Financial overhaul deal gives Obama a new triumph

[Blake]

By JIM KUHNHENN and ALAN FRAM, Associated Press Writers Jim Kuhnhenn And Alan Fram, Associated Press Writers – 30 mins ago

WASHINGTON – The toughest financial regulations since the Great Depression are headed for final votes in Congress next week, covering everything from debit card swipes at Starbucks to the most complex securities, in an election-year salve for public anger over the Wall Street risk-taking that cost millions their jobs, homes and nest eggs.

more.....

http://news.yahoo.com/s/ap/us_financial_overhaul;_ylt=Av4AJhVHhZSElPApeNE2rwW s0NUE;_ylu=X3oDMTNsMTBxb3RpBGFzc2V0A2FwLzIwMTAwNjI 1L3VzX2ZpbmFuY2lhbF9vdmVyaGF1bARjY29kZQNtb3N0cG9wd WxhcgRjcG9zAzEEcG9zAzIEcHQDaG9tZV9jb2tlBHNlYwN5bl9 0b3Bfc3RvcnkEc2xrA2ZpbmFuY2lhbG92ZQ--

[boutons_deux]

payday loan sharks and auto dealers escape, making for more RePo episodes.
somebody always gets special treatment.

[Winehole23]

We're not supposed to run AP stories, y'all.

[Blake]

We're not supposed to run AP stories, y'all.

AP too?

ok, I cut off the bulk.

[Winehole23]

AP too?Who else, Blake?

[Blake]

Who else, Blake?

SA Express News threatened Kori/LJ if anyone posted full EN articles around here.

[Winehole23]

Thanks, Blake :tu

[CosmicCowboy]

I wouldn't call it a triumph until it clears the Senate. At 2000 pages theres no telling what got hidden in there that will come to light in the next couple of days. All it will take is a few democrats getting cold feet. They already walked the plank on health care and may not be inclined to follow again.

[Blake]

Thanks, Blake :tu

guess this'll be the last time I try to post a full article from anywhere.

[CosmicCowboy]

Just wait till credit cards start getting cancelled in mass on less than A+ credit borrowers. Take the reward out of the risk equation and banks will do what they have to do to survive. The most visible result of this will be that it will be even harder for the ordinary person to get credit/loans.

[Winehole23]

Attempting to enact a few, feeble, watered down restrictions on business in the wake an epochal market adjustment triggered by irresponsibly overleveraged risk in certain asset categories( and other "infiduciary" and otherwise fraudulent activities) -- is not walking the plank. Far from it. But you might be right about it not passing eventually.

Business will swallow its medicine and cry all the way to the bank about the horrible new rules. They're a pitiful joke.

[Winehole23]

guess this'll be the last time I try to post a full article from anywhere.I don't see any reason why it should. Kori and Timvp will let us know if we're getting them in trouble.

[CosmicCowboy]

Did you notice that in 2000 pages there wasn't one mention of Fannie May or Freddie Mac?

:lmao

hypocritical cunts...

[Winehole23]

Just wait till credit cards start getting cancelled in mass on less than A+ credit borrowers.As I recall, credit card companies used not to extend very much credit to people who don't reliably pay. That sure changed, huh?

[CosmicCowboy]

As I recall, credit card companies used not to extend very much credit to people who don't reliably pay. That sure changed, huh?

I'm not saying thats not a good thing. I'm just saying the guys that constantly carry a balance and pay the minimum every month are about to get a big shock if the government cuts the CC companies fees/interest. The risk/reward ratio won't justify keeping the account open.

I'm not sure thats something you really want to do in a fragile economic recovery. Sometimes the best of intentions can cause unanticipated bad results.

[CosmicCowboy]

Plus, they supposedly are cutting merchant fees. You guys that pay your bills and use credit cards with rewards/points/airline miles are about to get fucked. You can kiss that shit goodbye. Those rewards are paid from merchant fees.

Personally I like that part of the deal. Cut my merchant fees 100 basic points and fuck all of you rewards guys LOL. I'll take the money I save and pay cash for airline tickets.

