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Reddit"Break the Glass" was the code-name high-level Treasury Department figures gave the $700 billion bailout; it was to be used only as a last- resort measure.
Now millions have been sprayed and damaged by broken glass.
But more than a decade ago, a woman you're likely never to have heard of, Brooksley Born, head of the Commodity Futures Trading Commission-- a federal agency that regulates options and futures trading--was the oracle whose warnings about the dangerous boom in derivatives trading just might have averted the calamitous bust now engulfing the US and global markets. Instead she was met with scorn, condescension and outright anger by former Federal Reserve Chair Alan Greenspan, former Treasury Secretary Robert Rubin and his deputy Lawrence Summers. In fact, Greenspan, the man some affectionately called "The Oracle," spent his political capital cheerleading these disastrous financial instruments.
On Thursday, the New York Times ran a masterful and revealing front page article exposing the culpability of Greenspan, Rubin and Summers for the era of dangerous turbulence we live in.
What these "three marketeers" --as they were called in a 1999 Time magazine cover story--were adept at was peddling the timebombs at the heart of this complex crisis: exotic and opaque financial instruments known as derivatives--contracts intended to hedge against risk and whose values are derived from underlying assets. To cut to the quick, Greenspan, Rubin and Summers opposed regulating them. "Proposals to bring even minimalist regulation were basically rebuffed by Greenspan and various people in the Treasury," recalls Alan Blinder, a former Federal Reserve board member and economist at Princeton University, in the Times article.
In 1997, Brooksley Born warned in congressional testimony that unregulated trading in derivatives could "threaten our regulated markets or, indeed, our economy without any federal agency knowing about it." Born called for greater transparency--disclosure of trades and reserves as a buffer against losses.
Instead of heeding this oracle's warnings, Greenspan, Rubin & Summers rushed to silence her. As the Times story reveals, Born's wise warnings "incited fierce opposition" from Greenspan and Rubin who "concluded that merely discussing new rules threatened the derivatives market." Greenspan deployed condescension and told Born she didn't know what she doing and she'd cause a financial crisis. (A senior Commission director who worked with Born suggests that Greenspan and the guys didn't like her independence. " Brooksley was this woman who was not playing tennis with these guys and not having lunch with these guys. There was a little bit of the feeling that this woman was not of Wall Street.")
In early 1998, according to the Times story, one of the guys, Larry Summers, called Born to "chastise her for taking steps he said would lead to a financial crisis. But Born kept at it, unwilling to let arrogant men undermine her good judgment. But it got tougher out there. In June 1998, Greenspan, Rubin and the then head of the SEC, Arthur Levitt, Jr., called on Congress "to prevent Ms. Born from acting until more senior regulators developed their own recommendations." (Levitt now says he regrets that decision.) Months later, the huge hedge fund Long Term Capital Management nearly collapsed--confirming some of Born's warnings. (Bets on derivatives were a key reason.)
"Despite that event," the Times reports, " Congress (apparently as a result of Greenspan & Summer's urging, influence-peddling and pressure) "froze" Born's Commissions' regulatory authority. The next year, Born left as head of the Commission.Born did not talk to the Times for their article.
What emerges is a story of reckless, willful and arrogant action and behaviour designed to undermine a wise woman's good judgment. The three marketeers' disdain for modest regulation of new and risky financial instruments reveals a faith-based fundamentalist approach to the management of markets and risk. If there is any accountability left in our system, Greenspan, Rubin and Summers should not be telling anyone how to run anything. Instead, Barack Obama might do well to bring back Brooksley Born and promote to his team economists who haven't contributed to the ugly mess we're in.
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Katrina vanden Heuvel
Thoughts on politics, current affairs, riffs and reflections on what’s in the news and what’s not--but should be.
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Instead, Barack Obama might do well to bring back Brooksley Born and promote to his team economists who haven't contributed to the ugly mess we're in.
hear, hear!
Posted by frosty zoom at 10/09/2008 @ 11:56pm
pfft! i was warning folks about that crap back then also. like so many of my perfect prognostications, apparantly she stole THAT one too!!!
lol
actually my prophetic warnings of economic dystopia started sometime after i read about the events that led to the great depression and cross referenced that to what i was reading about in terms of economic policy pursued by repugnants and DINOS alike...
