FRONTLINE now, WARNING!

[elleng]

CFTC/Brooksley Born, disaster! On PBS now!

[elleng]

1. Greenspan refused to speak to Frontline at all!

[virgogal]

2. It was on at 9:00 PM here in Boston.

[Lyric]

3. What are you guys talking about?

?

[supernova]

4. Frontline is doing a doc

on the financial meltdown.

I had company, so I'll watch it online later.

[Sebass1271]

5. Iam watching.. it all happened under bill clinton's watch

how disappointing.. really.. i can't believe he overlooked these things being cooked against the american people. He didn't do anything!! Anything!!! : ((((Yjod <[[br />
This poor lady, i didn't want to be in her shoes. She was mistreated, accused and persecuted until she resigned from her post.

[Xipe Totec]

6. And George watched it happen for 8 years and did diddly/squat n/t

[elleng]

7. MORE than 'this poor lady.'

This poor nation/economy/world.

[malaise]

8. Rethugs controlled the Congress n/t

[elleng]

9. Unfortunately, dems went along with 'rethugs.'

[malaise]

12. True

and Obama still has the enablers in high places.

[peacetalksforall]

27. It seems knowledge of how the deriatives worked were super secret. You can give

Clinton a little leeway knowing that they may have fleeced him on the truth - the one of a few Presidents who had the brain power to follow them if they did let him share in that knowledge.

But he bowed to them when he allowed Born to lose her position and the country to lose the Agency - could you call it an oversite Agency? I think so.

Not good. Horrible.

And now Obama.

Those MEN were traitors to the world. They thought they were so clever. Is Obama joining them or is he truly trying to reverse descention to the bottom and a cleansing?

I think that those who say the Federal Reserve is running our lives with the help of central people from the banks and investment companies. They are the President acting in a direct line from the barons.\

The ignorant me thinks what I gleaned points on one direction - ponzi sceme. A mega triple atom bomb size ponzi scheme.

Madoff was a fall guy. Disperse attention. Will they come up with another one in light of what Born and others are saying - we're going to have another one.

They need 100 more hours to cover the rest of it - going backwards and when the other shoe drops if it's going to.

[FormerDittoHead]

46. It wasn't a secret after that one crashed. Yet NOTHING was done and nothing REMAINS DONE.

I don't know how interesting something so dry could have been made, but in the end she was right.

The thing which is MISSING FROM TODAY'S NARRATIVE, however, is that lack of regulation leads to disaster.

I really fear that we're heading, RIGHT NOW, toward another one, and they just figure we'll bail them out again.

But it's too 'complicated' for people to get angry. Hell, people are literally dying for lack of health care, and the ONLY people who are marching are those given their marching orders by Fox. (hey, where's OUR march?)

Even after the current exec compensation 'scandal' blows over - NOT A WORD about regulating these things.

Capitalism, in terms of the reserve banking system, is kind of a ponzi scheme. But this is bald face gambling, and these free market "survivors" (what those who got OUR money think of themselves) haven't learned a damn thing either.

[slipslidingaway]

49. "...Madoff was a fall guy. Disperse attention..." Agreed! n/t

[WhiteTara]

50. wasn't his veto overturned?...Phil Graham

shoved that down our throats.

[Karmadillo]

10. At least none of those guys will ever have influence in government again. What is that loser Summers

doing today? On the unemployment line? Who knows?

[Pavulon]

11. ha, Lawrence Summers, President Obama's top economic adviser....

sad in many ways.

[elleng]

13. Tragic more than sad.

Prez hoping we'd get jobs out of his/their stimulus.

[Sebass1271]

15. Summers now is economic adviser to P. Obama, however

it was said on frontline that he now believes in Strong regulations to the financial market. He drafted or created a regulatory book to be implemented but it has stalled in washington due to strong pressure against it from guess who? The financial markets!!

P. Obama MUST do something and pass strong regulations before his term is up. He must do this or a future financial meltdown will happen again.

[Sebass1271]

16. Summers now is economic adviser to P. Obama, however

it was said on frontline that he now believes in Strong regulations to the financial market. He drafted or created a regulatory book to be implemented but it has stalled in washington due to strong pressure against it from guess who? The financial markets!!

P. Obama MUST do something and pass strong regulations before his term is up. He must do this or a future financial meltdown will happen again.

[Ilsa]

47. Robert Rubin went to CitiBank. But Geithner was part of the team

that wanted no reg of the commodities futures market, but I think he's changed his tune also, like Summers.