[Winehole23]

I'm not sure thats something you really want to do in a fragile economic recovery. Sometimes the best of intentions can cause unanticipated bad results.I see what you mean. The reform could make high-risk debtors more unattractive to CC companies.

Wasn't it kind of fucked up they intentionally chose risky clients with the certain foreknowledge of charging them miles of fees and fines and pushing up their rates usuriously?

[CosmicCowboy]

I see what you mean. The reform could make high-risk debtors more unattractive to CC companies.

Wasn't it kind of fucked up they intentionally chose risky clients with the certain foreknowledge of charging them miles of fees and fines and pushing up their rates usuriously?

Seems to me we had willing buyers and sellers. I'm not saying that the sellers weren't more legally/financially savvy but the buyers wanted it NOW. They got it.

Now they won't.

I knew the fiscally sound world as it should be was coming to an end when I saw "Rent a Tire" centers going up all over town.

[Yonivore]

Are any of the liberals, in here, the least bit bothered that the Democrats have passed yet another bill that they don't know what it does until it's passed?

Seriously.

[ChumpDumper]

Are any of the liberals, in here, the least bit bothered that the Democrats have passed yet another bill that they don't know what it does until it's passed?

Seriously.Since there are several articles saying what is in the bill, it's probably safe to say you're wrong.

Seriously.

[ducks]

did you read the 2000 pages

[Yonivore]

House, Senate leaders finalize details of sweeping financial overhaul (http://www.washingtonpost.com/wp-dyn/content/article/2010/06/25/AR2010062500675_pf.html)


"It's a great moment. I'm proud to have been here," said a teary-eyed Sen. Christopher J. Dodd (D-Conn.), who as chairman of the Senate Banking Committee led the effort in the Senate. "No one will know until this is actually in place how it works. But we believe we've done something that has been needed for a long time."

I'm reminded...

Pelosi Remarks at the 2010 Legislative Conference for National Association of Counties (http://www.speaker.gov/newsroom/pressreleases?id=1576)


“But we have to pass the bill so that you can find out what is in it, away from the fog of the controversy."

So, $1trillion dollars and a couple of hundred bureaucracies later and there is still not one single American receiving Obamacare.

Sorry, I think they should know what legislation is going to do before they pass it. God know, the rest of us were telling them Obamacare would be a fiasco.

[ChumpDumper]

lol reading comprehension

[George Gervin's Afro]

House, Senate leaders finalize details of sweeping financial overhaul (http://www.washingtonpost.com/wp-dyn/content/article/2010/06/25/AR2010062500675_pf.html)



I'm reminded...

Pelosi Remarks at the 2010 Legislative Conference for National Association of Counties (http://www.speaker.gov/newsroom/pressreleases?id=1576)





So, $1trillion dollars and a couple of hundred bureaucracies later and there is still not one single American receiving Obamacare.

Sorry, I think they should know what legislation is going to do before they pass it. God know, the rest of us were telling them Obamacare would be a fiasco.

1 trillion dollars have been spent already?

How did that prediction of yours workout when you claimed the day after the healthcare bill passed that the healthcare companies stocks would nosedive?

how did that workout?

[ElNono]

Banks Likely to Offset Impact of New Law, Analysts Say (http://www.nytimes.com/2010/06/26/business/26reax.html?hp=)

[George Gervin's Afro]

1 trillion dollars have been spent already?

How did that prediction of yours workout when you claimed the day after the healthcare bill passed that the healthcare companies stocks would nosedive?

how did that workout?

[Wild Cobra]

SA Express News threatened Kori/LJ if anyone posted full EN articles around here.
It's not a good idea to post anything in full for copyright reasons.

Take a snippet or two and link.

[EVAY]

Attempting to enact a few, feeble, watered down restrictions on business in the wake an epochal market adjustment triggered by irresponsibly overleveraged risk in certain asset categories( and other "infiduciary" and otherwise fraudulent activities) -- is not walking the plank. Far from it. But you might be right about it not passing eventually.

