--- In FairfieldLife@yahoogroups.com, "Patrick Gillam" <[EMAIL PROTECTED]> wrote: > > New Morning, I have to ask, given the > extensiveness of your views on this > topic - is this your work? A hobby?
Education, parts of my career, reading -- books and lots of mags/journals, CNBC, investments and trading, lots of web meandering and queries, friends. > --- In FairfieldLife@yahoogroups.com, new.morning <no_reply@> wrote: > > > > Yes thats a pretty good synopsis -- and adds some good examples. > > > > A problem, IMO, is that people think in dichotmous black or white > > terms. This or that. All good or all bad. > > > > The crises is not a total regulatory failure -- but neglect in > > carrying out laws on the books (Greenspan) -- and failure to require > > disclosure and transparency for derivatives and hedge funds was a > > colossal legislative failure. The traditional securities markets are > > already heavily regulated. There is not a need for massive new > > regulations there. > > > > The rhetoric of the right and left is at times prone to this black or > > white thinking: all regulation is bad on the right, all regulation is > > good on the left. Or markets are all good, markets are all bad. > > > > Markets are quite powerful and efficient in setting prices and > > allocating resources in "productive" ways. But they are not sufficient > > by themselves in many cases. They do not always produce, by > > themselves, everything that is needed for smooth functioning. Such as > > information and transparency. They don't handle externalities such as > > pollution well. They aren't as efficient in cases of natural > > monopolies such as electric and gas companies -- primarily their > > distribution systems (its inefficient to have competing distribution > > systems, so they are granted monopoly status and then heavily > > regulated.) However, given the strong merits of regulation is some > > areas -- over-regulation is counter productive. We live in > > mixed-states -- not laissez-faire economies. We have for over 100 > > years. The key is correctly fitting sound regulation to specific > > deficiencies in the market. And reassessing and readopting over time. > > Not 100% regulations (aka fascism and authoritarian states) nor > > canning all regulation. > > > > IMO, the genesis of this crises was the Fed. Though structured to be > > somewwhat buffered from political decisions, and full of bright and > > shiny doctorates (a good thing in most regards) -- they have made > > large errors with devastating effects. The solution is not further > > politicalization of the Fed, a freer reign, or abolishment of the Fed. > > How to counter their excesses and errors will be a major regulatory > > issue in the coming years. > > > > > > > > > > And size does matter. Too big to fail is to big to exist. Part of the > > legitimate emerging legislative mandate will be to limit firms size to > > "small enough to fail". There are economies of scale -- and > > competitive advantages to size -- particularly in global markets with > > state-sponsored players. But those efficiencies are overshadowed by > > the costs, direct and indirect, of providing absolute gov't backing to > > private firms that make engage in foolish pattern of errors and > > corporate culture. > > > > Limits on size yield more layers -- more diversity. Diversity is > > generally a good thing. One of the sad outcomes of this crisis is > > that the financial markets are far more concentrated than before. Five > > investment banks gone. B of A -- its scary to think how big they are > > -- given how incompetent they have become at the customer level. The > > assets of Countrywide, AIG Merrill Lynch, Bear Stearns, Lehmans -- and > > soon Wachovia-- all absorbed by bigger players. More consolidation to > > come as more firms fail. (This "solution" will not stop all insolvency). > > > > > > > > --- In FairfieldLife@yahoogroups.com, "Patrick Gillam" <jpgillam@> > > wrote: > > > > > > The New York Times seems to make a > > > straightforward case in a recent > > > editorial aimed squarely at the > > > right's talking points. > > > > > > http://tinyurl.com/49ndpv > > > > > > Don't Blame the New Deal > > > > > > Published: September 27, 2008 > > > > > > "This year's serial bailouts are proof of a colossal regulatory > > > failure. But it is not "the system" that failed, as President Bush, > > > Treasury Secretary Henry Paulson and others who are complicit in the > > > calamity would like Americans to believe. People failed." > > > > > > http://www.nytimes.com/2008/09/28/opinion/28sun1.html?hp > > > > > > > > > > > > --- In FairfieldLife@yahoogroups.com, new.morning wrote: > > > > > > > > --- In FairfieldLife@yahoogroups.com, "authfriend" <jstein@> wrote: > > > > > > > > > > --- In FairfieldLife@yahoogroups.com, "Patrick Gillam" > <jpgillam@> > > > > > wrote: > > > > > > > > > > > > Has anyone read a good discussion of > > > > > > the debate that's shaping up between > > > > > > the right and left regarding the causes > > > > > > of our current credit crisis? The left > > > > > > is saying the problem is a failure of > > > > > > the free market. > > > > > > > > Not a particularly insightful or focused argument, > > > > IMO. The repeal of > > > > the Glass-Stegal act in 1999 allowing commercial and investment > banks > > > > to merge was not a particularly good move -- but the reasoning > > > > "reasonable" -- that US C and I banks could not compete with the > > > > global banks that allowed such consolidation. > > > > > > > > Some on the left claim that the financial markets > > > > are not-regulated -- > > > > that is a laissez-faire love fest. A pipe-dream > > > > rant -- blows against > > > > the empire mentality. Hardly true. > > > > > >