[elleng]

14. LEVITT says he could have made a difference,

as SEC chair presumably.

[Sebass1271]

17. He said, if he knew Borns well.. which he didnt', and he was

"advised poorly" by the powers that be back then. That is what I understood.

[slipslidingaway]

18. knr - great show. What I found ironic is when they showed Obama saying...

that the regulators had no power to oversee these transactions, when they actually did have power.

Until a few people, including Larry Summers, took that power away.

Now Summers will help regulate OTC derivatives???

[Karmadillo]

19. Interesting public servants like Summers and Geithner didn't want to defend their actions on camera.

Not very transparent-like, if you ask me.

[BeHereNow]

20. We really should combine this thread with SSA's...

It would be easier to follow all the discussion.
Just a suggestion-
BHN

[elleng]

22. SSA's?

Don't understand.

[BeHereNow]

24. SlipSlidingAway...

Started a thread about it yesterday-
That's the thread that I'm following right now.
Here:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=6814050&mesg_id=6814050
37 rec
BHN

[slipslidingaway]

25. She meant my thread, but actually I was going to suggest the opposite...

since my thread was from yesterday.

Link to yesterday's thread

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=6814050&mesg_id=6814050

[elleng]

29. Seen this, slip?

I think I alluded to Volcker somewhere in this discussion, or should have:

http://www.nytimes.com/2009/10/21/business/21volcker.html?_r=1&hp

[slipslidingaway]

36. No I had not...thanks, my immediate reaction to this crisis that nobody...

saw coming ??? was that it allowed money and power to be concentrated in fewer hands...and that is not a good thing.

[Uncle Joe]

38. How many times do we have to relearn Volcker's lesson?

Thanks for the link, elleng.

[elleng]

40. It appears that some NEVER learn it,

or just don't want to. Like greenspan/rand. I thought rubin did a good job as clintons t. sec, but a friend said he didn't like rubin. He never told me why.

[BREMPRO]

21. Frontline is consistently the best documentary TV and this was no exception

what i took from it:

Fed Chair Grenspans's libertarian, Ayn Rand influenced ideology of wisdom of markets,(that they should be basically left to work on their own and unregulated), as well as the "wizard" like powers he was worshiped for, and wasn't seriously questioning about (mostly because of the apparently good economy), was at the core of our financial crisis. In hindsight, watching him testify, he relied solely on this LIBERTARIAN IDEOLOGY to defend his policies and did not see the dangers of opaque, unregulated markets because he BELIEVED (did not know, believed),that markets are always right and self correcting. In context it's really amazing to see. Looking back at his earlier speeches he sounds eerily like a teabaggger. There is a stunning point in the documentary just after the financial meltdown, where he admits to Congress that HE WAS WRONG- that his ENTIRE world view about markets was WRONG.

The clubby, mostly male group think of Wall Street and the acceptance of this group think by a congress that relied on wall street players for advise on markets, caused a vigorous push back of Born who identified the danger of unregulated markets for derivatives and swaps nearly a decade ago.

Rubin and Summers (who was Rubin's protege and bulldog) were a part of this clubby group think, who listened to and reflected bankers and wall street players concerns. They warned them that, ironically, her proposed REGULATION could cause a hugh financial meltdown- and they should shut her down asap- which they did. Summers has now realized his mistake and the regulations he and Geitner are proposing now to regulate markets are almost identical to the ones Born proposed a decade ago.

Born is a real hero- she stood up for principle and good common sense against a mountain of powerful players, congressional skepticism, attacks on her credibility, and a conventional wisdom that everything was fine. She was ultimately proven right.

She warns now: As long as these derivatives, swaps, and hedge funds continue to not be properly regulated, it could happen again, and again, until we learn our lesson.

I hope this documentary has an impact on Congress and gets the regulation legislation now being marked up in congress and being fought vigorously by the banks and wall street, to be passed soon.

[elleng]

32. Are they really? If so, thats good, as long as there'll be competent enforcers.

'regulations he and Geitner are proposing now to regulate markets are almost identical to the ones Born proposed a decade ago.'

[Cessna Invesco Palin]

43. Frontline is fantastic as always.

Too bad almost nobody watches the damn thing. It's by far the best news program produced in the US.