Business will swallow its medicine and cry all the way to the bank about the horrible new rules. They're a pitiful joke.

Mostly I agree with this. The one thing that I think is good is the new agency, which in the post that ElNono put up, got some good reviews. Let's face it, guys, as much as Boutons is just a tad 'over-the-top' with most of his railing about how corps own the government, this is one example of regulation that was long overdue admittedly being watered down by the lobbyists, but still being worth the effort to do.

[EVAY]

I like Judd Gregg and respect his opinions, but I take his opinions on this particular bill to be as much motivated by November elections as the bill itself is motivated by the same elections.

[EVAY]

I like the Lincoln amendment and the derivatives requirement, although I agree with Judd Gregg that the derivative thing doesn't go far enough.

Of course, I would like to see derivatives banned. There is no need for them, and they are a perversion of asset trading, in my opinion.

[boutons_deux]

the bill is progress, but the financial sector bought enough legislators to escape the really serious stuff

=========



Big Banks Escape Toughest Limits in New Regulation Bill

Saturday 26 June 2010

by: Kevin G. Hall and David Lightman | McClatchy Newspapers | Report

Washington - Like a hard-fought draw in a World Cup soccer match, consumers won sweeping new protections under a revamp of financial regulation that lawmakers agreed to Friday but large banks dodged the biggest hits that had been coming their way.

The sweeping regulatory revamp affects everything from credit cards and mortgages to the structure of large global banks and who regulates the financial sector and how.

Lawmakers, narrowing the differences between legislation from the House of Representatives and the Senate, agreed to establish a Bureau of Consumer Financial Protection to address the shoddy lending and ineffective regulation that helped bring about the nation's financial crisis.

Congressional negotiators also rejected attempts to weaken the new bureau, retaining an independent source of funding and an independent director rather than a board of directors.

When the full House and Senate take up the entire bill next week, however, they'll vote on a package that won't hit big banks nearly as hard as Congress first contemplated.

Banks won't have to prepay billions of dollars into a fund to cover the cost of breaking up large failing financial institutions, as both the House and Senate first proposed. Banks also escaped a limitation on their size, and there's no explicit prohibition of government rescues if their failures pose major risks to the economy.

In addition, they'll have to wall off their trading in the lucrative, complex instruments called derivatives in separate related companies. The lack of transparency surrounding derivatives amplified the financial crisis.

In a compromise brokered by the Treasury Department, banks were able to keep their trading desks for common — and generally less-risky — types of derivatives, such as bets on swings in interest rates and on the U.S. dollar's value against other currencies. This move won over the New Democrat Coalition, 69 moderates in the House.

The compromise "combines tough new rules and oversight that reduce systemic risk on Wall Street with provisions that allow American manufacturers and lenders to reduce their own risk," Reps. Joseph Crowley, D-N.Y., and Melissa Bean, D-Ill., said in a statement to McClatchy.

The softening was a sigh of relief for Wall Street, but slapping high fives was unlikely because banks lost the right to conduct trading operations if they also trade on behalf of clients.

The legislation builds a wall between commercial banking and investment activities that was in place for almost seven decades before Congress took it down in 1999. Less than a decade later, Wall Street's runaway risk-taking brought the global economy to near-collapse in the fall of 2008. Friday's compromise requires deposit-taking banks to divest their proprietary trading operations over time.

"If implemented effectively, :lol :lol it will significantly reduce systemic risk to our financial system and protect American taxpayers and businesses from Wall Street's risky bets. This is an important step forward from the current system," Sens. Carl Levin, D-Mich., and Jeff Merkley, D-Ore., the authors of the tough provision, said in a joint statement Friday.

"This law will send a clear warning: No longer will we allow recklessness on Wall Street to cause joblessness on Main Street," said House Speaker Nancy Pelosi, D-Calif.

Former investment banker Douglas Elliott, who's now an analyst for the Brookings Institution, a center-left policy-research center in Washington, agreed that the bill accomplishes much.

