“I think that the financial reporters ignored it.”
I totally agree with this. The SEC is incompetent. Totally, and Cox should be fired. They allow completely bogus assets to be reported on 10-Ks and 10-Qs. Cramer is dead wrong on this. They continue to permit blatant Reg FD violations, which are widespread. They instituted option expensing, which is an idiotic accounting notion, under political pressure.
Congress writes the laws, he can only enforce, and has very limited enforcement powers that he has to treat like a criminal complaint and give to Justice.
The derivatives markets are intentionally unregulated. This is why it took so long before the crap hit the fan. The issuers of these things simply doubled down and issued more on the same debt and like with Lehman, they compounded their problems as the mark to market rules reduced the equity.
They will have to regulate them now, but that won't help this problem.
The Fed is doing the only thing they can afford to do, which is stabilize the underlying assets, those being mortgage backed CMO's, and this in turn should free up the derivatives for discounted sale.
I totally agree with this. The SEC is incompetent. Totally, and Cox should be fired. They allow completely bogus assets to be reported on 10-Ks and 10-Qs. Cramer is dead wrong on this. They continue to permit blatant Reg FD violations, which are widespread. They instituted option expensing, which is an idiotic accounting notion, under political pressure.
Last Thursday on his show, Rush played a soundbite of Hank (Maurice R.) Greenberg, he man who built AIG (incidentally, Greenberg has a Bronze Star from WWII, and his unit liberated Dachau Concentration Camp). Basically, Greenberg said that you can have regulations out the kazoo, but they don't mean a thing if incompetent or dishonest "regulatora" abuse the regs and cheat, etc. Transcript follows: GREENBERG: What is regulation? You can't replace management with regulation. Management is still responsible in the final analysis. If you do the right risk management and you have the right controls, then regulation is not going to make a difference there. If you have poor management, you can have all the regulation in the world and that's not going to change anything. And so, you know, my guess is that the problems that have come about have been management problems more than regulatory.
Source: Greenberg quote