Frontline: The Warning--One Lone Regulator Warned About Derivatives' Dangers
By Heather Thursday Oct 22, 2009 12:00pm
Frontline Oct. 20, 2009. The Warning:
In the midst of the 1990's bull market, one lone regulator warned about derivatives' dangers--and overnight became the enemy of some of the most powerful people in Washington.
You can watch the entire program on line here as well as additional invertiews with Brooksley Born, Gary Gensler, Michael Greenberger, Arthur Levitt and Joseph Stiglitz.
From Frontline's interview with Brooksley Born:
Q: What's the message that you're trying to spread now in the ashes of what happened in 2008 and '09?
BORN: I think we have to close the regulatory gap. ... We cannot afford as a society to go forward with an enormous unregulated market that poses this kind of danger because it’ll happen again if we don't take the appropriate steps. ... We need to take a lesson from the existing futures markets where exchange trading has been safe. As much as possible of the over-the-counter derivatives market should be traded on a regulated derivatives exchange. The transaction should be cleared on a regulated clearinghouse. There should be robust federal regulation of any remaining OTC derivatives market. And personally, I think that remaining market should be limited as much as possible to no more than the customized contracts that are needed for specific businesses to hedge particular business risks. ...
Q: If this moment passes again, the consequences are what from your perspective?
BORN: I think we will have continuing danger from these markets and that we will have repeats of the financial crisis. It may differ in details, but there will be significant financial downturns and disasters attributed to this regulatory gap over and over until we learn from experience.
Frontline also put together a video timeline of the events starting in 1987-today.
I highly recommend watching the entire hour at PBS's site, but here's one more portion I wanted to share here.
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A case study in Hubris!
Chomsky from 1996 Class War, The Attack on Working People here
In actual fact, not at all to minimize the heroic, but doomed fight of Brookesly Born, there were warnings on derivatives from as early as 1979.
The Republicrats are not going to prosecute the crooks or even reign them in, that would involve biting the hand that feeds.
"It is difficult to get a man to understand something when his salary depends on his not understanding it." - Upton Sinclair
“You tell me where a man gits his corn pone, and I'll tell you what his 'pinions are.” - overheard by Mark Twain
house, cars, stuff, and has ZERO DEBT etc it looks grim as hell.
http://www.youtube.com/watch?v=25X2rmYWsaQ
I watched it and it is pretty good with one exception. If you watched the video you would think that Democrats had been in power in both the Presidency and the Congress for the last 16 years. Really, it was rather freaky to jump from 1996 to 2007 as if nothing important had happened in the meantime. They also didn't mention that it was a Republican Congress that stripped her committee of its oversight powers.
It was Clinton's Robert Rubin who was for dismantling Glass Steagall through the euphemistically entitled Financial Services Modernization Act of 1999 , which Clinton signed.
But you are correct, clearly, one should only assign blame to the Republicrats, the Party of Power and Privilege.
I just thought it interesting that they managed to suppress the name Bush from the entire conversation, skipping from Clinton to Obama (and not mentioning that Greenspan was appointed by St. Reagan.) It is as if Repubicans get a free pass for their actions because we expect them to be disgusting.
the documentary shows Greenspan sworn in as Chairman of the Council of Economic Advisers under Ford, making the point that Ayn Rand was there, and then Greenspan apparently just kind of drifted into the chairmanship of the Federal Reserve. The people they showed giving her a hard time in the congressional hearings were Republicans, but I don't think they mentioned the Republicans controlled both houses.
...."Oh-yea...and here is the lady that is goning to tell me what to do...."
.
I was wondering about that too, until you see that one of the main funders at the begining of the show is rightwing maniac extraordinaire, David Koch. These lunatics have gradually infilitrated the PBS funding structure, it's not surprising that it's neutered their programming.
"Washington Week" used to have the most evil lineup of sponsors imaginable - Boeing Military, some oil company, and the mining company front group. I stopped watching but I think they trimmed it down a bit recently.
DOW hit just hit 10,081.31 today.
Investors are encouraged by a good batch of earnings reports. Open your wallets and buy stocks! Gamble your life savings or buy some stocks on your credit card.
The upper 1% own 50% of the stock, the bottom 80% own 4%, do the math, the top 20% own 96% of the stock.
The American economy has been headed for an exclusive basis in fraud every since Nixon's Treasury Secretary George Schultz allowed the first derivative in 1971.
That is where Wall Street is now, a Ponzi scheme.
which is one notch above the 80%. Still can't compete against the big boys.
Big boyz are going to loot every last one of us in one form or another.
Slavery comes to mind.
The DOW 30 has replaced 8 failing stocks/companies in the last five years because they were no longer 'good indicators of the economy'...See GM and AIG, both booted off the DOW
..to the levels it was at in 2003 or so, but in that time the $US has declined in value by about 1/3 WRT the currencies of America's largest trading partners. The Canadian dollar for instance was around 62¢ when Bush the Lesser took office and is now up above 95¢ - and projected to go beyond parity possibly before the end of the calendar year. So in adjusted, international terms the Dow is really still below 7,000. Not that anyone in America gives a flying f#$K about the rest of the world.
This is all despite Bush the Lesser's claim to a strong dollar policy.
Bush favorded a WEAK dollar policy
http://answers.yahoo.com/question/index?qid=2...
And
Forbes calls for reversal of Pres. Bush's weak-dollar policy
http://www.wctrib.com/event/article/id/58986/...
