Indeed. Karl Denninger is the guy who authored (mostly) and recommended The Genesis Plan to deal with the Credit Default Swap crisis back in late 2008. Very interesting reading that would probably be lost on most politicians. Certainly all the ones who voted for TARP.
To restore TRUST this is what Denninger recommends:
1. Force all off-balance sheet “assets” back onto the balance sheet, and force the valuation models and
identification of individual assets out of Level 3 and into 10Qs and 10Ks. Enact this requirement
beginning with the 3Q 2008 reporting period which begins next month. Total taxpayer cost: $0.00
2. Force all OTC derivatives onto a regulated exchange similar to that used by listed options in the equity
markets. This permanently defuses the derivatives time bomb. Give market participants 90 days to get
this done; any that are not listed in 90 days are declared void; let the participants sue each other if they
can’t prove capital adequacy. Total taxpayer cost: $0.00
3. Force leverage by all institutions to no more than 12:1. The SEC intentionally dropped broker/dealer
leverage limits in 2004; prior to that date 12:1 was the limit. Every firm that has failed had double or
more the leverage of that former 12:1 limit. Enact this with a six month time limit and require 1/6th of
the excess taken down monthly. Total taxpayer cost: $0.00