Obama puts a fox in charge of guarding the hen house. (1 Viewer)

[VVextreme]

"In Goldman We Trust".

I think it's my complete lack of trust that has resulted in my opinion.

With that said, yea Goldman and the other big boy companies are some pretty smart mother frickers... They hire the best and the brightest. They are extremely creative. They know the system like the back of their hand as they are always looking for a loophole to make an extra buck.

Who could possibly know their tricks and the way they think better than one of their own? Police do this ALL of the time when they hire former criminals as consultants. Companies hire former thieves to create new theft deterant devices or test security systems. The federal government recruit former hackers, etc. They also hire former counterfeiters to help improve existing policies and catch others. If done properly and you select the right individual, there is not a more effective way to shut down unethical activity.

Even the smartest people in the world won't be as effective unless they have lived and breathed the subject matter like those they wish to regulate and control. This fact is compounded when you consider that those they wish to investigate are just as smart (if not smarter) than the investigators themselves. Madoff was a genius and had to be very politically + socially aware. Unfortunately he was unethical in his selected use of his talents. For crying out loud, the SEC was tipped off and conducted audits of him several times and STILL came up with nothing. The ONLY thing that stopped Madoff was the economy collapsing and his own confession. That's insane.

 

[jpcdolphan]

It helps to have someone who knows all of the tricks in charge of enforcement.

See Kennedy, Joseph.

I think it's "naive" (a word some of y'all like to throw around) to expect to get someone that is not part of the system to help enforce the system.

Decisions like that are how you get situations when fraud goes not only unchecked, but undetected for decades.

Hell, let's get some people in there that can actually notice the fraud, then we'll cross the "I wonder if they'll do something about it" bridge.

 

[SoonerJim]

But I just got out of the Michael Moore movie, which ends on such an upbeat note. Was I fooled?

LOL

 

[VVextreme]

Hell, let's get some people in there that can actually notice the fraud, then we'll cross the "I wonder if they'll do something about it" bridge.

Great point. I was basically trying to say the same thing, but you said it much better and more concise.

I think in a capitalistic society, government should implement only enough regulations that allows transparency. The integrity of a transaction must be maintained. If people are scammed into believing that they are buying something they are not through deceptive practices like fraud, etc, then I believe that's the only place where capitalism fails. Capitalism is all about people buying what they want and allocating resources into producing items that people actually want. If people purchase items they do not want because they believe it to be something else, then that's not capitalism. That's a scam.

We need a guy in charge who can identify these deceptive practices and end them in a manner that is consistant with capitalism.

Also the threat of failure MUST exist in order for capitalism to thrive.

 

[blackadder]

Also the threat of failure MUST exist in order for capitalism to thrive.

Then it follows from that that Goldman and many other institutions should be broken up into smaller pieces, because now they are "too big to fail".

The moral hazard is already in operation. You know no matter what you do, the taxpayer will make you whole. So why not take more risk and spread it as wide as you can? You'll keep your job your house and everything you earn until the bubble burts, so why not do it?

 

[VVextreme]

Then it follows from that that Goldman and many other institutions should be broken up into smaller pieces, because now they are "too big to fail".

The moral hazard is alrady in operation. You knwo no matter what you do, the taxpayer will make you whole. So why not take more risk and spread it as wide as you can?

I posted about this in another thread. I agree if we are to assume they actually were too big to fail. I'm still not convinced they actually were too big to fail however.

 

[Comus]

The last Goldman Treasury Secretary (Paulson) made the kill shot on Lehman when he got the chance; I have a hunch that there may be some *** for tat that would go on. It might make for an interesting SEC chief. Put a man with some motivation to clean up the abuses, and trust me, an ex-Lehman exec would have no problem investigating Goldman, and imposing any necessary punishments. He's got some personal motivation.

Ehh, the process was a little different than some corp 'kill shot'.
Lehman only has the proponents of the 'free market' to blame; someone had to fail.

While publicly supportive of the deal, Treasury Secretary Henry Paulson, a former Wall Street executive with Goldman Sachs, was uncomfortable with government interference in the markets. That summer, he issued a warning to his former colleagues not to expect future government bailouts, saying he was concerned about a legal concept known as moral hazard.

Within months, however, Paulson would witness the virtual collapse of the giant mortgage companies Fannie Mae and Freddie Mac and preside over their takeover by the federal government.

The episode sent shockwaves through the economy as confidence in Wall Street began to evaporate. Within days, in September 2008, another investment bank, Lehman Brothers, was on the brink of collapse. Once again, there were calls for Bernanke and Paulson to bail out the Wall Street giant. But Paulson was under intense political pressure from conservative Republicans in Washington to invoke moral hazard and let the company fail.

 

[Rickysmyhero]

Really?

I think the nationaly naivety is past the point of rationality.

Look, I haven't worked on Wall Street, but I have worked in the bowels of DC. I've seen the stuff of which I rant about up close. I've been to the lunches where the point man who took the revolving door from industry to government is providing privilged access to the decision process to his former colleagues.

Throw out your Civics text book because it's worthless.

I'm prettty sure these record profits for Goldman Sachs in the midst of the "greatest crisis since the Great Depression" are tantamount to insider trading. I mean, Hank Paulson & Neal Kashkari and a host of Goldman alumni and lobbyists were at ground zero for the creation of the TARP and the constantly shifting terms of the bailout.

You really think details didn't flow back to Goldman, their friends and associates, about which assets to buy at which price, which ones would be re-inflated, or at least very strong hints? You think thier decision process didn't factor in how it would effect his kids playmates families?

Whatev.

I mean, you're from Louisiana. Where did the unshakable trust in human nature come from?

http://www.huffingtonpost.com/dylan-ratigan/goldman-sachs-black-magic_b_324095.html

http://www.nytimes.com/2009/10/17/b...ess&adxnnlx=1255798878-nGi9jmzcK4kwnA2lziGxoA

Be prepared to be attack from all angles. You cannot question any of the current administration's decisons on the EE.

 

[bclemms]

http://www.theatlantic.com/doc/200905/imf-advice

Also known as "crony capitalism".

Great read, I don't completely agree with everything but still some extremely well thought out work.

 

[SWJJ]

Horray for Change!!!










oh wait...

 

[FullMonte]

Now why is it such an extreme strawman that seems to get presented...Either a Goldman guy, or someone with no experience whatsoever...It's not as if the Goldman guy is the only intelligent guy with the necessary experience at understanding derivatives available. Sheesh.

So, how would someone get the necessary experience without having ties to big business? The OP stated that the problem with this guy is that he has ties to a big company.

I can't imagine a scenario where someone can get the kind of experience you would want from the head of the SEC, and yet have no friends who work in big business.