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Tue Jun 19, 2012, 10:56 AM

Really surprising, Arthur Levitt on Bloomberg today said they should have never gotten rid of Glass-

Steagall and regrets his support for repealing it

Usually you hear just the opposite on these financial shows. He also criticized jamie dimon for trashing the Volker Plan

Mostly you hear the mutual admiration society how jamie dimon is the second coming

This was refreshing to hear someone discuss the problems and what led to them. Levitt's main argument is that too big to fail is a major problem

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Response to still_one (Original post)

Tue Jun 19, 2012, 11:05 AM

1. Well better late than never, I guess...

...although effectively it isn't better, since Glass-Steagall is now long dead and unlikely to ever be revived.

It always amazes me that these people were able to gut regulations, arguing that the financial would "regulate itself more effectively". Hah.

Human nature is human nature. When put in charge of vast sums of money, and the ability to play risky games with other people's money, and the knowledge that any large failure will be covered by the public, while any gains will be pocketed, guess what? People will go ahead and play risky games with the money. Gosh, who woulda thunk.

The worst part to me, is that those who failed, and whose failures have resulted in widespread misery here and abroad, are rolling in money. They still got their "performance" bonuses, they still have their homes in the Hamptons, they still eat their gilt-laced desserts for $1000 a pop, and they still dictate financial policy to the rest of us.

Bastards.

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Response to ljm2002 (Reply #1)

Tue Jun 19, 2012, 11:12 AM

3. That is pretty much what he said also, though he did say Europe was trying to bring their version

back, but the amount of damage caused by its repeal, and the damn revisionists who parade across these financial shows day in and day out, saying it had nothing to do with the financial crisis, are so full of hog wash

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Response to still_one (Original post)

Tue Jun 19, 2012, 11:12 AM

2. The systematic risk is because the entire financial system is tied together through counterparties.

 

Moreover the dangers lie in Europe which we can't regulate.

Does Glass Steagall fix this problem of exposure to European banks?

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Response to dkf (Reply #2)

Tue Jun 19, 2012, 11:13 AM

4. no, but Levitt did say the Europeans are trying to bring a version of Glass Steagal there. It also

incorporate too big to fail, which would prevent one institution from bringing everything else down

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Response to still_one (Reply #4)

Tue Jun 19, 2012, 11:25 AM

5. Haha that makes me lol.

 

They don't even want to stress test their banks much less impose stricter capital ratios and he is getting to installation of Glass Steagall like laws?

I'll believe it when I see it.

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Response to still_one (Original post)

Tue Jun 19, 2012, 11:59 AM

6. Banks should be banks and investment firms should be investment firms. It's a simple equation.

 

The current situation reminds me of a "Beverly Hillbillies" episode - the one where Jed wants to see all of his money.

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