IGX

It's an extraordinary document. There is not space here to do it justice, but the gist is this: The Fed failed to regulate the banks because it did not encourage its employees to ask questions, to speak their minds or to point out problems.

Just the opposite: The Fed encourages its employees to keep their heads down, to obey their managers and to appease the banks. That is, bank regulators failed to do their jobs properly not because they lacked the tools but because they were discouraged from using them.

dead man walking wrote:soon johno and turd will post, suggesting that too is obama's fault

Grandpa's Spells wrote:This isn't really something you can blame Obama or Bush for, except for starting today.

The deal looked like a classic case of insider trading. But in the summer of 2005, when Aguirre [SEC investigator] told his boss he planned to interview [John] Mack, things started getting weird. His boss told him the case wasn't likely to fly, explaining that Mack had "powerful political connections." (The investment banker had been a fundraising "Ranger" for George Bush in 2004, and would go on to be a key backer of Hillary Clinton in 2008.)

Aguirre also started to feel pressure from Morgan Stanley, which was in the process of trying to rehire Mack as CEO. At first, Aguirre was contacted by the bank's regulatory liaison, Eric Dinallo, a former top aide to Eliot Spitzer. But it didn't take long for Morgan Stanley to work its way up the SEC chain of command. Within three days, another of the firm's lawyers, Mary Jo White, was on the phone with the SEC's director of enforcement. In a shocking move that was later singled out by Senate investigators, the director actually appeared to reassure White, dismissing the case against Mack as "smoke" rather than "fire." White, incidentally, was herself the former U.S. attorney of the Southern District of New York — one of the top cops on Wall Street.

Pause for a minute to take this in. Aguirre, an SEC foot soldier, is trying to interview a major Wall Street executive — not handcuff the guy or impound his yacht, mind you, just talk to him. In the course of doing so, he finds out that his target's firm is being represented not only by Eliot Spitzer's former top aide, but by the former U.S. attorney overseeing Wall Street, who is going four levels over his head to speak directly to the chief of the SEC's enforcement division — not Aguirre's boss, but his boss's boss's boss's boss. Mack himself, meanwhile, was being represented by Gary Lynch, a former SEC director of enforcement.

Aguirre didn't stand a chance. A month after he complained to his supervisors that he was being blocked from interviewing Mack, he was summarily fired, without notice. The case against Mack was immediately dropped: all depositions canceled, no further subpoenas issued. "It all happened so fast, I needed a seat belt," recalls Aguirre, who had just received a stellar performance review from his bosses. The SEC eventually paid Aguirre a settlement of $755,000 for wrongful dismissal.

Turdacious wrote:At least in terms of numbers, more GS people in the Obama WH than the GWB WH.
http://www.whiteoutpress.com/articles/q ... ite-house/

More importantly, when you run on being the guy who will effectively regulate the financial sector, and you don't-- you deserve to be judged on it. If Obama's done something significant in this area, other than taking credit for TARP, I'm not aware of it.

Fuzzy Dunlop wrote:

Turdacious wrote:At least in terms of numbers, more GS people in the Obama WH than the GWB WH.
http://www.whiteoutpress.com/articles/q ... ite-house/

More importantly, when you run on being the guy who will effectively regulate the financial sector, and you don't-- you deserve to be judged on it. If Obama's done something significant in this area, other than taking credit for TARP, I'm not aware of it.

Dodd Frank is quite a big dick up the ass of the entire industry

As Tom Hoenig (then President of the Federal Reserve Bank of Kansas City and now a Director of the FDIC) said, “Dodd-Frank has raised the cost of financial transactions in America and that encourages consolidation because it’s the only way you can spread the costs over larger assets.”

Turdacious wrote:

As Tom Hoenig (then President of the Federal Reserve Bank of Kansas City and now a Director of the FDIC) said, “Dodd-Frank has raised the cost of financial transactions in America and that encourages consolidation because it’s the only way you can spread the costs over larger assets.”

dead man walking wrote:regulation is imperfect and self-regulation is a license to steal.

what's your answer?

Turdacious wrote:

dead man walking wrote:regulation is imperfect and self-regulation is a license to steal.

what's your answer?

Return to pre-Clinton rules-- keeps financial firms smaller and keeps housing affordable.