Posted by dexter666 at 10/09/2008 @ 11:58pm
There was one dissenting voice. Brooksley Born, a Clinton appointee who became the head of the CFTC in 1996, refused to accept the industry's stance. "In late 1997 and early 1998, she said the emperor has no clothes," says Greenberger. "She said that derivatives are futures contracts and that the CFTC had jurisdiction."
On May 7, in a 62-page report, the CFTC announced that changes in the derivatives market "require the commission to review its regulations." Born called for public comment and hearings.
But Enron refused to buckle. Protests from Wall Street's major players drew more attention than Enron's opposition, but a July 4, 1998, Washington Post article revealed that Enron was forging ahead at that very moment in an attempt to create an entirely new market for "weather derivatives" -- in which contracts on energy supplies would be dependent on bets as to whether the weather was hot or cold. Such contracts would be exactly the kind of new product that CFTC regulators would likely examine.
Posted by frosty zoom at 10/09/2008 @ 11:59pm
A handful of legislators, including Sen. Phil Gramm, R-Texas, kept the forces of regulation at bay. For Gramm, derivatives deregulation was a family affair: His wife, Wendy Gramm, chairwoman of the CFTC from February 1988 to January 1993, had earlier shepherded through the exemption that (in April 1993) let Enron trade energy derivatives without federal oversight. (A few months after passage of the exemption, she quit the CFTC and took a seat on Enron's board of directors.) Enron also found a set of allies in the U.S. Treasury Department, the Federal Reserve and the SEC. All three agencies, though headed by Born's fellow Clinton appointees, scorned the new CFTC proposal. They even issued a rare joint statement declaring that "we have grave concerns about this action and its possible consequences. We seriously question the scope of the CFTC's jurisdiction in this area."
Posted by frosty zoom at 10/09/2008 @ 11:59pm
But despite the link between LTCM and derivatives, calls for regulation fell on deaf ears. After organizing a bailout of LTCM, Fed chairman Alan Greenspan -- along with SEC chairman Arthur Levitt; William J. Rainer, Born's replacement at the CFTC; and Lawrence Summers, secretary of the treasury -- penned a 42-page report that favored less, rather than more regulation.
Congress followed suit, passing the Commodity Futures Modernization Act in December 2000.
Posted by frosty zoom at 10/09/2008 @ 11:59pm
"The CFMA made it clear that this kind of trading would be exempted," Greenberger says. "Only a handful of congressmen and senators probably realized that they were enacting this deregulatory provision."
Brooksley Born "had it just right," and should be considered a hero, adds Martin Mayer, a finance expert and author of more than a dozen books on the U.S. banking system. "The whole political establishment, from Rubin and Greenspan and Levitt and Phil Gramm, turned on her."
And Enron forged on, stepping up its involvement in derivatives markets dramatically. The company's spokespeople failed to return calls for comment; Born also refused to comment because her law firm now represents several Enron creditors. But observers argue that the CFMA essentially let Enron move forward with its plan to aggressively court derivatives buyers and sellers.
By the end of 2000, a year after the launch of Enron's Web-based trading site EnronOnline, the company's derivatives business had more than quintupled in a single year. Assets increased from $2.2 billion to $12 billion; derivative-related liabilities increased from $1.8 billion to $10.5 billion.
Posted by frosty zoom at 10/09/2008 @ 11:59pm
http://dir.salon.com/story/tech/feature/2002/02/05/
funny_money/print.html
Posted by frosty zoom at 10/09/2008 @ 11:59pm
STATEMENT OF HON. BROOKSLEY BORN, CHAIRPERSON, COMMODITY FUTURES TRADING COMMISSION
Ms. BORN. Thank you, Mr. Chairman and Members of the committee. I very much appreciate the opportunity to testify concerning the study of the President's Working Group on Financial Markets entitled, ''Hedge Funds, Leverage, and the Lessons of Long-Term Capital Management,'' which was transmitted to the Speaker of the House of Representatives last week.
Posted by frosty zoom at 10/10/2008 @ 12:10am
The President's Working Group also agreed that if these measures prove to be inadequate, serious consideration should be given to the direct regulation of hedge funds and other highly leveraged institutions, including such measures as capital requirements. In addition, direct regulation of derivatives dealers should be considered and indeed is currently being studied by the President's Working Group in the context of its ongoing study on the over-the-counter derivatives market.
