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Archive for "Oct 01 2008"

Bubba Schools Barry on “De-Regulating” Banks, Offers a Lovely Backhanded Slap

In, Maria Bartiromo reports that she asked the former President last week whether he regretted signing that legislation. Mr. Clinton’s reply: “No, because it wasn’t a complete deregulation at all. We still have heavy regulations and insurance on bank deposits, requirements on banks for capital and for disclosure. I thought at the time that it might lead to more stable investments and a reduced pressure on Wall Street to produce quarterly profits that were always bigger than the previous quarter.

“But I have really thought about this a lot. I don’t see that signing that bill had anything to do with the current crisis. Indeed, one of the things that has helped stabilize the current situation as much as it has is the purchase of Merrill Lynch by Bank of America, which was much smoother than it would have been if I hadn’t signed that bill.”

One of the writers of that legislation was then-Senator Phil Gramm, who is now advising John McCain, and who Mr. Obama described last week as “the architect in the United States Senate of the deregulatory steps that helped cause this mess.” Ms. Bartiromo asked Mr. Clinton if he felt Mr. Gramm had sold him “a bill of goods”?

Mr. Clinton: “Not on this bill I don’t think he did. You know, Phil Gramm and I disagreed on a lot of things, but he can’t possibly be wrong about everything. On the Glass-Steagall thing, like I said, if you could demonstrate to me that it was a mistake, I’d be glad to look at the evidence.”

Bill v. Barack on Banks –

It (almost) daily becomes more amusing to see how Camp Clinton, especially Bubba, seems to be going out of its way to submarine Team Bambie.

What happened to the ‘Enron Rules’? How come none of THEIR PEOPLE are under indictment? They were caught fixing their books, yet NONE are facing Congrssioanl inquiry… what’s up with that?

Waxman was willing to go after fucking baseball players….

This article goes on to undermine many of The One’s (and his acolytes) talking points, notably that the changes made in 1999 that allowed it easier for American banks to compete with their European counterparts, who had no such restrictions on the interactions between “investment” and “commercial” banking operations:

Meanwhile, commercial banks that had heavier capital requirements were struggling to compete with the Wall Street giants throughout the 1990s. Some of the deposit-taking banks that were allowed to diversify after 1999, such as J.P. Morgan and Bank of America, are now in a stronger position to withstand the current turmoil. They have been able to help stabilize the financial system through acquisitions of Bear Stearns, Washington Mutual, Merrill Lynch and Countrywide Financial.

Mr. Obama’s “deregulation” trope may be good politics, but it’s bad history and is dangerous if he really believes it.

I want anyone to consider this: right now, there are approximately three ‘national’ banks.

I can claim no “expertise,” as many of the eggheads of academia claim when commenting on the current trevails on the various talking head bitchfests; announcing from their years of observation what really is going on while ensconced in their Ivy towers.

When you can, DO! When you can’t….

I learned my shit duking it out in the pits. When COMEX introduced options trading, I was one of the people who translated the marketing tag: “Gold for the not so bold” into “Mindless Idiots’ Market.”

In the initial days of options trading, the Commodity Exchange, Inc., used the marketing slogan, “Gold For the Not so Bold,” meaning that options could be a good trading alternative for participants who were inclined to be risk averse. While this might have been true from a retail customer’s point of view, nothing could be further from the truth from a market maker’s perspective. A buyer or seller of an options contract takes on an increased level of leverage from a futures contract which is a highly leveraged instrument in its own right. Options on futures contracts just multiply that leverage, especially from the short side. In the early days of the market, some of the boldest speculators engaged in options trading and some of the biggest equity swings occurred in options.

When the “derivatives” market sprung up I was asking everyone, “What the hell IS this stuff? What the fuck is actually BACKING these things?” I was told blarney about ‘former rocket scientists’ who had come up with these ingenious algorithmns… that never, ever, produced a down side to ANY strategy… which was patently fucking nuts.

This entire debacle resulted from one, COUNT IT, ONE! underlying fault line: The ‘irrational exuberance’ (to steal a line from Andrea Mitchell’s hubby) in the idea of “affordable housing,”, combined with ham-fisted tactics, approved by Congress, and squeezed for all it was worth by “community activists” like the Barry-trained foot soldiers of ACORN, to give loans to people who had no business even being considered to be eligible for an interview, nevermind actually getting approved. Then Frannie and Freddie bought all these bullshit mortgages, bundled them up, and sold them off with a wink and a nod (“don’t worry; the Guv’mint backs this craptastic paper through the Fed fisc”).

After watching all this going down, I tell Wife™, “We come back from St. Thomas and I am diving neck deep back into this shit. There is money just laying in the gutter waiting to be picked up.”

Wife™: “What if you’re wrong?”
Me: “Aren’t these idiots saying they’ll bail me out?”

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