"There are maybe 15 major things in this bill, and if we only talk about two or three, we're missing the big picture, and the things work together," he said.

Throughout the two-week negotiations, efforts were made to ensure that there'd be 60 votes in favor of it in the Senate, to prevent a filibuster next week. That meant ceding to some demands from moderate Republicans and liberal Democrats.

When President Barack Obama was asked Friday whether the votes were there for final passage next week, he quipped: "You bet."

Yet there were doubts Friday, too.

"It's really hard to make the case this bill does all that's needed to do," said Sen. Byron Dorgan, D-N.D., the chairman of the Senate Democratic Policy Committee. "It doesn't really deal with 'too big to fail.' It doesn't necessarily stop speculative wagering."

Dorgan didn't say Friday how he'd vote.

"Is it better than nothing? It does set up new regulatory approaches," he said. "But we had a chance to do much, much more."

The legislation gives the Federal Reserve and a new council of regulators the power to tell large and globally interconnected financial firms to get smaller through spinoffs because their size threatens the broader financial system.

It also creates a process for dissolving large institutions whose failure threatens other big firms. The lack of these powers led the government into unpopular bailout programs to prevent a domino-like collapse of the global financial system.

Those bailouts still anger voters, and that complicates the sales pitch for Democrats, especially because the legislation is complex.

"Go down to Paulding County, Georgia, or take the first exit off Interstate 95 in Florida, and ask people what they think about financial regulation," said Brad Coker, the managing director of Mason-Dixon Polling & Research, which polls nationwide. "How many people anywhere know what a derivative trade is? These are very nerdy kinds of issues."

Rep. Chris Van Hollen, D-Md., the head of the Democratic House campaign committee, was confident that voters will see the benefits.

"You will soon have within the Fed an agency whose sole job is to make sure consumers are not cheated or unfairly taken advantage of by credit card companies, lenders and banks on mortgages and other credit. That is the one thing that has a direct impact on consumers on a day-to-day basis," he said.

How well the legislation works to forestall financial crises will depend on whether other developed nations follow suit.

"We need to act in concert," Obama said Friday at the White House.

Not all the changes in the compromise legislation will happen immediately. Many will be phased in, while others require study and consultation with affected industries. Additionally, regulators were given wide latitude to fill in details.

"There will be a lot of employment opportunities for lawyers," said Bert Ely, a banking consultant who expects a big push to find ways around new regulation. "I think a lot of entrepreneurial activity will be 'how do we end-around this?'"

In a harsh statement Friday, U.S. Chamber of Commerce CEO Thomas Donohue vowed to "work vigorously through all available avenues — regulatory, legislative and legal" to change the "flawed" legislation.

http://www.truth-out.org/big-banks-escape-toughest-limits-new-regulation-bill60811?print

=====

In the battle of regulated vs regulators, the regulated always win, because they have 100 of $Bs to win by committing their crimes well, while bureaucratic regulators have nothing to lose for doing their jobs poorly.

America is fucked.

btw, payday loan sharks have been crippled with the limit on their interest being set at 99%, down from 1000$. :lol :lol

[Yonivore]

2,000 pages of financial overhaul legislation and neither Fannie Mae nor Freddie Mac are mentioned?

http://www.powerlineblog.com/archives/media/toonBW_062510_FULL.jpg

Just remember, any costs to the banks will be passed on to you.

[EVAY]

^^^^^ Yes, it was the requirement that a separation be maintained between trading for clients and using the bank's own money for trading that I thought was good. Similarly, the attempt to go back to a version (however watered-down) of the Glass-Steagall Act.

It was in fact very watered down, but it was better than nothing. That is where I disagree with Judd.

[boutons_deux]

"2,000 pages of financial overhaul legislation and neither Fannie Mae nor Freddie Mac are mentioned"

There are some legal actions on behalf of Freddie and Fannie to go after mortgages sellers who knowingly sold F&F toxic shit. I note that Yoni only mentions F&F and not the fuckers who sold shit to F&F.

