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I'm OK with all of the fees as long as they go towards enforcement and regulation. If they exist just to increase the price of entry, then they need to be lower

by scurvy 11y ago

I'm OK with all of the fees as long as they go towards enforcement and regulation. If they exist just to increase the price of entry, then they need to be lowered. 2008 was a great reminder of how a lack of oversight and enforcement can cause huge problems for everyone. I hope we have not already forgot that.

nickff 11y ago
Many of us remain unconvinced of the notion that a "lack of oversight and enforcement" caused the great recession.[1][2][3][4] [1] http://mercatus.org/sites/default/files/GrowthofFinancialRegulations580v2.png http://mercatus.org/sites/default/files/GrowthofFinancialReg... [2] http://dailysignal.com/wp-content/uploads/BL-SEC-budget-chart1.jpg http://dailysignal.com/wp-content/uploads/BL-SEC-budget-char... [3] http://media.economist.com/sites/default/files/imagecache/290-width/images/2012/04/blogs/free-exchange/CFTC%20chart.gif http://media.economist.com/sites/default/files/imagecache/29... [4] http://www.yalelawjournal.org/mht_files/98/SteinwayforWebsite_zo611my2_files/image004.gif http://www.yalelawjournal.org/mht_files/98/SteinwayforWebsit...
yummyfajitas 11y ago
What specific sort of oversight/enforcement/regulation do you believe would have prevented 2008?
- TheOtherHobbes 11y ago
  Glass Steagall did an excellent job - until it started being ignored, and before it was repealed.
  - yummyfajitas 11y ago
    Would preventing WaMu and Countrywide Financial from running prop desks (which they didn't do anyway) have somehow prevented the crisis? Or would preventing Bear Stearns from issuing mortgages (which they didn't do anyway) have somehow prevented them from going bust? Please be specific on what would have happened differently if Glass Steagall were still in force.
    - TheOtherHobbes 11y ago
      With something like GS regulators would have been able to say "Wait, you're doing lots of securitisation? That's not a good idea, is it?" It's not always the specific regulatory details that matter, so much as the culture they create. As long as GS was taken seriously, the culture remained "If you're a bank, don't do really stupid shit just because you think you can make a quick buck." Once it started being eroded the culture became "Wheee!" - and unsurprisingly everything exploded and the wheels came off. IMO anyone who would argue for less regulation after that isn't living at an address in the reliable side of town. The important arguments have to do with quality of oversight and the culture of people who will consistently try to be as irresponsible as they can be if they're not regulated. Regulation is a means to that end, not an end in itself.
      - yummyfajitas 11y ago
        tl;dr; GS wouldn't have done anything, but it might magically change the "culture" and cause regulators to do other unspecified things which would have done something. Um, ok. Also, the main "make a quick buck" bank was Goldman. They did just fine. It was the "make long term safe bets" banks that had problems, e.g. Countrywide, WaMu, Citi. Also, there is nothing inherently wrong with securitization. The underlying problem was the mortgages themselves; securitization merely shifts the risk around. Regulation isn't just a magic lever that you can switch to "more" or "less". Your post is as clueless as a PHB saying "we need more code, lets switch to J2EE so we'll have lots more lines of code!"
        scurvy 11y ago
        Incorrect. GS and worthy oversight would have nipped most of this in the bud. Just look at what these banks had on their balance sheets at the time, and it would make anyone with a modicum of banking background recoil in horror. I'm not trying to sound ageist, but judging from the comments on this thread, it appears as if this generation has not learned from 2008 and is bound to repeat the same mistakes. I went through this before with the S&L crisis, one that was largely the fault of lax oversight. We didn't have another blowup until 2008; I guess that was long enough for everyone to forget the early 80's. Guess it's time to start buying Swiss Francs.
dataker 11y ago
You're not understanding the concept of enforcement and regulation: it is supposed to be a barrier of entry. http://www.cnbc.com/id/100431660 http://www.cnbc.com/id/100431660

by scurvy 11y ago

nickff 11y ago

Many of us remain unconvinced of the notion that a "lack of oversight and enforcement" caused the great recession.[1][2][3][4] [1] http://mercatus.org/sites/default/files/GrowthofFinancialRegulations580v2.png http://mercatus.org/sites/default/files/GrowthofFinancialReg... [2] http://dailysignal.com/wp-content/uploads/BL-SEC-budget-chart1.jpg http://dailysignal.com/wp-content/uploads/BL-SEC-budget-char... [3] http://media.economist.com/sites/default/files/imagecache/290-width/images/2012/04/blogs/free-exchange/CFTC%20chart.gif http://media.economist.com/sites/default/files/imagecache/29... [4] http://www.yalelawjournal.org/mht_files/98/SteinwayforWebsite_zo611my2_files/image004.gif http://www.yalelawjournal.org/mht_files/98/SteinwayforWebsit...

yummyfajitas 11y ago

What specific sort of oversight/enforcement/regulation do you believe would have prevented 2008?

TheOtherHobbes 11y ago
Glass Steagall did an excellent job - until it started being ignored, and before it was repealed.
- yummyfajitas 11y ago
  Would preventing WaMu and Countrywide Financial from running prop desks (which they didn't do anyway) have somehow prevented the crisis? Or would preventing Bear Stearns from issuing mortgages (which they didn't do anyway) have somehow prevented them from going bust? Please be specific on what would have happened differently if Glass Steagall were still in force.
  - TheOtherHobbes 11y ago
    With something like GS regulators would have been able to say "Wait, you're doing lots of securitisation? That's not a good idea, is it?" It's not always the specific regulatory details that matter, so much as the culture they create. As long as GS was taken seriously, the culture remained "If you're a bank, don't do really stupid shit just because you think you can make a quick buck." Once it started being eroded the culture became "Wheee!" - and unsurprisingly everything exploded and the wheels came off. IMO anyone who would argue for less regulation after that isn't living at an address in the reliable side of town. The important arguments have to do with quality of oversight and the culture of people who will consistently try to be as irresponsible as they can be if they're not regulated. Regulation is a means to that end, not an end in itself.
    - yummyfajitas 11y ago
      tl;dr; GS wouldn't have done anything, but it might magically change the "culture" and cause regulators to do other unspecified things which would have done something. Um, ok. Also, the main "make a quick buck" bank was Goldman. They did just fine. It was the "make long term safe bets" banks that had problems, e.g. Countrywide, WaMu, Citi. Also, there is nothing inherently wrong with securitization. The underlying problem was the mortgages themselves; securitization merely shifts the risk around. Regulation isn't just a magic lever that you can switch to "more" or "less". Your post is as clueless as a PHB saying "we need more code, lets switch to J2EE so we'll have lots more lines of code!"
      - scurvy 11y ago
        Incorrect. GS and worthy oversight would have nipped most of this in the bud. Just look at what these banks had on their balance sheets at the time, and it would make anyone with a modicum of banking background recoil in horror. I'm not trying to sound ageist, but judging from the comments on this thread, it appears as if this generation has not learned from 2008 and is bound to repeat the same mistakes. I went through this before with the S&L crisis, one that was largely the fault of lax oversight. We didn't have another blowup until 2008; I guess that was long enough for everyone to forget the early 80's. Guess it's time to start buying Swiss Francs.

dataker 11y ago

You're not understanding the concept of enforcement and regulation: it is supposed to be a barrier of entry. http://www.cnbc.com/id/100431660 http://www.cnbc.com/id/100431660