Posted by frosty zoom at 10/10/2008 @ 12:10am
Ms. BORN. Well, to the extent that a hedge fund invests in futures contracts or option contracts on a futures exchange, they do become commodity pools under our statute, and investors, even though they are very wealthy, are entitled under our rules to certain investor protections. Fraud is forbidden, as is stealing the investor's money, and we have a lot of cases involving fraud by commodity pool operators and conversion of investor funds. We require risk disclosure statements to be provided to investors and potential investors, including the history of a performance of the fund. We require audited financial statements and quarterly assets, and I think that is very useful.
Posted by frosty zoom at 10/10/2008 @ 12:10am
Ms. BORN. Well, the commercial banks are rather closely supervised, I believe. The hedge funds are not, and aspects of investment banks that have the highest leverage and pose the greatest risk are frequently not regulated. I am worried about any large financial services entity in the markets with extremely high leverage, extremely high positions, and particularly about those with extremely high over-the-counter derivatives positions, which LTCM of course had.
Posted by frosty zoom at 10/10/2008 @ 12:10am
Ms. BORN. Well, that is why the recommendation of the Working Group is that there should be quarterly rather than annual reports, and they should be published to the public because not only the regulators need them.
Posted by frosty zoom at 10/10/2008 @ 12:10am
Your Report, your administrative actions and your counsel, the counsel of the Working Group can and will help us immensely. I thank you very much. I welcome the entire panel, particularly those of you who might be testifying for the first time. I think Mr. Gensler is testifying before Congress for the first time. We welcome you. Ms. Nazareth, are you too, and Mr. Parkinson? Oh, you are an old hat. This is your second time. And Ms. Born, you are our veteran.
Welcome back. Thank you.
Chairman LEACH.: Mrs. Roukema.
Posted by frosty zoom at 10/10/2008 @ 12:11am
chairman leach??
the same guy as gramm-leach-bliley?
por favor.
Posted by frosty zoom at 10/10/2008 @ 12:11am
http://commdocs.house.gov/committees/bank/
hba56675.000/hba56675_0.htm
Posted by frosty zoom at 10/10/2008 @ 12:11am
After Elizabeth Dole and other speakers took their turn poking fun at the younger half of one of Washington's best-known power couples, White House spokesman Mike McCurry came to the podium and addressed Greenspan. "Mr. Chairman, I have a suggestion," he said. "Put that text down, look the committee in the eye and say, 'Nah, nah, I told you so.'"
Greenspan laughed as much as anyone in the celebrity-studded ballroom.
http://www.cnn.com/ALLPOLITICS/1997/11/03/time/greenspan.html
Posted by frosty zoom at 10/10/2008 @ 12:15am
Commodity Futures Trading Commission. Brooksley Born, Chairman of the CFTC, testified to the lack of transparency to regulators in the OTC market, in which LTCM dealt. Born noted that transparency significantly contributes to the "futures markets" being the "most trusted in the world," and that the CFTC has previously raised the need for recordkeeping and reporting requirements and for disclosure by OTC derivatives dealers to their customers.
http://www.wilmerhale.com/files/Publication/
6a289a59-73ba-4bb7-a1e5-2b2232d858d2/
Presentation/PublicationAttachment/d40c0566-
7cfc-4381-aa61-d30812777594/Markets.PDF
Posted by frosty zoom at 10/10/2008 @ 12:18am
Ms. BORN. I certainly will not do so. Mr. Chairman and Members of the committee, thank you very much for providing me with an opportunity to testify concerning Long-Term Capital Management and its financial difficulties. This episode should serve as a wake-up call about the unknown risk in the over-the-counter derivatives market and the risks that that might pose to the U.S. economy and to financial stability around the world. It has highlighted an immediate and pressing need to address whether there are unacceptable regulatory gaps relating to hedge funds and other large OTC derivatives market participants.
http://commdocs.house.gov/committees/bank/hba51526.000/hba51526_0.htm
Ms. BORN. I think we need to study how to control what seems to be out-of-control excessive lending in this market. Capital requirements are a way to do it. Margin requirements are a way to do it. I am not sure indeed those are some of the questions posed by our Concept Release, whether net capital, whether requiring internal controls, whether use of value-at-risk models, whether margin requirements are appropriate.
oh, my.....