Typical right winger, always parroting right wing fog of lies to hide the real culprits.

[Veterinarian]

lol comics strips

Gimme a fucking break.

Are we going to be linking to youtube videos of Bugs Bunny monologues to prove our points next?

[CosmicCowboy]

"2,000 pages of financial overhaul legislation and neither Fannie Mae nor Freddie Mac are mentioned"

There are some legal actions on behalf of Freddie and Fannie to go after mortgages sellers who knowingly sold F&F toxic shit. I note that Yoni only mentions F&F and not the fuckers who sold shit to F&F.

Typical right winger, always parroting right wing fog of lies to hide the real culprits.

Fannie and Freddie get the full loan packages and always had the right to accept/reject. They are the ones that told the brokers they would finance 100% with no verification of income.

Talk about parroting the party line...:lmao

I'm disgusted with Fannie, Freddie, AND the banks/brokers that fed them those crap loans, but the ultimate responsibility lay with Fan and Fred.

[CosmicCowboy]

BTW, with Byrd's death there is a good chance this bill won't get out of committee in the Senate.

[George Gervin's Afro]

2,000 pages of financial overhaul legislation and neither Fannie Mae nor Freddie Mac are mentioned?

http://www.powerlineblog.com/archives/media/toonBW_062510_FULL.jpg

Just remember, any costs to the banks will be passed on to you.

Yoni I'm still waiting for you to show me where Obama has spent a trillion dollars of his healthcare bill...

[boutons_deux]

"always had the right to accept/reject."

DoJ is going after Goldman for selling $1B of shit they didn't expose as shit.

I guess the mortgage unloaders consider F&F to be "dumb" investors they can sell shit to.

As I've said many times, capitalism is basically an adversarial system where the seller tries to sell the shittiest product possible for the highest possible price. It's fundamentally fraud and dishonest.

[CosmicCowboy]

"always had the right to accept/reject."

DoJ is going after Goldman for selling $1B of shit they didn't expose as shit.

I guess the mortgage unloaders consider F&F to be "dumb" investors they can sell shit to.

As I've said many times, capitalism is basically an adversarial system where the seller tries to sell the shittiest product possible for the highest possible price. It's fundamentally fraud and dishonest.

F&F didn't give a shit if they bought crap. All they wanted was to buy more crap every year than they did the year before so they could justify their exorbitant salaries and raises. They knew that in the end the US would pick up any losses.

[boutons_deux]

I'm not absolving F&F, and esp not assholes like Franklin Raines who walked away with 100s of $Ms, but the real perps are the mortgage sellers who knowingly wrote shitty mortgages, and then dumped them on F&F, and went off to write more shitty mortgages.

A US regulation that would stop this fraud is the one in Denmark, where the mortgage writer must service the mortgage to maturity.

[Winehole23]

They knew that in the end the US would pick up any losses.The lower cost (relative to other lenders) of risk to the GSEs strongly suggests the market was already pricing it in, pre-bailout.

[CosmicCowboy]

I'm not absolving F&F, and esp not assholes like Franklin Raines who walked away with 100s of $Ms, but the real perps are the mortgage sellers who knowingly wrote shitty mortgages, and then dumped them on F&F, and went off to write more shitty mortgages.

A US regulation that would stop this fraud is the one in Denmark, where the mortgage writer must service the mortgage to maturity.

I agree that the mortgage writer should always have some skin in the game even if they flip the note. I just don't see that happening in the US.

[spursncowboys]

guess this'll be the last time I try to post a full article from anywhere.

When I read what the EN sent, I just copy a few paragraphs at the most and then put a link. As long as you cut it up or leave some of the article out so they still have to go to the original source to get the entire article you are fine.

[spursncowboys]

Fannie and Freddie get the full loan packages and always had the right to accept/reject. They are the ones that told the brokers they would finance 100% with no verification of income.

