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Paul Volcker | Financial Reform: Unfinished Business
Important article in the NY Review of Books. Excerpt and link below.
Chris
Financial Reform: Unfinished Business
November 24, 2011
Paul Volcker
"It should be clear that among the causes of the recent financial crisis was an unjustified faith in rational expectations, market efficiencies, and the techniques of modern finance. That faith was stoked in part by the huge financial rewards that enabled the extremes of borrowing, the economic imbalances, and the pretenses and assurances of the credit-rating agencies to persist so long. A relaxed approach by regulators and legislators reflected the new financial zeitgeist.
All the seeming mathematical precision that was brought to investment, all the complicated new products, including the explosion of derivatives, that were intended to diffuse and minimize risk, did not work as had been claimed. Instead, the vaunted efficiency helped justify an explosion of weak credit and an emphasis on trading along with exceedingly large compensation for traders."
Read the article: http://www.nybooks.com/articles/archives/2011/nov/24/financial-reform-un...
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Pointing fingers is easy. What is most curious is the pointers are always exposing the symptoms or actions that support an unsustainable PONZI scheme. Or, they're insisting more regulatory power for the criminal wrongdoers will right the situation, further enslaving themselves. They see a burning tree, failing to see the conflagration around them. It is this obfuscation and misdirection that has served the money power so well.
The privately held Federal Reserve is the top regulator of to big to fail banks. It's creation of money out of thin air and lending it at interest to the sovereign is the most insidious of criminal PONZIS, for which it's facade of regulations and monetary policies follow.
If we want real oversight in the Financial Markets, too restore real Free Market Capitalism to the Republic, we must first eliminate the most pernicious corrupting force of all. END THE FED.
See:
Money Power And The Central Bank: Life Is But A MEME
END THE FED: THE FIRST STEP IN RESTORING OUR CONSTITUTIONAL REPUBLIC
Based on Ponzi dynamics, credit expansions and speculative manias are naturally self-limiting. Credit expansions expand exponentially until the debt they generate can no longer be serviced and no one remains to push prices up further.
Central Banks, Bubbles And The Coming Unwind
Can you say; Counter Party Risk? See how money, created out of thin air has exploded the worlds financial sector and how it can disappear as if it never existed:
Evaporation of Wealth on a Vast Scale: How $Millions - Trillions Can Disappear
- Inflection Point
"First, the risk of failure of “large, interconnected firms” must be reduced, whether by reducing their size, curtailing their interconnections, or limiting their activities....
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....Concerning the first element I have listed, dealing with financial institutions that are “too big to fail,” the US approach in the Dodd–Frank bill sets out limited but important reforms. First, the size of the major financial institutions (except for “organic” growth) will be constrained by a cap on assets as a percent of the US GDP. ****That cap is slightly higher than the existing size of the largest institutions*****, and is justified as much by the need to limit further concentration as by the need for prudential measures in case of failure."
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Am I translating the above correctly? The big 4 shall be allowed to exist, and get a bit larger? Well, just find me a barf bag, because I am going to puke...someone stop the insanity. Even Paul Volcker can not say what needs to be said - disappointing to say the least.
So, the casino was rigged, was it.