Posted by frosty zoom at 10/10/2008 @ 12:24am
my head hurts.
Posted by frosty zoom at 10/10/2008 @ 12:25am
Dow tumbles 7%
DOW FALLS BELOW 8,600 FOR FIRST TIME SINCE 2003 - ON THE 1-YEAR ANNIVERSARY OF ITS ALL-TIME HIGH.
Posted by frosty zoom at 10/10/2008 @ 12:46am
Other markets: U.S. light crude oil for November delivery fell $2.36 to settle at $86.59 a barrel on the New York Mercantile Exchange. Prices slipped on continued bets that the slowing global economy will hurt demand.
drill, drill, baby.....
Posted by frosty zoom at 10/10/2008 @ 12:49am
In fact the only upside of all this is that the massive slow-down in economic growth will rapidly cut the growth rates of CO2 emissions. Pollution is tightly linked to the level of economic activity, so that a few years of negative growth would lead to reductions in pollution levels not seen since the 1970s. It seems ironic that the greed of Wall Street may have inadvertently achieved what millions of well intentioned scientists, activists and politicians have failed to achieve – a slowdown in global warming.
http://www.voxeu.org/index.php?q=node/2243
http://www.voxeu.org/files/image/Bloom%20Oct08%20Slide2.JPG
http://www.voxeu.org/files/image/Bloom%20Oct08%20Slide1.JPG
Posted by frosty zoom at 10/10/2008 @ 12:54am
http://www.cepr.org/pubs/PolicyInsights/PolicyInsight25.pdf
Posted by frosty zoom at 10/10/2008 @ 12:59am
I have been reading "Greenspans Fraud" by Ravi Batra. Interesting suff. Check it out.
Posted by chaoszen at 10/10/2008 @ 02:30am
i've been living greenspan's fraud.....
Posted by frosty zoom at 10/10/2008 @ 02:52am
my head hurts.---Posted by frosty zoom at 10/10/2008 @ 12:25am
Think it might have something to do with "running the table" as they say in billiards on this thread?
LOL
Posted by Maskdelta at 10/10/2008 @ 08:44am
Problem number one, we're talking about a woman. And in case you haven't noticed, this country has little respect for women.
(Hillary, Sarah take yo' asses back to where you came from. Bi-otches!!)
Posted by bleedingheart at 10/10/2008 @ 09:15am
spam etc.,
Posted by Maskdelta at 10/10/2008 @ 08:44am
i confess!
very upsetting, the greed...
spam can be cathartic.
Posted by frosty zoom at 10/10/2008 @ 09:42am
Problem number one, we're talking about a woman. And in case you haven't noticed, this country has little respect for women.
(Hillary, Sarah take yo' asses back to where you came from. Bi-otches!!)
Posted by bleedingheart at 10/10/2008 @ 09:15am | ignore this person | warn this person
she's a pit bull!!!
stop pickin' on her you cads!!!
which is it, thinly veiled quackmeister?
Posted by dexter666 at 10/10/2008 @ 10:10am
Problem number one, we're talking about a woman. And in case you haven't noticed, this country has little respect for women.
Posted by bleedingheart at 10/10/2008 @ 09:15am
Sad to say that there probably is alot of truth to this...I can't count how many times my wife comes home from her quarterly business meetings pissed off because the male owners (she's 1 of 6 partners) agreed to a solution to some problem that she had already brought up at the previous meeting, but was ignored or brushed off...she's about ready to go it alone and let her partners flounder.
Posted by usc1 at 10/10/2008 @ 10:25am
Not surprised by the info presented in this article. I'm disappointed but that's par for the course. Once again there was a voice of reason but because the well-connected friends of Greenspan and others would have been affected in the short term, Greenspan decided to go against that reason.Not to mention they interfered with her doing her job to the best of her abilities. Oh well. He'll get his in the end, hopefully. Ms. Born would definitely be on my economic team. Atleast we know she knows what the hell she's talking about.
Posted by k330k at 10/10/2008 @ 10:26am
Posted by frosty zoom at 10/10/2008 @ 09:42am
You went "Rese" on our asses, frosty. Although unlike Rese, you did offer relevant information.
Posted by k330k at 10/10/2008 @ 10:28am
You went "Rese" on our asses, frosty. Although unlike Rese, you did offer relevant information.