Talk about parroting the party line...:lmao

I'm disgusted with Fannie, Freddie, AND the banks/brokers that fed them those crap loans, but the ultimate responsibility lay with Fan and Fred.

who aren't apart of this overhaul.

[boutons_deux]

Current estimate is that taxpayers will blow $400B bailing out F&F, which really isn't that much considering that they blew $T2+ in Iraq, another $T1 in Afghanistan, and $700B every year on military bullshit.

[EVAY]

I agree that the mortgage writer should always have some skin in the game even if they flip the note. I just don't see that happening in the US.

Well, this legislation requires banks who issue mortgages to keep at least 5% of the loan on their own books. I don't think it is anywhere near enough, but it is a step in the right direction, and my undedrstanding is that the new agency may be able to stiffen some of these regulations once it is up.

[EVAY]

Fannie and Freddie get the full loan packages and always had the right to accept/reject. They are the ones that told the brokers they would finance 100% with no verification of income.

Talk about parroting the party line...:lmao

I'm disgusted with Fannie, Freddie, AND the banks/brokers that fed them those crap loans, but the ultimate responsibility lay with Fan and Fred.

No. Ultimately the responsibility lay with the banks and mortgage companies and investment houses that ALL wanted to get into the mortgage business so they could jack up their fees, which were paid out based on getting a warm body buying, not based on the ability of that warm body to repay the loan.

Read the book The Big Short. If you re going to opine about this stuff, at least make it an educated opinion, please.

[EVAY]

After reading The big Short, (which is fairly technical but at least readable), then read The Devil's Casino, and if you are a glutton for punishment, then read Tower of Thieves, which, unfortunately reads like Faulkner wrote a book on the financial crisis.

[Winehole23]

After reading The big Short, (which is fairly technical but at least readable), then read The Devil's Casino, and if you are a glutton for punishment, then read Tower of Thieves, which, unfortunately reads like Faulkner wrote a book on the financial crisis.The book police takes note with growing interest.

Thanks for the recommendations. :tu

[CosmicCowboy]

No. Ultimately the responsibility lay with the banks and mortgage companies and investment houses that ALL wanted to get into the mortgage business so they could jack up their fees, which were paid out based on getting a warm body buying, not based on the ability of that warm body to repay the loan.

Read the book The Big Short. If you re going to opine about this stuff, at least make it an educated opinion, please.

And if you think that Michael Lewis is the ultimate neutral observer then you might need to be the one that needs educating.

[Winehole23]

And if you think that Michael Lewis is the ultimate neutral observer then you might need to be the one that needs educating.Perhaps EVAY misjudged you by suggesting you were unfamiliar with the topic, just as you presumed to speak for him as to the neutrality/bias of Mr. Lewis. Just saying.

[Winehole23]

Just say your say. Please leave the ventriloquizing to your betters on the radio, and give us your take on Michael Lewis, who stands pre-debunked before us, on your mere assertion.

Are you content to leave things right there? Is it within your preference to dispel the prevailing state of ignorance (which you clearly expressed) in this thread as to the actual case the which, so far, you are merely pointing at?

What's your take on Lewis? What the hell is wrong with him? I know zip on this one...

[Winehole23]

Educate me, jefe.

[CosmicCowboy]

Perhaps EVAY misjudged you by suggesting you were unfamiliar with the topic, just as you presumed to speak for him as to the neutrality/bias of Mr. Lewis. Just saying.

I'm not saying it wasn't an interesting and informative book, just that Lewis makes no bones about his bias. He cut his teeth 20+ years ago with "Liars Poker" after a short stint out of college working for a big investment bank.

[Winehole23]

I didn't read the book. What gets revealed?

[Winehole23]

Can you describe the appearance or identifying characteristics of the bias to which you have alluded again?

b

[Winehole23]

What exactly does Lewis cop to in the book?

[CosmicCowboy]

Can you describe the appearance or identifying characteristics of the bias to which you have alluded again?

b

:lmao

You really like to stir up shit don't you?

[Winehole23]

Have you read it yet CC, or are you just telling us what you heard about it?

