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Oh Please! Wasn't it the repeal of the Glass-Steagall Act which allowed these Wall Street Firms to simultaneously act as hedge funds and as you would put it, pu
by euroclydon 16y ago
Oh Please! Wasn't it the repeal of the Glass-Steagall Act which allowed these Wall Street Firms to simultaneously act as hedge funds and as you would put it, purveyors of "good pricing information?"
Faced with the choice between making a few dollars providing pricing information, or manipulating that information (and sometimes the markets themselves) in order to make big-time money, they chose the latter.
- hga 16y agoNo. Glass-Steagall prevented bank holding companies from holding other financial companies ... and I'm not aware of many of the former causing large problems (Citicorp, yes, but that three time loser should have been put down a long time ago). Of course many bank holding companies that were holding subprime toxic instruments as capital got slagged, but that's a very different problem. In fact, if what you wished were true, the rescues of the surviving investment banks, American Express, CIT Group (big middle market financing company) and General Motors Acceptance Corporation would have been impossible (or at least would have had to proceed differently). The government's solution was for them to become bank holding companies. Two investment banks, Bear Sterns and Merrill Lynch, were rescued by having bank holding companies buy them (JPMorgan Chase and Bank of America, the latter in the end at virtual gunpoint).