Posted by k330k at 10/10/2008 @ 10:28am
i'm quite upset.....
spammarthis
Posted by frosty zoom at 10/10/2008 @ 10:41am
8283.13 -296.06 (-3.45%) Oct 10 10:41am ET
Posted by frosty zoom at 10/10/2008 @ 10:41am
i'm quite upset..... Posted by frosty zoom at 10/10/2008 @ 10:41am
Totally understandable. Spam on, brother.
Posted by k330k at 10/10/2008 @ 10:43am
Criticisms Warren Buffett famously described derivatives bought speculatively as "financial weapons of mass destruction." In Berkshire Hathaway's annual report to shareholders in 2002, he said, "Unless derivatives contracts are collateralized or guaranteed, their ultimate value also depends on the creditworthiness of the counterparties to them. In the meantime, though, before a contract is settled, the counterparties record profits and losses--often huge in amount--in their current earnings statements without so much as a penny changing hands. The range of derivatives contracts is limited only by the imagination of man (or sometimes, so it seems, madmen)." The same report, however, also states that he uses derivatives to hedge, and that some of Berkshire Hathaway's subsidiaries have sold and currently sell derivatives with notional amounts in the tens of billions of dollars.[19] Berkshire Hathaway, with a market capitalization of $196 billion[20], certainly does have enough equity to collateralize or guarantee these contracts.
The market for credit derivatives is now so large, in many instances the amount of credit derivatives outstanding for an individual name is vastly greater than the bonds outstanding. For instance, company X may have $1 billion of outstanding debt and there may be $10 billion of CDS contracts outstanding. If such a company were to default, and recovery is 40 cents on the dollar, then the loss to investors holding the bonds would be $600 million. However the loss to credit default swap sellers would be $6 billion. When the CDS have been made for purely speculative purposes, in addition to spreading risk, credit derivatives can also amplify those risks. If the CDS were being used to hedge, the notional value of such contracts would be expected to
Posted by OneVote at 10/10/2008 @ 10:56am
Criticisms Post Above
Source: Wikipedia...Query: Credit Default Swaps
Posted by OneVote at 10/10/2008 @ 10:59am
This is just unbelievable GD fraud on our financial system. GD Treason!!!!!!!!!!!!!!!!!!!!!!!!!
Posted by OneVote at 10/10/2008 @ 11:01am
Check out who the five senators were that voted against the Phil Gramm amendment in the 2,000 funding bill that deregulated hedge funds, during the last day of the session Christmas eve. Make them head of something. Here are some good names; Kucinich, Kaptur, Sandres. Why does the media insist on turning them into objects to be ridiculed? (i.e. they, the media, has literally objectified these people as nuts or quacks). If I remember correctly the media was drooling all over itself with people like Cabrera and Kudlow, of NBC.
Posted by lachatte at 10/10/2008 @ 11:21am
Posted by Zero at 10/10/2008 @ 1:01pm
KVH, Zero has a point.
Side note: The woman's name is Brooksley Born. Since I don't know the woman, I'll refrain from the ridicule except to say that parents can be very cruel.
Posted by k330k at 10/10/2008 @ 1:31pm
'Approximately $307 billion of the $441 billion in notional exposure on AIGFP's super senior credit default swap portfolio as of June 30, 2008 was written to facilitate regulatory capital relief for financial institutions primarily in Europe. AIG expects that the majority of these transactions will be terminated within the next 9 to 21 months by AIGFP's counterparties when they no longer provide the regulatory capital benefit.'
Source: 10 K Statement 08/2008 AIG
AIGFP - another name for credit default swaps or derivatives. Note that we have an unregulated corporation peddling default insurance many times its ability to pay (kind of like banks get to loan money at ratio of 40:1 against actual deposits)to European banks to "facilitate regulatory capital relief" for said banks. Just unbelievable!
Posted by OneVote at 10/10/2008 @ 1:49pm
I had the same read. My first thought was that the Times piece provided a good historical take on the origination, purpose and use of so-called "derivatives," particularly how the faith of arrogant plutocrats who worship wealth combined with the stupidity of insecure men in Congress to trash the views of a woman lawyer who, long ago in the 1990s, as head of the Commodity Futures Trading Commission, warned about and tried to stop the testosterone-fuled views of conservative Republicans and corporate Democrats who now have destroyed our economy.