[slipslidingaway]

23. What Ought to Be Done Now...

just a few snips, much more at link.

http://www.pbs.org/wgbh/pages/frontline/warning/themes/ought.html

Blythe Masters
CFO, JPMorgan; in 1997, she was part of a group at JPMorgan who created credit derivatives

"...If you are actively engaged in the derivative market, if your activity is above a certain level or size or significance, then you must be subject to oversight by the following regulator and subject to the following capital requirements. That is the type of approach that we need to develop. …

… Could the over-the-counter derivative market actually operate if there was transparency, if there were exchanges, if everybody knew what everybody else was doing nowadays?

… Yes, absolutely. The over-the-counter derivative markets can exist with transparency. The biggest, most transparent market in the world is the market for U.S. government securities, is an over-the-counter market, just for the record. And there is no inherent conflict between having a degree of transparency and the ability of those markets to function.

One of the important features of over-the-counter derivatives is they are not standardized to the point that you have a one-size-fits-all approach. You need a one-size-fits-all approach to trade something on an exchange.

So, the question is, can you have non-exchange-traded activity that is still sufficiently transparent to address the regulatory and systemic risk issues? And the answer to that is yes. There are a number of tools for achieving that. One is the use of central clearing for those products which are sufficiently standardized to be amenable to that. And the other is regulatory reporting. You put in place a framework … that says your activity will be transparent to a regulator that is tasked with the management of systemic risk. Then you have the transparency that you need from a regulatory point of view to know whether there's someone out there that has accumulated an undue quantity of risk without the adequate capitalization. …

By and large, there's already a tremendous amount of price transparency in the over-the-counter derivative markets. It's not something that the man on the street would access, but it is something that institutional investors and market participants have plenty of visibility around..."


Roger Lowenstein
Author, When Genius Failed


"...Where would those decisions reside? At a sort of super-powered Federal Reserve?

One proposal … is to limit derivatives to exchange-traded contracts, and then if someone exchanged, the exchange and its regulator has to approve that. So if someone comes out and says, "I want a new contract where we can gamble on companies going bankrupt," some worry, well, maybe that's not such a great idea. You laugh, but that's what we have. It's called the credit default swap market. Maybe that's not a great idea.

Bob Shiller wants a housing futures market. So is it necessarily a good idea to allow people to speculate on the price of center-hall Colonials in Indianapolis so that, you know, oil traders lose money and they got to get out of something, suddenly housing markets crash.

Actual liquidity in trading is not always a good thing. It's a very hard thing for people to grasp. But we had enough capital raised in this country, enough stock sold, enough capital raised before we ever had stock index futures, before people could trade a million shares in 500 different companies in a second. In those days people had to take it and make an individual decision about it: "Do I want the stock? Do I not want the stock?"

And now we have this great innovation so that people can sell zillions of shares without thinking about any them. Well, does that sound smart to you? It doesn't to me."

[CoffeeCat]

26. Brooksley Born predicts further economic meltdown...

She called it before--when NO ONE called it and when it was horrendously
unpopular to even suggest that our booming economy was a house of cards.

She called it. And she's calling it again.

The banksters are still operating in an environment where there is no regulation
on OTC derivatives.

What about all of the toxic assets that are still spread across the financial industry?
The banks were supposed to use TARP money to purchase those things and make them go
away. That never happened. All of that junk is still out there.

We're headed in the same direction as we were before the first collapse. No one wants to
believe it though.

Born has demonstrated that she's got the bona fides to understand the markets and the economy.
I'd believer her---first in her class at Stanford Law, first woman president of Stanford Law
Review and gutsy trailblazer who stood up to bullies Greenspan, Rubin and Summers--before I'd
believe those corrupt bastards. They now admit they were wrong and that she was right.

She's calling another meltdown again? So...what are we doing about it?

[elleng]

28. Right, and here's a NEW one:

Volcker’s Voice Fails to Sell a Bank Strategy.

http://www.nytimes.com/2009/10/21/business/21volcker.html?_r=1&hp

Excellent timing, BAD NEWS.

[Ilsa]

45. I think they said over $500 TRILLION left in derivatives. Hopefully, Obama

will get the industry regulated and give some power back to the CFTC.

That woman is my hero! She's a real patriot, a brave woman.

Greenspan finally had to admit to Congress that his worldview of no regulation doesn't work in the real world. That was mildly satisfying. Too bad Ayn Rand isn't around to take some shit.

[nc4bo]

53. $500 TRILLION??!!

Sweet Baby Jesus. Deep.

[Ilsa]

54. Yes, half a quadrillion. Really. It got so big because it doesn't have to be

presented anywhere as a contingent liability on a balance sheet, IIRC.