*
It's a gambling casino. They should call it Loss Vegas Street.
Study dark pools, high frequency trading and the like the investment banks are big in.
You can call it a gambling casino if you like, but at least in Vegas there is some sort of regulation.
Wall Street is rigged.
...and take care of the fraudsters...
YupUbetcha
Have you ever been around people who spend 10-12 hours a day at role-playing fantasy video games? Ultima Online, World of Warcraft, etc.? They try to explain how things work in that fantasy world they're addicted to - they stumble and mumble, talk about incomprehensible shit like 'gold farming' and special magical spells like it's life or death, and how hard they had to work to build up their character's stats - and after a while they say "well um its like complicated and stuff you'd have to play for a while to understand it."
How many times have you heard these Wall Street jagoffs give that same explanation? They have no idea what they are doing, no idea what they are buying and selling, and no idea as to how moving numbers from one computer to another makes great piles of cash fall out onto the floor. But the piles keep falling out, so they keep playing their little fantasy game.
"we do not need to police fraudulent activity"
* hey C&L!....show the vid clip where .....at the end they showed Greeny admit that his entire belief system is/was a Fraud
Madoffs famous last words.
Still is
too
woke up on the morning of March 17th, 2008 having made 159 times his money, or roughly $270 million betting Bear Stearns would lose more than half their value in nine days or less?
Anyone can play.
(Right sure you can)
Sounds to me like y'all are a couple of bookies - Reggie Hammond, Trading Places
Timing. It's the essence of comedy.
One of the reasons healthcare insurance has gone up so much is because the insurance companies lost playing the market (including derivatives) - so the tax payer had to bail them out.
AAARRRGGGHHH!
your playing with fire boy!
I really even doubt if they are solvent at this point. It's a mirage.
This clip was one of the most resonant sections of the entire broadcast. greenspan's evil banality about fraud.
Where he says to Ms. Born on their first meeting, 'I suppose you think there should be rules against fraud'...She says 'yes'...he says 'I don't, the market will take care of it'.
More than 10 years ago, this system of fraud has been allowed to metasticize the financial system and totally infect the entire economy of the world.
Where did all the money go last fall? To all the banks we sold all of that totally worthless crap to. All of those 'sophisticated instruments'. It is crap pure and simple
The fact the system is so rigged that this stuff isn't against the law is mindboggeling. greenspan deserves to be in jail.
If the President shields these banksters from accountability for the CRIMES they have committed, it is to the peril of the administration... I think if anything could unravel his Presidency it is the misdeeds of summers, geithner, bernanke, paulsen, rubin and greenspan.
All I've been talking about. I got through to one conservative by describing how bill thought she was boring (ie; no blow job). Barely beat him to the punch, but, it did allow me to get in some of the valid points. Besides the guy is my inspector so I can't afford to piss him off over non job related things.
1. The fact that Summers and Geitner are senior Obama economic people makes me have to re-evaluate Obama as someone who is interested in helping Americans.
2. The game is totally rigged against us. I knew this before but it was a vague understanding. Having seen Greenspan and his cronies take such overt action to protect industry's prerogative of doing whatever they please takes his economic philosophy far beyond laissez faire and into the realm of co-conspirator. He wasn't hands off. He was elbows deep.
is Ms. Born's GENDER.
I'm willing to bet serious money that Rubin, Greenspan and Summers ignored this woman because, well, SHE'S A WOMAN.
She was not given credit for the fact that she is smart and she was RIGHT in her perspective.
She is a FEMALE and in the land of Clintonistas, Reaganites and Bushites, women are to be seen, screwed, screwed over and DISCARDED.
Women are not as intelligent as Greenspan to actually LIE about the damned economy (/snark).
Bottom line - a woman's opinion is to be ignored until it comes back to bite you in the ass.
And Obama has hitched his wagon to Rubin, Summers and the idiot Tim Geithner, who helped orchestrate the Wall Street mess, just so he could BAIL THEIR ASSES OUT.
She threatened their business interests. Everything else is immaterial. That she was a woman merely made it easier to dismiss her.
I have trouble seeing the financial industry and all their cronies and flunkies in govt roll over and lose billions in an unregulated market just because the warning came from a man.
Long before the election ever took place....
(Just a hunch)....
Yew Betcha!
http://www.liveleak.com/view?i=955_1256075716
The Zionist Cabal will thank Greenspan for mission accomplished and for taking the fall. Summer and Geitner are still busy bees fucking up our nation's future. Imagine if you will Obama watching this documentary and then wondering "am I doing the right thing?" keeping these fuckups around and in charge. Obama is such a spineless aimless individual. Barack Obama appointed eleven members of the Trilateral Commission to top level and key positions in his administration within his first ten days in office. Rahmn Emanuel is the sorcerer's apprentice in this debauchery.
I can't imagine having anyone left from the last eight years. Would you come into town as the new sherriff to stop murders and let the murderer out of jail?
This whole thing is just so insane. greenspan and all tyhese people are just insane! How else can you explain someone that has the attitude that you should not try to stop crime the market will work it out! How insane is that? How insane is it that during that time no one would speak the truth, that what they were doing was insane! With everything I have wittnessed in the last nearly 60 years has brought me to the one and only conclusion that can be drawn from it is, republicanism/conservatism is a mental illness! It is the first thing you must realize before dealing with these people!
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