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Why the SEC Won’t Hunt Big Dogs

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Re: Why the SEC Won’t Hunt Big Dogs

#31

Post by bbatsell »

yummyfajitas wrote: post #25
shareme wrote: post #14

Earlier quoted context omitted.

that gets bigger each time after a major financial deregulation law package passes..its an uncanny correlation..uncanny as most congress people and senators seem to be okay with overlooking it as long as their political war chests are filled with lobbyists dollars..

I'm curious - what are the major financial deregulation laws you are speaking of?

The Garn–St. Germain Depository Institutions Act preceded the S&L crisis and both the Gramm–Leach–Bliley Act and the Commodity Futures Modernization Act preceded the subprime mortgage crisis.

http://en.wikipedia.org/wiki/Garn_-_St_Germain_Depository_In...

http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

http://en.wikipedia.org/wiki/Commodity_Futures_Modernization...

Re: Why the SEC Won’t Hunt Big Dogs

#32

Post by abduhl »

pork wrote: post #23
wanorris wrote: post #3

Pardon my pedantry, but that's a terrible mixed metaphor in the title. Who goes hunting for dogs? No one; rather, dogs accompany hunters, perhaps while in pursuit of big game .

You're correct, but dogs are rarely used in the pursuit of big game.

Depends on the game. Dogs are quite often used for flushing out big game (see old bear hunting approaches or boars).

Re: Why the SEC Won’t Hunt Big Dogs

#33

Post by joe_the_user »

njharman wrote: post #7
dasil003 wrote: post #5

I wish they had let Wall Street crash and burn when they had the chance. It's obvious that the majority of credible advisors had an inherent conflict of interest in proclaiming that systematic failure would destroy the economy irreparably. I say it would have been better to let the economy crumble and then rebuild it rather than allow this precedent to be set that investment banks can take any disk imaginable and it'…

The precedent was already set before. S&L others, it's a regular, periodic occurrence.

The bailouts have indeed occurred on a regular basis since at least, say, the mid 80's (the Continental Illinois Bailout). The rather clear problem is they have been increasing in size at an alarming rate.

This is exactly what one would expect. Each bailout increases the moral hazard involved in the banking system.

http://en.wikipedia.org/wiki/Moral_hazard

Heaven help us with the next bailout.

Re: Why the SEC Won’t Hunt Big Dogs

#34

Post by joe_the_user »

nobody3141 wrote: post #6
dasil003 wrote: post #5

I wish they had let Wall Street crash and burn when they had the chance. It's obvious that the majority of credible advisors had an inherent conflict of interest in proclaiming that systematic failure would destroy the economy irreparably. I say it would have been better to let the economy crumble and then rebuild it rather than allow this precedent to be set that investment banks can take any disk imaginable and it'…

Quick economics lesson. The money on Wall St doesn't belong to the guys in red braces - it is the pensions of ordinary Americans and the savings of little old ladies. Letting Wall St crash and burn means everybody in America's pension disappears - everybody over 65 is out on the street. Everybody who saved money has lost it. Nobody accepts cash anymore, after all if you put it in the bank it might dissapear. You are…

The government already insures most private pension funds.

That insurance fund would indeed have been wiped out, however, the government could have injected more money into it. This would have been the appropriate level for the bailout to take. Save the pension funds and FDIC insured savings, let all the large banks and brokerage houses go bust. The small business administration could also have provide some bridge loans for smaller companies stuck without capital.

See: http://en.wikipedia.org/wiki/Pension_Benefit_Guaranty_Corpor...

Re: Why the SEC Won’t Hunt Big Dogs

#35

Post by spot »

randomdata wrote: post #24
nobody3141 wrote: post #6

Earlier quoted context omitted.

Quick economics lesson. The money on Wall St doesn't belong to the guys in red braces - it is the pensions of ordinary Americans and the savings of little old ladies. Letting Wall St crash and burn means everybody in America's pension disappears - everybody over 65 is out on the street. Everybody who saved money has lost it. Nobody accepts cash anymore, after all if you put it in the bank it might dissapear. You are…

Letting Wall St crash and burn means everybody in America's pension disappears - everybody over 65 is out on the street. Everybody who saved money has lost it. Was that not well understood beforehand? I'm Canadian, but our government will only certify certain investments. Everything else comes with the understanding that all of your money could be gone tomorrow. As such, we plan for such occasions. It is an expectati…

Here in America that certification is done by "the market" (S&P and Moody's). They gave the CDOs AAA ratings. Of course the fact that they were paid by the same companies that were submitting the CDOs didn't effect their judgement whatsoever. Except they found the emails where they said "go easy on these guys otherwise we lose their business". Oh you mean they made the ratings up? Yea. But that's legal, since the ratings came with no guarantees. They are the "free speech" like poetry. Welcome to America. Sucker.

