10/24/2008

Another Ayn Rand Cult Member Recants



WASHINGTON (MarketWatch) -- Financial regulators made "fateful mistakes" that helped drive the global financial system to the brink, said Chris Cox, chairman of the Securities and Exchange Commission, in congressional testimony Thursday. Cox said he and other regulators have learned many lessons, chiefly that "voluntary regulation does not work."
OH REALLY????????????









"Where Have You Been All These Years?" Rep. Cummings


Cox's Nomination In Review

"Cox, nominated on Thursday, has a long record of promoting the agenda of business interests that are a cornerstone of the Republican Party's political and financial support.

A major recipient of contributions from business groups, the accounting profession and Silicon Valley, he has fought against accounting rules that would give less favorable treatment to corporate mergers and executive stock options. Cox - a devoted student of Ayn Rand, the high priestess of unfettered capitalism - opposes taxes on dividends and capital gains."

Cox Last Week ( Now he tells us ) NY Time Opinion by Christopher Cox

THE historic volatility in the financial markets has raised important questions about the lack of meaningful regulation of financial instruments known as credit-default swaps. The $85 billion government rescue last month of the insurance conglomerate American International Group, for example, was needed in large part to protect those who held A.I.G.’s credit-default swaps and risked crushing losses if those instruments weren’t honored.

A.I.G. had issued $440 billion in credit-default swaps — which are like insurance contracts on bonds and other assets that are meant to pay off if those assets default. But as markdowns on A.I.G.’s investments in subprime mortgages led to downgrades in its credit ratings, the holders of the credit-default swaps demanded more collateral, which A.I.G. could not provide.

As large as A.I.G.’s swaps exposure was, it represented only 0.8 percent of the $55 trillion in credit-default swaps outstanding — this total market is more than the gross domestic product of all nations on earth combined.

Yet despite its enormous size, the credit-default swaps market has operated in the shadows. There is no public disclosure nor any legal requirement for these contracts to be reported to the Securities and Exchange Commission or any other agency. So government regulators have had no way to assess how much risk is in the system, whether credit-default swaps have been accurately valued or honestly traded, and when people issuing and trading them have taken on risk that threatens others.

10 comments:

Greenspawn said...

All this in interesting, but the key issue of the election hinges on whether or not Joe The Plunger will get a tax cut under the Obama plan.

Goodness, we wouldn't want to be distributing the wealth around. That is like...a progressive tax system that's been in place for 95 years.

Excuse me, I brought up a fact in a discussion on politics.

Warden BooFay said...

Greenspan,

It's ok to talk about politics now that you've contributed to toppling the global economy. After all, one needs to have something to do in one's senile retirement years. Perhaps taking up Spiritualism and channeling the spirit of Ayn Rand would make a good hobby. Oh, but wait, you're already done that your entire professional career. Never mind.
I'm sure you have a few (golden parachute )CEO friends who may go against Ayn's mortal sin of being altruistic, and might give you a lending hand paying the nursing home bill. But then again, They F'ed millions of other out of their retirement savings, so why should you be any different. Maybe fiddling while the globe burns would be a more appropriate retirement activity.

Richard said...

Greenspan completely ceased to subscribe to Ayn Rand's principles the moment he accepted a position at the Fed. He himself had, properly, opposed the existence of the Fed in his article in Rand's collection of essays titled, "Capitalism: The Unknown Ideal". That ideal is still largely unknown, or viciously ignored, by those who claim the financial crisis is a consequence of laissez-faire capitalism The financial industry is distorted by legislation (CRA ratings), fiat money from Greenspan's Fed, and over 50,000(!!) other regulations.

The political and economic ignorance of those who know better is no less despicable than a modern doctor reverting to amputation without anesthetic or antibiotics, and chanting to save appendicitis sufferers.

Anonymous Warden BooFay said...

Richard,

I don't have time for a lengthy comment here, but I'd love to hear how you can reconcile you love of Ayn Rand's philosophy that sees altruism a horrid sin, and you're interest in the Bible as stated in your profile.
The bare fact is laissez-faire capitalism is a disastrous failure today as it was at the onset of the last depression. Even Greenspan and Cox are having their eyes opened while you blather on in some Objectivist La La land.

Dr. Pepper said...

Regulations on the financial markets only makes sense. Financial markets provide the grease the keeps the production and distribtuion entities of capitalism going. The "capital" in capitalism refers to the means of product and distribution. Turning the financial markets into a three-card monty game of voodoo economic hucksterism without over sight has created a catasthrophy of global scale.

"Free market" economics has gained such a popular foothold because it is simple -- like the Laffer Curve -- and easy for the McIdiots to latch on too. Keep in mind that politics in America hasn't evolved into responsible, informed selection process. It's pretty much a marketing campaign dangerously similar to picking Pepsi or Coke.

Richard said...

Well, wb, you hardly read my profile with reasonable care. The bottom line of my profile says:

" Despicable books: Voltaire's Bastards, Silent Spring, Handmaiden's Tale, Bible"

You, and dr.pepper, seem to dismiss MASSIVE regulation in the financial markets as if the markets were still laissez-faire. So there you both are, staring at a white sheet of paper and calling it black. 50,000 regulations distorting the thing that matters most in the economy, capital.

It is that kind of thoughtlessness, and inability, or refusal, to read effectively, that caused this mess.

Warden BooFay said...

Yes Richard you are correct as all objectivists always are. I didn't read your profile thoroughly. Of, course that may jive with the fact that I said I had little time to respond. But who cares about facts when you can make up your own.
Hey, I'm glad you are at least consistent. Know I can have no qualms about dismissing you and your fruitcake "Objectivist" philosophy.
Thanks for the clarification, and good luck with any unregulated crap you may be holding in your portfolio. It looks like you're gonna need it.
More deregulation, that's what we need. (What an idiot!)

Richard said...

Defending your mistakes by repeating them is precisely the same methodology —of ignoring facts [50,000 regs wb, think!] & further expanding government regulations— that caused the crisis. Of course, when politicians have run out of arguments they are reduced to name calling... "it's the greedy, irresponsible CEOs, not us officials, because we work for the public good". Then you all roll over like good little puppies and believe them.

After all, businessmen, good and bad alike, are the modern equivalent of yesterday's nigger. They are the target that same kind of mindless bigotry, but this time it is against any who make a profit, even as those bigots ignore the fact that their paycheck is their profit!.

Warden BooFay said...

Give me a break Richard. You must have Jason Lewis cemented on your radio dial. This guy recently claimed, ( in much more eloquent terms than you I might add ) that the ultra rich are a new minority that who are being discriminated against. Who is their right mind could possibly swallow this. Should we start instituting affirmative action for CEOs earning hundreds of millions of dollar a year? I forgot, with the bailout WE JUST DID!

Anonymous said...

The more I listen to and think about what these anti-regulation, anti-tax people say, the more I want to say lets eliminate all regulation and all taxes. Evidently that would solve all the issues.

This financial crisis and bailout has taught me one thing. I no longer have problem with sports figures getting paid millions to hit a baseball. At least you can see what they do and what they do is actually honest.