Citicorp wrote a thank you note to American taxpayers yesterday. Thought that was kinda funny... if nothing else, they've learned a little humility

[Jenksismyhero]

Kinda surprised there's not more discussion about this Obama/Goldman Sachs thing (CEO basically on speed dial) ala Bush and taking over the world for oil conspiracy. Thought this was a funny quote:

 

From Stephen Colbert, on the Goldman Sachs scandal:

 

"What's the problem? There's nothing illegal about selling customers a product designed to fail. The Chicago Cubs do it every year. Are they going to jail?"

 

[Balta1701]

Reid has filed for cloture on bringing the Financial Regulation bill to the floor. The cloture vote to start debate will happen after 72 hours...basically Sunday Night/Monday morning.

[mr_genius]

 

[Cknolls]

Yeah, GM paid back a gov't loan with TARP money.

[southsider2k5]

Well now at least we know what the SEC was doing while the financial markets crumbled...

 

http://www.washingtonpost.com/wp-dyn/conte...0042205783.html

 

SEC staffers watched porn as economy crashed

FILE- In this Dec. 17, 2008 file photo, the Securities and Exchange Commission (SEC) headquarters in Washington is shown. Senior staffers at the Securities and Exchange Commission spent hours surfing pornographic websites on government-issued computers while they were being paid to police the financial system, an agency watchdog said, Thursday, April 22, 2010. (AP Photo/File)

 

By DANIEL WAGNER

The Associated Press

Friday, April 23, 2010; 1:25 AM

 

WASHINGTON -- Senior staffers at the Securities and Exchange Commission spent hours surfing pornographic websites on government-issued computers while they were being paid to police the financial system, an agency watchdog says.

 

The SEC's inspector general conducted 33 probes of employees looking at explicit images in the past five years, according to a memo obtained by The Associated Press.

 

The memo says 31 of those probes occurred in the 2 1/2 years since the financial system teetered and nearly crashed.

 

The staffers' behavior violated government-wide ethics rules, it says.

 

It was written by SEC Inspector General David Kotz in response to a request from Sen. Charles Grassley, R-Iowa.

 

An SEC spokesman declined to comment Thursday night.

 

About 16 percent of men with Internet access at work admit to looking at online porn while at the office, according to a 2006 survey by Websense Inc.

 

Former SEC spokesman Michael Robinson said he shares the public's outrage about SEC staffers who enjoyed porn on the taxpayer dime when they were supposed to be keeping the markets safe.

 

"That kind of behavior is just intolerable and atrocious," said Robinson, now with Levick Strategic Communications. He said he expects SEC Chairman Mary Schapiro and her team are "very focused on" the issue.

 

Schapiro has had other worries in recent days. She has been parrying Republican attacks after announcing civil fraud charges Friday against Wall Street powerhouse Goldman Sachs Group Inc.

 

Agency officials had hoped the charges would mark a new era of tougher oversight of Wall Street. They followed high-profile embarrassments including the failure to catch Ponzi kings Bernard Madoff and R. Allen Stanford.

 

But soon after Goldman charges were filed, Republicans began questioning the timing of the announcement. The news came as the Senate prepared to take up a sweeping overhaul of the rules governing banks and other financial companies.

 

Republican lawmakers also accused the SEC of being influenced by politics. The SEC's commissioners approved the Goldman charges on a rare 3-2 vote. The two who objected were Republicans.

 

Schapiro is a registered independent who has been appointed by presidents of both parties.

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Associated Press writer Christine Simmons contributed to this report.

 

The memo was first reported Thursday evening by ABC News. It summarizes past inspector general probes and reports some shocking findings:

 

- A senior attorney at the SEC's Washington headquarters spent up to eight hours a day looking at and downloading pornography. When he ran out of hard drive space, he burned the files to CDs or DVDs, which he kept in boxes around his office. He agreed to resign, an earlier watchdog report said.

 

- An accountant was blocked more than 16,000 times in a month from visiting websites classified as "Sex" or "Pornography." Yet he still managed to amass a collection of "very graphic" material on his hard drive by using Google images to bypass the SEC's internal filter, according to an earlier report from the inspector general. The accountant refused to testify in his defense, and received a 14-day suspension.

 

- Seventeen of the employees were "at a senior level," earning salaries of up to $222,418.

 

- The number of cases jumped from two in 2007 to 16 in 2008. The cracks in the financial system emerged in mid-2007 and spread into full-blown panic by the fall of 2008.

 

California Rep. Darrell Issa, the top Republican on the House Committee on Oversight and Government Reform, said it was "disturbing that high-ranking officials within the SEC were spending more time looking at porn than taking action to help stave off the events that put our nation's economy on the brink of collapse."

 

He said in a statement that SEC officials "were preoccupied with other distractions" when they should have been overseeing the growing problems in the financial system.

 

[HuskyCaucasian]

Two Comments:

1) I hope that people dont some how equate that because some were watching porn, that lead to the financial collapse. That would a gross over simplification.

2) Firewalls? Web-filters? Has the SEC never heard of these things?