Posted on 09/13/2009 11:46:27 PM PDT by rabscuttle385
Regulators today won't define 'systemic risk,' unlike 25 years ago.
With Congress back in session and the anniversary of the Lehman Brothers failure upon us, the Obama Administration is resuming its quest for greatly expanded authority to bail out American businesses. Under the Treasury reform blueprint, any financial company, whether a regulated bank or not, could be rescued or seized by the Federal Deposit Insurance Corporation if regulators believe it poses a systemic risk.
If recent history is any guide, when the feds stage their next intervention, they will not define "systemic risk" and they will refuse to release the data underlying their decision. To this day, taxpayers can only guess at the specific reasons behind the ad hoc rescues that began with Bear Stearns in March of 2008. Now Team Obama seeks to codify the bailout policies of the last 18 months.
Before receiving authority for new adventures across U.S. commerce, financial regulators should explain their current interventions. The basic questions: How exactly does the government measure systemic risk, and how do regulators know that the U.S. economy can't live without a particular firm? Americans still don't know why Bear, Citigroup and AIG were saved, but Lehman wasn't.
A recently-filed federal lawsuit seeks answers. Plaintiff Vern McKinley worked at the FDIC in the 1980s and is now suing his old employer, as well as the Federal Reserve. The two agencies have been stiff-arming his Freedom of Information Act requests on last year's bailouts.
(Excerpt) Read more at online.wsj.com ...
He should tell them in his FOIA request that there were payments going to the CIA and he’ll get the info released!
Too big to fail. That’s what I tell all the girls. : )
LOL!
Girls like advice. So you gotta give ‘em good advice. : )
While i do wish to see the reasons,the Lehman failure is a graphic demonstration of what happens. Toss in a few more large investment banks and we’d still be in October 08.
Of course,that can be ascribed to market reaction as well as anything.
ping
“Toss in a few more large investment banks and we’d still be in October 08.”
How much of what occurred was the result of the government “fixes” ripping the rug from under the financial institutions?
I’m convinced that the various failures were a result of the government pressure on Fannie and Freddy to make trillions in worthless loans followed buy various nonsensical moves that were described as stimulus.
The rot continues to spread.
Now it's Inflate or Die.
Um, the FOIA only applies to the federal government. It does not apply to private sector corporations.
The "Federal" Reserve is no more federal than Federal Express.
Money Market funds are about to lose government guarantees.
no question GSE’s were the root cause,the enablers. We can be pissed off we ever got there,i know i am,but the question is,what moves could have or should have been made once the poo hit the fan.
Interesting.
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