[Winehole23]

:lmao

You really like to stir up shit don't you?How about a straight answer on your hitherto obscure beef with Lewis. You still haven't told us anything about it. More info, please?

[CosmicCowboy]

Yes, and I read liars poker when it came out too. The guy is a good writer and can personalize topics that generally are pretty dry. But IMHO it's kind of like reading James Michener. Don't take everything he says as gospel fact.

[Winehole23]

Fugit: http://www.nakedcapitalism.com/2010/03/debunking-michael-lewis-subprime-short-hagiography.html

[MannyIsGod]

Please don't recommend books to CC. I know you probably can't tell by the volume of posts in this thread, but he has a job.

Thanks.

[Winehole23]

The guy is a good writer and can personalize topics that generally are pretty dry. But IMHO it's kind of like reading James Michener. Don't take everything he says as gospel fact.Fair enough, but I don't think the conversation ever quite got that far.

[CosmicCowboy]

Please don't recommend books to CC. I know you probably can't tell by the volume of posts in this thread, but he has a job.

Thanks.

I know you are jealous Manny but it is what it is. BTW, has Jekka out grown your worthless ass yet? If not it's just a matter of time.

[boutons_deux]

Pinch of salt too with Matt Taibbi, but overall, the picture, very complex (complexity and opacity being key tools in financial fraud and theft), is more true than false.

Dylan Ratigan is another one worth reading:

http://www.huffingtonpost.com/rj-eskow/dear-dylan-ratigan-lets-r_b_627833.html

http://en.wikipedia.org/wiki/Dylan_Ratigan

[CosmicCowboy]

Dang, looks like Manny woke up just long enough to take a leak and vomit out one post and then went back to bed for another nap.

[boutons_deux]

Steve Forbes, inherited wealthy dude who's never done shit himself and perennial flat-tax pusher, loves that Byrd is dead and Scott is flip-flopping on financial reform.

http://thinkprogress.org/2010/06/28/steve-forbes-byrd/

[RandomGuy]

I didn't read the book. What gets revealed?

http://en.wikipedia.org/wiki/Liar%27s_Poker

That making large amounts of money in a capitalist system consists primarily of the ability to be lucky.

[LnGrrrR]

http://en.wikipedia.org/wiki/Liar%27s_Poker

That making large amounts of money in a capitalist system consists primarily of the ability to be lucky.

What? Surely, the sheer drive and determination of someone is what makes/breaks their future financial stability! Luck has no determining factor whatsoever! /snark, /conservative

To be honest, obviously people with drive/determination/ideas are better suited to "making their own luck". But there's probably 100 people out there with drive/determination/etc, but only 5 of those 100 will end up with the right set of circumstances to make it.

[EVAY]

Oh, for pete's sake!

What a todo about nothing.

The reason I brought up Lewis' book, as well as the other two, was not any attempt to present a mass-market writer as a financial guru. It was simply to suggest to those who cling to the time-worn but sadly inadequate explanation that FandF were the beginning and end of the housing debacle, along with anyone else 'not republican', should look a tiny bit further than their favorite boogey-men, and check out an easier-to-read description of what happened than the writings of Krugman, Steigler, or the Chicago school.

I spent about 15 years of my life directing the equity analyses of a certain sector of the market in a Fortune 50 company and representing that analysis in American and European debt and equity markets, and then teaching it in B-schools.

I don't take Lewis as the be-all-and-end-all, but his 'man-in-the-street' analysis is FAR, FAR, FAR superior in explanatory schema to what actually happened than blaming some feckless congressional lawyers who know about as much about finance as my grandson. (who is 5)

[Winehole23]

Oh, for pete's sake! Is swearing really necessary?:p:


What a todo about nothing.Welcome back to the thread.