An interesting economic story with a gender-based misogynist undercurrent. . . . . So let's forget just trashing Phil Gram. KVH has it right. Rubin and Summers were collaborators, and Summers' subsequent record at Harvard was equally revealing. Let's hope Obama does not let such idiots continue, in their own ways, to "drill, baby, drill."
Posted by tgmnation at 10/10/2008 @ 1:49pm
Voice of reason is always silenced as most people choose to live in an absurd world. Anyone who would dare think otherwise is seen suspect. So here is to the one of the most chaotic times we have seen in our lives! May you get your fill of uncertainty and anxiety, because what will follow will be equally extreme. Chinese regime, anyone?
Posted by diogenes2 at 10/10/2008 @ 1:57pm
Isn't Robert Rubin Obama's Key Economic Adviser? The answer: YES!
Posted by AJH at 10/10/2008 @ 1:58pm
Rubin and Summers are Obama's financial advisers? We are in big trouble! I never heard of Ms. Born, but she seems to have done some good work. We will need a new Secretary of the Treasury! Is she still available?
Posted by P. J. Casey at 10/10/2008 @ 3:21pm
At Harvard Larry Summers insisted that women couldn't (or didn't really want to) do math and science. (My daughter was a science major there during those years.) I am not quick to shout "Sexism!" but it seems highly likely that Ms. Born's warnings were taken less seriously because of her gender and Summers' dismissive attitude toward same.
I hope she's on Obama's economics team. God knows, he'll need all the really smart experienced people he can find, to lead us out of this fiasco.
Posted by bcazden at 10/10/2008 @ 3:43pm
We will need a new Secretary of the Treasury! Is she still available?
Posted by P. J. Casey at 10/10/2008 @ 3:21pm | ignore this person | warn this person
warren buffet.
Posted by dexter666 at 10/10/2008 @ 5:05pm
Is it any wonder............give Goldman Sachs the cover of a commercial bank and then we can bail them out.....nice work Henry - glad taxpayers are being protected.
Morgan Stanley, Goldman May Gain Investment From U.S. Treasury
By Christine Harper
Oct. 11 (Bloomberg) -- Morgan Stanley and Goldman Sachs Group Inc., the biggest independent U.S. investment banks, may reap cash infusions as part of Treasury Secretary Henry Paulson's plan to buy stakes in financial institutions, investors said.
Paulson, in a statement yesterday, said the U.S. will purchase equity in a ``broad array'' of banks and other financial firms to restore market stability and ensure economic growth. The Treasury is working on a ``standardized program that is open to a broad array of financial institutions,'' he said.
Morgan Stanley Chief Executive Officer John Mack, 63, and Goldman Sachs CEO Lloyd Blankfein, 54, failed to regain investor confidence by converting their firms into bank holding companies last month and raising new capital from private investors. Morgan Stanley's stock dropped almost 60 percent this week, while Goldman's fell 29 percent.
``Based on the fact that they're allegedly commercial banks now and are moving that way, I think they're likely to get protection,'' said Benjamin Wallace, an analyst at Grimes & Co. at Westborough, Massachusetts, which manages about $700 million. ``Whatever solution they come up with for the banking industry as a whole will apply to them, because they're no longer special.''
Bloomberg.Com
Posted by OneVote at 10/11/2008 @ 10:03am
http://www.dcbar.org/for_lawyers/resources/legends_in_the_law/born.cfm
Alan Greenspan, Arthur Levitt, and Robert Rubin all said that these questions should not be asked and urged Congress to pass a bill that would forbid the commission from taking any regulatory steps on over-the-counter derivatives. There were no hearings on that bill, but during a congressional conference committee meeting on an appropriations bill, an amendment was added preventing the commission from taking any action on over-the-counter derivatives for six months. This occurred within a month after Long-Term Capital Management's collapse!
Posted by ttr at 10/11/2008 @ 1:28pm
http://www.dcbar.org/for_lawyers/resources/legends_in_the_law/born.cfm
Alan Greenspan, Arthur Levitt, and Robert Rubin all said that these questions should not be asked and urged Congress to pass a bill that would forbid the commission from taking any regulatory steps on over-the-counter derivatives. There were no hearings on that bill, but during a congressional conference committee meeting on an appropriations bill, an amendment was added preventing the commission from taking any action on over-the-counter derivatives for six months. This occurred within a month after Long-Term Capital Management's collapse!
