Wait a second... you want to blame ME for the financial crisis?

ARFCOM GD Board ^ | 03/22/2009 | Austrian

[Tempest]

I hope someone didn’t try the same fear-mongering arguement on you to convince you to repeat that to me...

[villagerjoel]

Strawman? Fear-mongering? Really?

Administration Seeks Increase in Oversight of Executive Pay

"The new rules will cover all financial institutions, including those not now covered by any pay rules because they are not receiving federal bailout money. Officials say the rules could also be applied more broadly to publicly traded companies, which already report about some executive pay practices to the Securities and Exchange Commission."

http://www.nytimes.com/2009/03/22/us/politics/22regulate.html?_r=2&pagewanted=1

[SAJ]

It wasn't necessary. Goobermint, throughout the 20th century and into this one, has done nothing whatever but expand its power (or try to) at every turn. The faux-syllogism for these tyrants-in-waiting seems to be: ''If I can regulate or control X, then I have the right to regulate Y'', where X and Y may or may not be related or interdependent.

Strawman? You're abusing a rhetorical term, mate. You might, if you disagree with me, accuse me of the rhetorical error of 'faulty analogy', but there is nothing at all 'strawmanish' about asserting that goobermint have continually abused power in order to accrue more of it. This is simply a true statement.

[Tempest]

I love how people run to the NYT as a source when it suits them..

The salary regs are reffered to as a “could be” or a “possibility” throughout the article, in which the author fails to provide any basis of facts for his assumptions.

[Tempest]

What and the corporate oligarchy hasn’t done the same thing? It’s foolish to pick sides out of either devils, it’s best to let them destroy each other.

[RikaStrom]

Check out the rant.

[SAJ]

Now, that is a faulty analogy.

In the private sector, one consents to work for a company for a known wage, which may in turn rise or fall over time. That wage is not set by an outside party, but by the company, with or without employee input as the case may be.

In the current goobermint-floated scheme, an outside party -- anmely, the goobermint -- proposes to set wages or cap them under some (soon to be all) circumstances.

And you compare these two? Sheesh.

[villagerjoel]

I’m sorry, would you preffer Fox News?

Report: Obama Administration Seeks to Regulate Executive Pay
FOXNews - Mar 21, 2009
Obama is expected to announce the plan, which officials said would include a broad new role for the Fed to oversee large companies, ahead of the G-20 summit ...
http://www.foxnews.com/politics/elections/2009/03/22/report-obama-administration-seeks-regulate-executive-pay/100days/

Or Maybe National Review?

Obama to Propose Government Oversight of Executive Pay [Andy McCarthy]
National Review Online Blogs - Mar 22, 2009
“The Obama administration will call for increased oversight of executive pay at all banks, Wall Street firms and possibly other companies as part of a ...
http://corner.nationalreview.com/post/?q=YWM2ODFlNDMxOTYwN2RlYzg4YzdkNmRjNTNmYjMxOWE=

[r9etb]

Camel's nose, m'friend. This chap sees quite clearly that, if the goobermint can unlawfully regulate the salaries of ANY persons, then sooner or later it will be regulating the salaries of everyone.

Perhaps so -- and I think that would be a bad thing.

OTOH, your comment does nothing to address the fact that the greedy bastards who caused this problem were actually taking advantage of a lack of government regulation in certain areas.

John Adams said, "We have no government armed in power capable of contending with human passions unbridled by morality and religion. Our Constitution was made only for a religious and moral people. It is wholly inadequate for the government of any other."

Where, as here, the finance types are clearly devoid of the sort of self-restraint about which Adams spoke ... a government based on an assumption of self-restraint is quite clearly insufficient to the task of making them behave.

[SAJ]

No offense, but you're mistaken. There were a plethora of applicable regulations. Remember, we're talking about securitsed loans at the root of the problem. There are 3 separate regulatory agencies that must pass on bundles of securitised loans before they can be put on offer.

Greedy bastards? Yep, no shortage of those. The greedy bastards couldn't have put the ball in play, though -- couldn't even have got the game going -- without the sheer and persistent incompetence of SEC, COC, CFTC, FASB, HUD, and easily a dozen other alphabet-soup agencies.

[r9etb]

Remember, we're talking about securitsed loans at the root of the problem. There are 3 separate regulatory agencies that must pass on bundles of securitised loans before they can be put on offer.

