Whatever Happened To Limits On Leverage -- Dylan Ratigan Destroys Christina Romer (Must See Video)
Awesome short clip. Runs 2 minutes.
Make sure to read this story from the NY Times on Henry Paulson's role in the SEC rule change (2004) that allowed leverage to expand from 12:1 to 100:1 for only the 5 largest investment banks.
It is the single most important piece to understanding the financial crisis. And it is also the event most ignored by CNBC and the rest of the mainstream news media.
From the New York Times:
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The clip is from last year, the week before Ratigan launched his own show. The guest is Dr. Christina Romer -- a Keynesian academic who advocates stealing from your children to keep Democrats in power.
And guess what, after an hour of research, I can find no leverage limits in the financial reform bill passed by Congress and signed by Obama.
2200 pages of FinReg, and no discernible limits on leverage. Hank would be proud.
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Transcript
RATIGAN: Yeah, I’ll jump in right there and say, uh, Christina, that is fantastic, that is great news, that you’re going to leave risk with those who decide to take the risk in the first place. Can you give me any sense of what the capital requirement will be? In other words, setting a new capital requirement is – sounds great, but again, for a market that was once thought to be highly levered when I borrowed five or six dollars for every dollar that was out there, and even in the peak of the eighties’ takeover boom we were at ten-to-one, we allowed this marketplace to go – in some cases to go forty-, sixty-, even a hundred-to-one in some cases. I’m curious as to what you believe – what your agency believes fair leverage is.
CHRISTINA ROMER: You know, I think the crucial thing is, that is a topic which is going to be worked out, it’s going to be something –
RATIGAN: Well, worked out by who, though? That’s – my concern is, because I know that the financial lobby has exploded over the past couple of months into Washington D.C., and my concern is that the size of that leverage will be set by the same people who set it last time, one of which was Hank Paulson, who was at the time the CEO of Goldman Sachs, and went on to be the Treasury Secretary, and then he went on to be able to have a secret meeting where he gave out, you know, a few hundred billion of the taxpayer’s dollars behind closed doors. I’m curious what the new process of setting leverage will be.
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Ratigan: "The conflict of interest is intact, the leverage is still there, and too big to fail still exists; It won’t stop the bonuses, and it won’t create jobs." (VIDEO)
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Sep 25, 2010 at 8:57 AM
Reader Comments (18)
http://www.youtube.com/watch?v=1r-pHrLoJDo
http://www.youtube.com/watch?v=UboBAULuuks
It can't be...
http://www.youtube.com/watch?v=f_otKlgDhFs
Perhaps you can short circuit the issue with a summary.
I forgot to mention the most salient feature of This Week's Corpses, which is they're so fucking boring.
I first read and saw Krauthammer decades ago. I clicked your video link, and now he's speech-impaired, even though he looks exactly the same as he did during Ronald Reagan's first term.
I can't watch him now because he's like something out of the House of Usher or the Picture of Dorian Gray.
Perhaps you're right about what he's trying to say, but I'm not watching a minute and a half of that freahshow because I can't physically do it. It causes me to gag. You've done that before, right?
Thus, I requested a summary from you. If you want to explain, I'm all ears.
I don't think movies will return until we get back to soundtracks like this:
http://www.youtube.com/watch?v=wV0wPBYDQ6Y
or physical acting like this (2:18 without a word):
http://www.youtube.com/watch?v=ZNGe7iK1O-4&feature=related
You'd think based on history that we'd be seeing a kind of golden age in the arts, particularly film, but no, not as far as I know. Was 1969 as good as it gets.
When I was a kid (~Ford through Reagan), there was usually something worthy on the tube, especially in the off-hours. Now I've got 500 channels of pure shit all the time. Deflation... I don't know.
I became a loyal reader the day you posted Wal$treetPro's eruption over John Thain's office commode. By that time I'd lost all patience for 50-cent political spats during the grandest larceny of all time. Your site cuts straight to the only $10 trillion issue in town. Everything else is hackneyed bullshit.
Cheyenne's comments rock??? My God, you two have finally found each other.
Cheyenne writes… No summary of Chuck's ejaculate? Don't blame you.
Cheyenne writes…I first read and saw Krauthammer decades ago. I clicked your video link, and now he's speech-impaired, even though he looks exactly the same as he did during Ronald Reagan's first term. I can't watch him now because he's like something out of the House of Usher or the Picture of Dorian Gray. Perhaps you're right about what he's trying to say, but I'm not watching a minute and a half of that freakshow because I can't physically do it. It causes me to gag. You've done that before, right?
DB writes…your comments rock
What am I missing? He is like Gomp and he does flatter you, maybe that’s all that matters.
DB, are you serious?
i doubt Chey knew that about krauthammer...i didn't know that about him...i'm certainly not looking to make fun of anyone who is disabled...i was making a general comment about Chey's recent appearance here at the site...