Re: Why the SEC Won’t Hunt Big Dogs

#36

Post by anigbrowl »

thaumaturgy wrote: post #15

For a better article: http://www.rollingstone.com/politics/news/why-isnt-wall-stre... The short of it is that many of the people that work for the SEC and the Justice Department are themselves financial industry insiders who have no interest in pursuing their friends or ruining their professional futures.

"That's right," he said, signaling to the waitress for the check. "Everything's fucked up, and nobody goes to jail. You can end the piece right there."

As I heard it, that was the sarcastic end to a 'conversation' in which Taibbi persisted in ignoring any information that did not fit that narrative. The DoJ has put a string of financial industry people in jail for fraud but Taibbi never, ever tells his readers about those cases. TBW was one of the largest mortgage brokers in the country and the almost entire C-suite went to jail; the chairman got 30 years. Taibbi's sole comment on this was that he was 'the exception that proves the rule.' Complete bullshit. Matt Taibbi's schtick is to endlessly repeat that the system is broken that nobody cares so he can reap pageviews from the ignorant. You absolutely cannot rely on this guy for objective reporting.

http://www.stopfraud.gov/news.html

Re: Why the SEC Won’t Hunt Big Dogs

#37

Post by anigbrowl »

joe_the_user wrote: post #29
anigbrowl wrote: post #2

A few of my in-laws are working night and day, literally, to meet the legal document production requirements for a DoJ investigation of a Large Financial Institution which must remain nameless for ethical reasons. The DoJ is doing it's best to investigate Wall Street as aggressively as it can, but their electronic discovery team's annual budget is on the order of $20 million, which is peanuts when an investigation ca…

Hmm, At what point do the claim "they are doing their best" and the claim "clearly they don't have the resources to do anything" collide and explode into burning rubble? I can believe that there are many noble individuals in the Doj who are doing their best. But how can one not call a resource-less investigation a tooth-less investigation if you are talking about intentions of Doj itself ?

DoJ puts in budget requests to Congress, which then grants, modifies, or denies them as it sees fit. Heads of agency have a surprisingly limited amount of budgetary autonomy; they can't just reroute millions of dollars because they think it would be sensible. Check out pages 59-62 of this document to get an idea of amount of begging required for the pissant sum of $2 million bucks: http://www.justice.gov/jmd/2011justification/pdf/fy11-usa-ju...

Congress has the power of the purse, and can keep the executive branch on a very short lease if it chooses. Meantime, subjects of an investigation can often borrow a tactic from civil litigation and bury the other side (in this case, the DoJ) with heaps of irrelevant or incidental material that will be enormously time-consuming to sort through.

Partly because of Congressional funding decisions going back for years and partly because of inefficiency, government legal investigators are badly lacking in the technical department. Sadly, this state of affairs suits some people very well.

Re: Why the SEC Won’t Hunt Big Dogs

#38

Post by guelo »

dasil003 wrote: post #5

I wish they had let Wall Street crash and burn when they had the chance. It's obvious that the majority of credible advisors had an inherent conflict of interest in proclaiming that systematic failure would destroy the economy irreparably. I say it would have been better to let the economy crumble and then rebuild it rather than allow this precedent to be set that investment banks can take any disk imaginable and it'…

There was no reason to let it crash and burn, the ripples through the economy would have been painful. What should have been done is an orderly government takeover through bankruptcy courts, then fire all the executives and finally break up the giant banks into 100 smaller institutions that would then compete with each other and wouldn't have as much lobbying clout in DC.

Re: Why the SEC Won’t Hunt Big Dogs

#39

Post by rhizome »

nobody3141 wrote: post #6
dasil003 wrote: post #5

I wish they had let Wall Street crash and burn when they had the chance. It's obvious that the majority of credible advisors had an inherent conflict of interest in proclaiming that systematic failure would destroy the economy irreparably. I say it would have been better to let the economy crumble and then rebuild it rather than allow this precedent to be set that investment banks can take any disk imaginable and it'…

Quick economics lesson. The money on Wall St doesn't belong to the guys in red braces - it is the pensions of ordinary Americans and the savings of little old ladies. Letting Wall St crash and burn means everybody in America's pension disappears - everybody over 65 is out on the street. Everybody who saved money has lost it. Nobody accepts cash anymore, after all if you put it in the bank it might dissapear. You are…

Letting Wall St crash and burn means everybody in America's pension disappears

What are you talking about, where does the money go? Money doesn't just "disappear."

Re: Why the SEC Won’t Hunt Big Dogs

#40

Post by guelo »

adamtmca wrote: post #4

I think a big part of the problem is probably talent. A hot shot kid coming out of a C.S./engineering program wants to work at Google or Facebook or a startup, not the federal government. A kid coming out of an econ/math/finance program wants to work for a "big dog" at an investment bank or a PE fund, not some wimpy bureaucrat.

There are plenty of "hot shot" CS and engineering kids working at the NSA, CIA and a bunch of other agencies, also at all the defense contractors. It's just a matter of funding. Funding for certain financial cops has been cut on purpose.
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