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The SEC Fiddled While Rome Burned (Part 3 of 3)
Botching the Bernie Madoff Ponzi swindle and thus failing to prevent tens of billions in losses was pretty bad press for the SEC. But the more one looks into the agency’s conduct in the Bush years, the more missteps become apparent. Take Allied Capital, a D.C.-based finance firm that makes loans to small to mid-size concerns, whose stock is
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The SEC Fiddled While Rome Burned (Part 2 of 3)
Part 2 of 3. In 1992, the Securities & Exchange Commission was presented with a trail straight into Bernie Madoff’s $50 billion Ponzi scheme. But the SEC ignored it. Then, in 2000, in a memo urging the SEC promptly to investigate Madoff, an independent forensic accountant outlined his
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The SEC Fiddled While Rome Burned (Part 1 of 3)
Part 1 of 3. In 2004, the Securities & Exchange Commission made a decision that doomed our economy to failure. In a meeting lasting less than an hour on April 28, 2004, the agency approved of a rule that let the country’s five largest investment banks–including Bear Sterns, Lehman Brothers,
The Trillion Dollar Era
When news came out about the Wall Street bonuses in 2008 totaling about $18.4 billion, a funny thing happened. Before long people started rounding the figure up. But we weren’t rounding up to $18.5 billion, or even $19 billion, let alone down to $18 billion. Rather, we were rounding up to
Wall Street Pay Caps, Ayn Rand and the Tyranny of Self-Interest
The populist uproar is deafening regarding the excessive salaries and bonuses on Wall Street. Over $18 billion in bonuses paid to Wall Street barons in 2008–big rewards for total and utter failure, according to most Americans. Sen. Claire McCaskill, D-Missouri, was the first politician to come
Everywhere and Nowhere
People often compare the current economic crisis to the Great Depression. The truth, however, is that we are dealing with a different kind of animal. The nature of high finance in the 21st century – with its complex derivatives, side bets and mind-numbing mathematical models – finds
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The Wall Street Bonus Bonanza
The pundits are abuzz about reports of Wall Street bonuses paid out for 2008, which was one of the worst, if not THE worst, economic years in this country’s history. The New York State Comptroller reports that Wall
How Does Goldman End Up Golden?
As one of his first actions as President, Barack Obama issued ethics rules applicable to White House officials. The Executive Order on Ethics Commitments by Executive Branch Personnel requires that lobbyists who become members of Obama administration will not be able to work on matters they lobbied on
It’s not just about greed. It’s about pressure.
We’ve heard a lot of statements that Wall Street greed and CEO Salaries as the blame for most or the entire global financial crisis. While there is plenty of greed on Wall Street, greed alone does not explain what is happening and focusing on it will not solve the problem. Rather, pushing the
The Psychology of Financial Bubbles
Why is it that economic bubbles are created, over and over again? What’s the psychological component? Virginia Postrel writes about the psychology of financial bubbles in a recent Atlantic Magazine, and makes some fascinating
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