Banks are too big to prosecute

[flyerhawk]

Do you really want to be the one to make the argument that all regulations are good and necessary and that in regard to regulations more is better?

Go for it!

Of course not. Many regulations are bad, particularly the ones written by the industry that is to be regulated.

But simply defunding the SEC and the CFTC is a way to make the regulations irrelevant. And allowing financial organizations to shop for their preferred regulatory agency is even more ridiculous which is exactly what AIG did when they somehow managed to fall under the regulatory oversight of the even more toothless Office of Thrift Supervision.

[ctc]

Of course not. Many regulations are bad, particularly the ones written by the industry that is to be regulated.

But simply defunding the SEC and the CFTC is a way to make the regulations irrelevant. And allowing financial organizations to shop for their preferred regulatory agency is even more ridiculous which is exactly what AIG did when they somehow managed to fall under the regulatory oversight of the even more toothless Office of Thrift Supervision.

Now you're in tough territory. In the above post you're agreeing that not all regulations are beneficial, like the Chamber of Commerce.
And heretofore you've been arguing that the Chamber of Commerce is opposed to all regulation.
Which is it?

Or is this your Saul on the road to Damascus moment?

[flyerhawk]

And heretofore you've been arguing that the Chamber of Commerce is opposed to all regulation.

No. YOU brought up the Chamber of Commerce when I said that there has been an anti-regulatory mindset in this country for the past 30 years. You KEEP bringing up the CoC for whatever reason your mind thinks is appropriate.

[ctc]

No. YOU brought up the Chamber of Commerce when I said that there has been an anti-regulatory mindset in this country for the past 30 years. You KEEP bringing up the CoC for whatever reason your mind thinks is appropriate.

I simply mentioned the CoC as a possible source for you to quote on the belief that business believes regulation to be inherently bad.
You then delivered a piece that shows the CoC pointing out the consequences of over-regulation. So i reference the CoC only in regard to your use of them as an example of a mindset you've yet to establish.
Don't blame me because you can't find something to suit your purpose.

[flyerhawk]

Ugh. You didn't ASK me for examples. You brought up the CoC because.... well I have no idea why. I can bring up quotes from Reagan to Paul Ryan if you like. I doubt you much care because you are just arguing to argue unless you really believe that the Republican Party has not publicly opposed regulations for the past 30 years. If so, then clearly you weren't paying attention.

[DutchBird]

When i spoke of 'people' it applied to both lenders and consumers. The overturning of glass-steagall didn't cause bad judgement by either side. My offer remains.

Nope... Glass-Steagall just prevented the eventually guaranteed bad judgment (talk about euphemism) from bringing down the market and causing tremendous damage to everybody but the idiots/criminals exercising the bad judgment.

But then again, many free marketeers / economic neo-liberals refuse to look at history/actual human behaviour for a reason, because it basically invallidates most of the BS they propagate, or points out the dangers of their ideology for the rest (the vast majority) of society. They like to operate/think in a mythical vacuum dreamland world. The real world poses major problems for them... and dodge the problem by moving goal posts...

[ctc]

Nope... Glass-Steagall just prevented the eventually guaranteed bad judgment (talk about euphemism) from bringing down the market and causing tremendous damage to everybody but the idiots/criminals exercising the bad judgment.

But then again, many free marketeers / economic neo-liberals refuse to look at history/actual human behaviour for a reason, because it basically invallidates most of the BS they propagate, or points out the dangers of their ideology for the rest (the vast majority) of society. They like to operate/think in a mythical vacuum dreamland world. The real world poses major problems for them... and dodge the problem by moving goal posts...

This will indeed be rich.

How, exactly, did glass steagall prevent people, consumers or lenders, from exercising bad judgement?

[DutchBird]

This will indeed be rich.

How, exactly, did glass steagall prevent people, consumers or lenders, from exercising bad judgement?

Where did I say it did? Nowhere.

What Glass-Steagall did was make sure the damage these people could inflict was limited. Flipside was that the greedy people were limited in the ways they could make money and game the system. Hence they wanted it abolished, even more so - assuming they were not delusional - since they could be fairly certain that they would not be paying the price when things would be falling apart. And they have been proven right.

[ctc]

Where did I say it did? Nowhere.

What Glass-Steagall did was make sure the damage these people could inflict was limited. Flipside was that the greedy people were limited in the ways they could make money and game the system. Hence they wanted it abolished, even more so - assuming they were not delusional - since they could be fairly certain that they would not be paying the price when things would be falling apart. And they have been proven right.

GS might indeed have limited the damage an institution could suffer or inflict. The system, at any level is always gameable. The reason GS was eliminated was because deals were getting bigger and the size of the syndicate was getting larger. IB firms adn IB divisions of banks wanted to be able to take bigger slices of the deal because they were inded lucrative and become companies primary or sole source financial services provider. In order to do that however they needed access to the banks balance sheet. (That's also why you saw a number of IB/MB firms go public in the 80/90s, they needed bigger balance sheets to finance their deals. That's why they wanted GS amended, not for the nefarious reasons you suggest.

[AndromedaPatFan]

GS might indeed have limited the damage an institution could suffer or inflict. The system, at any level is always gameable. The reason GS was eliminated was because deals were getting bigger and the size of the syndicate was getting larger. IB firms adn IB divisions of banks wanted to be able to take bigger slices of the deal because they were inded lucrative and become companies primary or sole source financial services provider. In order to do that however they needed access to the banks balance sheet. (That's also why you saw a number of IB/MB firms go public in the 80/90s, they needed bigger balance sheets to finance their deals. That's why they wanted GS amended, not for the nefarious reasons you suggest.

The whole concept of an investment banking syndicate is fraught with difficulties. First, if it's consistently highly profitable, then the securities are probably being mis-priced. Second, if the pricing IS fair due to genuine syndicate risk, then the commercial banks perhaps shouldn't be assuming that risk. Third, the whole thing assumes an expensive, high-touch sales model that seems somewhat antiquated, except insofar as it leads to customers buying things they shouldn't.

[ctc]

The whole concept of an investment banking syndicate is fraught with difficulties. First, if it's consistently highly profitable, then the securities are probably being mis-priced. Second, if the pricing IS fair due to genuine syndicate risk, then the commercial banks perhaps shouldn't be assuming that risk. Third, the whole thing assumes an expensive, high-touch sales model that seems somewhat antiquated, except insofar as it leads to customers buying things they shouldn't.

Your describing a retail model. I'm thinking more of an private equity or institutional model, KKR as an example.

[AndromedaPatFan]

Your describing a retail model. I'm thinking more of an private equity or institutional model, KKR as an example.

Actually, I was using 1980s institutional equity as a model, because that's where I worked. :)