60 Trillion dollar ripoff from lack of REGULATION

Wow, you can say that again!

Tom

 

9/30/08

700 Billion Bailout #105

The short is 700 bill, without proper over site up to 58 tril is at risk
S.E.C. Chair: Regulate Credit-Default Swaps Now - Mergers, Acquisitions, Venture Capital, Hedge Funds -- DealBook - New York Times

Christopher Cox, the chairman of the Securities and Exchange Commission, urged Congress on Tuesday to pass a law that would regulate credit-default swaps, stating that the market, with a notional value of $58 trillion, is “ripe for fraud and manipulation.”

 

Very good piece. And to add a bit of black humor to it, the 30-second ad that preceded it when I watched, was for Charles Schwab, encouraging people to invest in the market.

What I note especially was how these very big financial companies sold insurance by another name, thereby side-stepping insurance regulation; and by selling insurance without sufficient funds to pay claims, they committed fraud. These guys were placing bets with money they did not have. If you or I do that in Vegas, a very large man will come and break our kneecaps. But the CEOs of these companies do it, and the federal government buys their debts from them.

 

Now, these people need their hands loped off!!!!

 

This post lead me to this video. How can congress trust McCain after that?

KEATING ECONOMICS: John McCain & The Making of a Financial Crisis.

 

Didn't have a chance to listen to the cbs news spot, but there was an excellent piece on NPR last weekend dealing with this issue, along with talking about how the whole credit system and commercial paper market works:
This American Life

They also did a previous piece a few weeks back about how the CDO market (basically mutual funds built out of residential mortgages, traded as if they were as safe as gov't bonds) drove the subprime mortgage market.
This American Life

Rob

 

I recommend subscribing to the free podcast of This American Life. Far more often than not it's a fascinating show, covering all sorts of topics.

 

Good to know, thanks! I thought these guys presented a lot of information in a very matter of fact yet somewhat amusing format. Was pretty impressed that this sort of journalism still exists in this country

Rob

 

The American life series --- Finally, reporting of facts in the proper context. Makes mainstream news reporting look irrelevant....since it is packaged for attention, not education.

 

Oil is down to $67 a barrel this morning, after hitting a high of $145 a couple of months ago. It's all about speculation--not oil supply-demand. Lack of regulation of oil futures has created the volatility in oil prices you can't have in an economy. Now, with the stock market crash (it is a crash, folks), there is a selloff in oil futures by the hedgefund types who are bailing out of everything for cash. That's what is driving oil prices down so steeply. And also affecting the stock market, as oil stocks plunge.

Does the average American understand all this? No. All they understand is the price of gas and heating oil. And the media tends to obscure issues like this rather than clarify them.

 

well its my fondest hope that thousands of the people who were chiefly responsible for

1)creating, orchestrating and implementing these programs
2) taking profits from these programs

go to jail for the rest of their lives AFTER we get back the money they took from us.

 

They won't go to jail. Nope, never happen.

 

:flypig:

 

Tom

Yep, flying swine long before anybody goes to jail

 

Hi All,

I think the question is going to be if the people that lost the money, but paid themselves will get away with keeping the money. There has to be some sorta restitution paid. Now, its not going to be near even 10% of the money lost, but if they get to keep the money, there will be no power to prevent this from happening all over again in a few decades.

These guys gotta end up living in $1000/month apartments or less (HUD?), or its going to be the government going along with out-right fraud, even if the perpertrators were ignorant it was fraud. At a minimum its profit from an illegal enterprise, and their payments from the illegal enterprise have to come back to the effected parties. Since the government is keeping these banks afloat, its gotta go to the government first. This "No Bonus" stuff just ignores the past decade of malfeasance. If these guys were duped, well maybe they don't go to jail. But they still gotta give back all they can. Stolen money goes back to whom it was stolen from, not the guy on the street that picked up the bag of $100's that fell out of the getaway car.


Priussport,

I had not heard that before. Hmm, so the same mob action that drove oil prices up above the true value, is now driving it down below the true value? Makes sense for the rapid change in street prices though.

 

In most cases no laws were broken, in which case there will be no prosecution or restitution. You can't prosecute someone for being a bad businessman. The board of directors are responsible to the owners, and are supposed to make sure the people running the business are doing what is best for the business and owners, but that is often not the case these days.

Ponzi schemes and other obviously illegal activities are a different story. In these cases you will see prosecution and judgments, but don't hold your breath waiting for restitution. You can get blood out of a turnip. These schmucks have either spent the money, or buried it so deeply that it will never be found.

Tom

 

The current meltdown has deeper roots and is not only the result of actions by a bunch of greedy & incompetent CEOs and CFOs.

[ame=http://en.wikipedia.org/wiki/Petrodollar_warfare]Petrodollar warfare - Wikipedia, the free encyclopedia[/ame]

 

Hi Tom,

But these guys are not turnips. They have a whole bunch of assets. Assets that were acquired in what turned out to be a Ponzi scheme, even if they did not know it was at the time.

 

...and has anybody realized that by sending most of the manufacturing overseas and outsourcing most of the services US ended up having a single manufacturing entity: The US Mint?