The reason I brought up Lewis' book, as well as the other two, was not any attempt to present a mass-market writer as a financial guru. It was simply to suggest to those who cling to the time-worn but sadly inadequate explanation that FandF were the beginning and end of the housing debacle, along with anyone else 'not republican', should look a tiny bit further than their favorite boogey-men, and check out an easier-to-read description of what happened than the writings of Krugman, Steigler, or the Chicago school.By referring to the bolded so indirectly you did honor to our intelligence but it was apparently not equal to the task. We might have been spared the fruitless detour by means of more direct address, but sometimes people never get past preliminary throat clearing to the more direct issues at hand. We never got that far in this thread. JMO.

At least we found out CC read the Lewis book too, reluctant though he seems to discuss it in any detail. You might be able to talk to him about it intelligibly. (I had little luck doing so.)


I don't take Lewis as the be-all-and-end-all, but his 'man-in-the-street' analysis is FAR, FAR, FAR superior in explanatory schema to what actually happened than blaming some feckless congressional lawyers who know about as much about finance as my grandson. (who is 5)Others have already read the Lewis book so maybe that's a good place for me to start. Thanks again for the tip. :tu

[EVAY]

Is swearing really necessary?:p:
Welcome back to the thread.

By referring to the bolded so indirectly you did honor to our intelligence but it was apparently not equal to the task. We might have been spared the fruitless detour by means of more direct address, but sometimes people never get past preliminary throat clearing to the more direct issues at hand. We never got that far in this thread. JMO.

At least we found out CC read the Lewis book too, reluctant though he seems to discuss it in any detail. You might be able to talk to him about it intelligibly. (I had little luck doing so.)

Others have already read the Lewis book so maybe that's a good place for me to start. Thanks again for the tip. :tu

WH (by the way, congrats on the new pic...:lol). I actually did do a minor precis on the book in some other thread a while back. I don't remember the thread, but you yourself had asked me what was in the book, and I said that it wasn't easy to do a cliff note version of it, but generally it was a rendering of the extent to which the "masters of the universe" who run Wall Street firms were themselves singularly unaware of the extent of the risk involved in the credit-default swaps and derivatives in mortgages that they were putting together, and that we were all undone by it.


I also read the review that you linked, and disagree with the author of the review that Lewis was holding up the protagonists of his book as any sort of heroes at all. In fact, the first one is presented as he is...i.e. a total geek with asperger's and obsessive-compulsive disorder, who was really the only person in america with the time (no one else would hire him) and requisite personality disorders to figure out what was in the prospectuses (prospecti?)
that accompanied all of the mortgage-derivative offerings.

[EVAY]

Finally, if CC actually did read Lewis' book, I find his continued reliance on blaming everything on F and F even more disingenuous.

Surely, if we try really really hard, we can get past the overly facile "convenient scapegoats" to the more difficult realizations that some of our most cherished beliefs about how financial markets work need revision.

[EVAY]

Let me say it most directly:

Today's capital markets do NOT reflect the efficiency hypothesis upon which most all B-school statistical models of analysis are based.

Therefore, the statistical models that rating agencies, financial analysts, and many economists use are not going to have the predictive power that most assume they have, even in a probabilistic sense.

Therefore, blaming financial debacles on people who don't even understand as much as the Wall Streeters who pretend to know and understand is really off the mark.

Congress is full of lawyers, not financial analysts.

And remember that the debacle occurred during the tenure of our first MBA president.
Actually, I think W. had it pretty right when we said "Wall Street got drunk.

[boutons_deux]

Feingold has announced he will still refuse to vote for the reform bill, will not fill in for Byrd's missing support. Democrats fuck themselves again.

Feingold's perfect is the enemy of the good "enough for now". The devil will be in the regulatory details where Dems can harden the vagaries of the bad language (fucking lawyers) into something really biting.

[EVAY]

I agree that this is a good example of the perfect being the enemy of the good.

Moreover, given the likely result of November elections, any sort of realistic reform is not going to be in the offing.

I am literally in the process of moving to almost all cash for the next 9 months or so, trying to figure out what is going to happen with markets and elections.

Ricght now, I don't trust any of them...either party or wall street or Bernanke