[AnotherDreamWeaver]

30. I heard on the radio yesterday this was coming up, but I have no TV

Will there be a transcript?

[elleng]

31. Don't know about transcript, but may be available on line.

[BREMPRO]

34. you can watch it online anytime here

http://www.pbs.org/wgbh/pages/frontline/warning/

[slipslidingaway]

37. There should be a transcript in about 7 days and there are interviews...

posted on the site to read now.

http://www.pbs.org/wgbh/pages/frontline/warning/

[AnotherDreamWeaver]

44. Thank you, I'll bookmark that and check back in.

[slipslidingaway]

48. You're welcome and if I remember I'll post the transcript when...

available for those who want to read it.

:)

[Karmadillo]

33. Kick

nt

[JSK]

35. Stunning

A MUST-SEE

[slipslidingaway]

39. Why No Hearings Paulson, Geithner, Bernanke Gave Away OUR $$ With No Strings Attached?? - Ratigan

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=385&topic_id=391900&mesg_id=391900

[elleng]

41. Lets see, slip.

Remember that Brooksley's been named to a committee to study such, right? Not holding my breath.

[slipslidingaway]

42. True, not holding my breath either. Honestly I would rather have her...

involved in financial reform of derivatives, Ratigan says what they approved in the House on Friday is a "false victory for America."

3:30 minute video

http://www.msnbc.msn.com/id/22425001/vp/33343788

[slipslidingaway]

51. FWIW ... Blame It All On Ayn Rand

http://markettalk.newswires-americas.com/?p=5631

Some interesting comments as well.

[Doremus]

52. Stunning. It almost makes you wonder why we even bother with elections. nt

[freethought]

55. This was INCREDIBLE!

FRONTLINE DOES IT AGAIN! The investigative reporting on Frontline is second to none.

I had never even heard of Brooksley Born until I watched this epi of Frontline. This woman is a truly unsung hero. And now, I fear, a prophet who will be proven right more than once.

I highly recommend that fellow DUers watch this particular Frontline expose.

[Bryn]

56. You mean stuff I use on my pets for fleas/ticks?

[slipslidingaway]

57. Bill Moyers with William Black ...

April 3, 2009

"William K. Black suspects that it was more than greed and incompetence that brought down the U.S. financial sector and plunged the economy in recession — it was fraud. And he would know. When it comes to financial shenanigans, William K. Black, the former senior regulator who cracked down on banks during the savings and loan crisis of the 1980s, has seen pretty much everything..."


http://www.pbs.org/moyers/journal/04032009/transcript1.html

"WILLIAM K. BLACK: There were two really big things, under the Clinton administration. One, they got rid of the law that came out of the real-world disasters of the Great Depression. We learned a lot of things in the Great Depression. And one is we had to separate what's called commercial banking from investment banking. That's the Glass-Steagall law. But we thought we were much smarter, supposedly. So we got rid of that law, and that was bipartisan. And the other thing is we passed a law, because there was a very good regulator, Brooksley Born, that everybody should know about and probably doesn't. She tried to do the right thing to regulate one of these exotic derivatives that you're talking about. We call them C.D.F.S. And Summers, Rubin, and Phil Gramm came together to say not only will we block this particular regulation. We will pass a law that says you can't regulate. And it's this type of derivative that is most involved in the AIG scandal. AIG all by itself, cost the same as the entire Savings and Loan debacle.

BILL MOYERS: What did AIG contribute? What did they do wrong?

WILLIAM K. BLACK: They made bad loans. Their type of loan was to sell a guarantee, right? And they charged a lot of fees up front. So, they booked a lot of income. Paid enormous bonuses. The bonuses we're thinking about now, they're much smaller than these bonuses that were also the product of accounting fraud. And they got very, very rich. But, of course, then they had guaranteed this toxic waste. These liars' loans. Well, we've just gone through why those toxic waste, those liars' loans, are going to have enormous losses. And so, you have to pay the guarantee on those enormous losses. And you go bankrupt. Except that you don't in the modern world, because you've come to the United States, and the taxpayers play the fool. Under Secretary Geithner and under Secretary Paulson before him... we took $5 billion dollars, for example, in U.S. taxpayer money. And sent it to a huge Swiss Bank called UBS. At the same time that that bank was defrauding the taxpayers of America. And we were bringing a criminal case against them. We eventually get them to pay a $780 million fine, but wait, we gave them $5 billion. So, the taxpayers of America paid the fine of a Swiss Bank. And why are we bailing out somebody who that is defrauding us? ..."