AIG didn't fail because of securitized loans. They were done in by credit default swaps that were anchored in air -- and not regulated.

Greedy bastards? Yep, no shortage of those. The greedy bastards couldn't have put the ball in play, though -- couldn't even have got the game going -- without the sheer and persistent incompetence of SEC, COC, CFTC, FASB, HUD, and easily a dozen other alphabet-soup agencies.

While I can certainly agree with you about the incompetence of those groups -- not to mention the politicians who appear to have stayed bought -- the greedy bastards are still to blame for their actions.

An honest financier would not have played the games those guys did.

[Tempest]

Uhhh where’s the private sector in your arguement? The banks and AIG are al practically owned by the government at this point?

[Tempest]

I only commented on the source as a point of humor. But the main point was that the language, specifically the word possible is the thing that you are not paying attention to.

Much like the 90% ex-post facto tax hike, such regulation of non-involved entities is not likely to pass a judicial challenge.

[SAJ]

They weren't when they fomented the problem, courtesy of greed and ridiculously lax and/or ineffective regulators. The banks and AIG are only owned by the goobermint now because of yet still more incompetence on goobermint's part in executing these ludicrous, and damned nearly criminal, bailouts.

The Swedes solved this type of 'crisis' very nicely in 1993-1995. One would have thought they'd solved it once and for all, for similar 'crises' in future...but then one wouldn't have reckoned with the level of incompetence of which the US goobermint is capable.

[SAJ]

AIG is an insurance company, principally, and as such is subject to all sorts of regulation, state and Federal, including supervisory regulation of investments they make. The regulators simply looked past CDSs, which is -- in retrospect -- hilarious.

Writing a CDS is nothing more, really, than writing a naked put on a debt instrument. When you or I -- or, ftm, Goldman Sachs or Merrill -- write a naked put on anything, we are required to margin the position properly. How the regulators 'thought' (if I may use that word; they clearly didn't think at all) that AIG or any other insuror could write untold stacks of these instruments WITHOUT proper margin requirement is just another indicator of how incompetent the regulators were...and undoubtedly still are.

I should have included CDSs in the original post, sorry.

[Tempest]

You’re not talking about securitized loans. You’re talking about securitized debt obligations (CDO/CDS)which weren’t regulated by the agencies you mentioned....

[Tempest]

So which is it? On one hand you say that their was too much government regulation then you laugh at government incompetence for not enough regulation?

Which is it?

[SAJ]

Reread the posts.

I never -- not once -- said or even implied that there was too much goobermint regulation, but rather that such regulations as existed were not enforced by the incompetent boobs who call themselves 'regulators'. Further that, greed notwithstanding (there will always be greedy bastards, after all), regulators could easily -- and I mean VERY easily -- have prevented something on the order of 65-70% of this debacle by simply doing their respective jobs.

Do please try to read what I wrote, and not what you'd like to think I wrote.

Part of the other 30-35% of the fiasco, btw, was caused BY regulators, specifically the ones who enforced Cuomo's 1994 rewrite of the regs governing the CRA of 1977. Without that little soiree, hundreds of billions in dodgy mortgage loans would quite literally never have been made, and thus not become a problem.

[SAJ]

Correct. I am NOT talking about securitised loans, and never have been. I am talking about the process of converting individual debt instruments into a larger debt instrument ('bundling') or into a quasi-stock or other form of tradeable security (which, sorry to tell you, is called 'securitisation'). Most CDOs were created by 'securitisation', which little fact btw also voids your other argument.

Guess what, sophist. CDOs (and SIVs, for that matter) cannot be issued and sold generally without approval of SEC and other alphatbeteers. They can be sold as private placements, and doubtless were in some cases, but most certainly not to the extent that they are now known to have existed. Not more than a moderate fraction, perhaps 25-30%.

Also, CDOs are not CDSs; they have no similarity at all. A CDS is effectively an insurance policy that buyers of CDOs and/or other debt instruments may sometimes desire, to protect against the default of the CDO or other debt. The fact that you co-mingle these two instruments in your arguments shows quite clearly your lack of understanding of what the hell went on.

Sorry, no more time to waste on this. Recommend you take a course or two in finance, or better still, start dealing in the real world with your own capital. Best way to learn. Ta-ta.

[Tempest]

I love how you support the article complaining about an excess of regulation and blame government and regulators for everything, yet you never complain about to much regulation...

Obviously Wall St. has no blame... it’s always someone elses fault...