Forum Post: What laws did bankers pay to have written?
Posted 12 years ago on Nov. 16, 2011, 10:38 a.m. EST by FawkesNews
(1290)
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When lobbyists have control over politicians, and politicians make laws, the laws will reflect the needs and agenda of the lobbyists.
Totally impressed with the knowledge and information posted/commented here.
I'd like to add to them with a fear of mine, just something I've noticed. Moving typical retirement pensions into stock-based 401k's has and continues to strengthen corrupt banking and investment institutions. As congress debates future of social security we stand at another threshold of these corrupt institutions getting even stronger.
Does the movement contain any educated individuals that can offer some information/advice into alternatives? Personally, I'd prefer to move money into something offered by a smaller bank or credit union with long term growth potential. What are the alternatives and options? Could this movement on mass scale devalue the corrupt ones and put money back on a local non (or less) corrupt scale?
Thank you.
Thank you, but the credit goes to the posters below and the many others who are fervently seeking answers to what seems to be a concerted effort spread out over many years. I believe the hubris of these corrupt individuals is so great that they would strip the pensions of the very military that protect them. Lastly, local banks and credit unions invest "locally". That seems better.
Brooksley Born and the OTC Derivatives Market http://en.wikipedia.org/wiki/Brooksley_Born
Born was appointed to the CFTC on April 15, 1994 by President Bill Clinton. Due to litigation against Bankers Trust Company by Procter and Gamble and other corporate clients, Born and her team at the CFTC sought comments on the regulation of over-the-counter derivatives,[4] a first step in the process of writing CFTC regulations to supplement the existing regulations of the Federal Reserve System, the OCC, and the National Association of Insurance Commissioners. Born was particularly concerned about swaps, financial instruments that are traded over the counter between banks, insurance companies or other funds or companies, and thus have no transparency except to the two counterparties and the counterparties' regulators, if any. CFTC regulation was strenuously opposed by Federal Reserve chairman Alan Greenspan, and by Treasury Secretaries Robert Rubin and Lawrence Summers.[5] On May 7, 1998, former SEC Chairman Arthur Levitt joined Rubin and Greenspan in objecting to the issuance of the CFTC’s concept release. Their response dismissed Born's analysis and focused on the hypothetical possibility that CFTC regulation of swaps and other OTC derivative instruments could create a "legal uncertainty" regarding such financial instruments, hypothetically reducing the value of the instruments. They argued that the imposition of regulatory costs would "stifle financial innovation" and encourage financial capital to transfer its transactions offshore.[9] The disagreement between Born and the Executive Office's top economic policy advisors has been described not only as a classic Washington turf war,[7] but also a war of ideologies,[10] insofar as it is possible to argue that Born's actions were consistent with Keynesian and neoclassical economics while Greenspan, Rubin, Levitt, and Summers consistently espoused Austrian, neoliberal, and neoconservative laissez faire policies.
In 1998, a trillion dollar hedge fund called Long Term Capital Management was near collapse. Using mathematical models to calculating debt risk, LTCM used derivatives to leverage $5 billion into more than $1 trillion, doing business with fifteen of Wall Street's largest financial institutions. The derivative transactions were not regulated, nor were investors able to evaluate LTCM's exposures. Born stated, "I thought that LTCM was exactly what I had been worried about". In the last weekend of September 1998, the President's working group was told that the entire American economy hung in the balance. After intervention by the Federal Reserve, the crisis was averted.[11] In congressional hearings into the crisis, Greenspan acknowledged that language had been introduced into an agriculture bill that would prevent CFTC from regulating the derivatives which were at the center of the crisis that threatened the US economy. U.S. Representative Maurice Hinchey (D-NY) asked "How many more failures do you think we'd have to have before some regulation in this area might be appropriate." In response, Greenspan brushed aside the substance of Born's warnings with the simple assertion that "the degree of supervision of regulation of the over-the-counter derivatives market is quite adequate to maintain a degree of stability in the system".[12] Born's warning that was that there wasn't any regulation of them. Born's chief of staff, Michael Greenberger summed up Greenspan's position this way: "Greenspan didn't believe that fraud was something that needed to be enforced, and he assumed she probably did. And of course, she did." Under heavy pressure from the financial lobby, legislation prohibiting regulation of derivatives by Born's agency was passed by the Congress. Born resigned on June 1, 1999.[11]
The derivatives market continued to grow yearly throughout both terms of George W. Bush's administration. On September 15, 2008, the bankruptcy of Lehman Brothers forced a broad recognition of a financial crisis in both the US and world capital markets. As Lehman Brothers' failure temporarily reduced financial capital's confidence, a number of newspaper articles and television programs suggested that the failure's possible causes included the conflict between the CFTC and the other regulators.[5][13]
Born declined to publicly comment on the unfolding 2008 crisis until March 2009, when she said: "The market grew so enormously, with so little oversight and regulation, that it made the financial crisis much deeper and more pervasive than it otherwise would have been."[7] She also lamented the influence of Wall Street lobbyists on the process and the refusal of regulators to discuss even modest reforms.[7]
Foot note ---------this was also the cause of the 33 billion dollar bailout of AIG
IMO Brooksley Born should be the patron saint of OWS
Wow. You are absolutely a well versed individual. Thank you so much for the homework assignments.
I was so horrified when the banking system collapsed that I did ton of reading to find out exactly what happened. I've been pretty angry ever since and now I seem to have company. Glad to be a part of OWS and thankyou and ask me anything if I don't know I will have fun trying to find out.
It takes so little research to unearth the face of the enemy, it surprises me how few actually take the time to investigate for themselves the source of so much corruption. Your research and the research of those like you will invariably lead to awareness and ultimately dramatic change. I thank you and follow.
I agree there's a ton of info at our local bookstore. One of the obstacles is probably the math, most people hate math and leave finance to the "experts" . Bad idea. One of the things to remember is that wall street depends on faith and credibility There's reason to buy food or shoes but really there's no reason to participate in the markets. If OWS studies up and keeps confronting the likes of Goldman Saks and Morgan Stanley with their indiscretions (or larceny whatever you want to call it) they will have to change.
With American education at such a low point in history, it surprises me not that the math involved is "beyond reach" of many. Faith and credibility in Wall Street are clearly missing in today's market. The more dissemination of such vital information, the more knowledgeable will be the resistance to further schemes against the people of this nation. Please keep up the research as there are many who appreciate it.
You got it !
1999 S-900, The Financial Services Modernization Act.
SEE: The Congress that Crashed America http://home.ptd.net/~aahpat/aandc/congcrash.html
A compilation of current members of Congress who, in 1999, voted for S-900 that repealed Glass-Steagall, expanded use of under-regulated derivatives and reorganized the Community Reinvestment bank by lowering lending standards. There is a link to an extensive time line of the financial deregulation bill and other actions by Congress that irectly led to Wall Street raping America in 2008.
Excellent example. I am sure it is not the only one. :)
Financial Regulation Timeline November 29th, 2008 by selise (most recent update on 4/5/09) @ NetRoots Mass Financial Regulation Timeline http://www.netrootsmass.net/selise/financial-regulation-timeline/
This is the most comprehensive package of the what, how and why of the financial collapse that I have seen. It should be required reading for every MBA student in the modern world. Very dense but ever sentence is packed with vital knowledge. The quotes throughout it from the perpetrators made me want to puke. The galling cynicism, avarice and wanton cynicism could make the staunchest pacifist thankful there is a Second Amendment.
Thank you for the absolutely informative site. I will do my duty and study it. Whenever anyone begins such a study they must be prepared for the most surprising results.