Posted by ttr at 10/11/2008 @ 1:28pm
Ok, now that we know, as if we didn't already, that the Dems and the Reps are two sides of the same coin (which is worth about nothing right now), isn't it time for another "Please, Please Mr. Obama" letter from the Nation?
The last one worked wonders, as we can see, so perhaps Ms. vanden Heuvel, etal would consider one asking Mr. Obama to openly disavow Rubinomics and bring Ms. Born on board. Whatyasay, Nation fans?
Or, you could ask her to "do the right (as opposed to the Right) thing" and support Nader, instead.
Posted by H2O at 10/11/2008 @ 1:42pm
Sorry for the double post... it was not my intention...
Posted by ttr at 10/11/2008 @ 1:44pm
Maybe, too, The Nation should be rueing the day it through its support to Barack Obama, who has the old boys on his team. Maybe, Katrina vanden Heuvel should have shown the independence that she appreciates in her subject by supporting Ralph Nader. Mr Nader predicted the problems with Fannie Mae and Freddie Mac in year 2000.
Posted by goedel at 10/12/2008 @ 7:31pm
Brooksley Born will not make it to Obama's staff - even if she would like that. Obama would have to get rid of all the other advisers, including Robert Rubin, in order for her to be included. She was right; they were wrong. They would resent one another intensely.
No! Not 'arf likeleh!
Posted by goedel at 10/12/2008 @ 7:38pm
why is the liberal press apparently so shocked at all of this financial madness. i'm a recent reader of the nation but a long term reader of the times.
you people are as culpable as these sycophants who sandbagged the whole country. were you guys reporting these little nuiances and changes of law? were you reporting on the possible consequences of the dismanteling of the new deal policies of the FDR era?
i tell you,the wall street journal was reporting this shit almost every day. i used to read the enemies paper every day. the journal championed these day to day destructive economic forces and legislation and most of the time wrote of the opposition to the above.
all of a sudden everyone is outragged at this melt down. the signs were on the wall well before this crisis. if only people would have stayed educated and vigilant. wall street has never had the interest of the common man in its' mind. for many, many years as a union tradesman and now small business owner i have spoke of this meltdown only to be shunned by free marketeer and liberal alike. i will tell you why. the american psyche is one of instant gratification. if you really want to speak of a ny times article speak of the op-ed piece by friedman that talks about the stoics and their warnings about the mob mentality and the tendencies of people to follow the fads of the times. this culture in the US is devoide of any substance and depth of thought or reason. this is the culprit, the lack of reason in the american psyche. we are a sensationalist joe six pack country. that is the damn problem.
Posted by jbone1976 at 10/13/2008 @ 07:20am
Wow, I am so thrilled that Nation and Katrina portrayed this story in this way.
It really is clear that Brooksley Born was assiduous in trying to bring order to derivatives and that the 3 marketeers subverted her in a most ferocious manner.
Not only were they personally intimidating to her, I think overall they were dismissive of her in a way demeaning of all sincere women, and of women government employees in particular.
I think her name is fine and especially charming. She seems like a chubby, cheery woman, a quintessential American Mommy, with 5 children and several grandchildren.
She has been denoted as a Legend of the Bar by DC bar. There is a wonderful interview online.
The scary thing about this, is she was talking about people's losses in the interview and it is dated 2003. This is even before these catastrophic current outcomes, which Rubin and Summers are frantically trying to spin, and bizarrely, Greenspan continues to claim no necessity for regulation.
In the 2003 interview, Ms. Born reveals that it was Wendy Gramm (aha! the smoking female Republican gun) who single handedly made OTC derivatives possible by adopting a regulatory exemption as "virtually the last act as CFTC chair."
My goodness.
Ms. Born was also a lawyer who worked with international clients including representing a Swiss Bank that was the co accused with the Hunt Brothers, a Lebanese cohort of the Saudi royal family and a Brazilian stock manipulator in a famous silver price fixing case, involving price manipulation of silver from $5 to $50. Her clients settled but the Hunts were found liable and went into bankruptcy. Wow.
This is clearly a remarkable American legal giant and great American lady.
Unfortunately, Barack has already genuflected to the architect of ruin.
Posted by MinnieB9 at 10/15/2008 @ 04:50am