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"Break the Glass" was the code-name high-level Treasury Department figures gave the $700 billion bailout; it was to be used only as a last-resort measure.
Now millions have been sprayed and damaged by broken glass.
But more than a decade ago, a woman you're likely never to have heard of, Brooksley Born, head of the Commodity Futures Trading Commission -- a federal agency that regulates options and futures trading -- was the oracle whose warnings about the dangerous boom in derivatives trading just might have averted the calamitous bust now engulfing the US and global markets. Instead she was met with scorn, condescension and outright anger by former Federal Reserve Chair Alan Greenspan, former Treasury Secretary Robert Rubin and his deputy Lawrence Summers. In fact, Greenspan, the man some affectionately called "The Oracle," spent his political capital cheerleading these disastrous financial instruments.
On Thursday, the New York Times ran a masterful and revealing front page article exposing the culpability of Greenspan, Rubin and Summers for the era of dangerous turbulence we live in.
What these "three marketeers" -- as they were called in a 1999 Time magazine cover story -- were adept at was peddling the timebombs at the heart of this complex crisis: exotic and opaque financial instruments known as derivatives -- contracts intended to hedge against risk and whose values are derived from underlying assets. To cut to the quick, Greenspan, Rubin and Summers opposed regulating them. "Proposals to bring even minimalist regulation were basically rebuffed by Greenspan and various people in the Treasury," recalls Alan Blinder, a former Federal Reserve board member and economist at Princeton University, in the Times article.
In 1997, Brooksley Born warned in congressional testimony that unregulated trading in derivatives could "threaten our regulated markets or, indeed, our economy without any federal agency knowing about it." Born called for greater transparency -- disclosure of trades and reserves as a buffer against losses.
Instead of heeding this oracle's warnings, Greenspan, Rubin & Summers rushed to silence her. As the Times story reveals, Born's wise warnings "incited fierce opposition" from Greenspan and Rubin who "concluded that merely discussing new rules threatened the derivatives market." Greenspan deployed condescension and told Born she didn't know what she doing and she'd cause a financial crisis. (A senior Commission director who worked with Born suggests that Greenspan and the guys didn't like her independence. " Brooksley was this woman who was not playing tennis with these guys and not having lunch with these guys. There was a little bit of the feeling that this woman was not of Wall Street.")
Originally posted by redhatty
reply to post by BluegrassRevolutionary
These hearings came from 1998 when Clinton, a Democrat, was in office. Robert Rubin, a Democrat, was Clinton's Sec. of Treas. Lawrence Summers, a Democrat, was Clinton's Deputy Sec. Treas.
The only Republican around is the Libertarian Republican, Greenspan.
Reagan brought him in, bit no one else had to keep him, including Clinton.
Since the signs were apparent 10 yrs ago, I would consider it safe to say that BOTH PARTIES are responsible for this mess, both for knowing it was coming and for doing nothing to control it before it got this bad.
Edit to add:
In fact, it was Clinton's deregulation of the Glass-Steagall Act that allowed all this mess to happen in the first place source
[edit on 10/21/08 by redhatty]
Originally posted by BluegrassRevolutionary
Originally posted by redhatty
reply to post by BluegrassRevolutionary
These hearings came from 1998 when Clinton, a Democrat, was in office. Robert Rubin, a Democrat, was Clinton's Sec. of Treas. Lawrence Summers, a Democrat, was Clinton's Deputy Sec. Treas.
The only Republican around is the Libertarian Republican, Greenspan.
Reagan brought him in, bit no one else had to keep him, including Clinton.
Since the signs were apparent 10 yrs ago, I would consider it safe to say that BOTH PARTIES are responsible for this mess, both for knowing it was coming and for doing nothing to control it before it got this bad.
Edit to add:
In fact, it was Clinton's deregulation of the Glass-Steagall Act that allowed all this mess to happen in the first place source
[edit on 10/21/08 by redhatty]
I understand when these hearings took place. Given that, I obviously understood who was in office at the time and what their party affiliations were. However, I have never heard the "libertarian republican" line about Greenspan, that was a good one. By the way, the next time you choose a source, try not picking a source so blatantly bias, it insults our intelligences. Try typing "Failure of Reaganomics" into Google and you will find many, many sources to support my statement that the Republicans most directly at fault for this financial crisis. By the way, most of the sources you find in this source will be legitimate, unlike the one you provided.
Originally posted by jd140
I vow to follow you to the gates of hell to make sure you get that the government as a whole is to blame for our mess. You keep blaming one party or one president. Why isn't it so hard for you to believe that both parties are corrupt? Both parties are responsible in their own way for what has happened to our wonderful country. You know how I feel about it but I will repeat myself. The government as a whole is to blame. Not one man and not one party.
It's just coincendance that I reply to the same threads as you, I'm not really stalking you.........................or am I .
[edit on 22-10-2008 by jd140]
Originally posted by redhatty
No matter who gets in office with the coming election, I am pretty certain we will be scroomed again.
Originally posted by BluegrassRevolutionary
That being said, I am always willing to consider another person's point of view and, if warranted, change my beliefs.
They Warned Us About the Mortgage Crisis
State whistleblowers tried to curtail greedy lending—and were thwarted by the Bush Administration and the financial industry
More than five years ago, in April 2003, the attorneys general of two small states traveled to Washington with a stern warning for the nation's top bank regulator. Sitting in the spacious Office of the Comptroller of the Currency, with its panoramic view of the capital, the AGs from North Carolina and Iowa said lenders were pushing increasingly risky mortgages. Their host, John D. Hawke Jr., expressed skepticism.
Roy Cooper of North Carolina and Tom Miller of Iowa headed a committee of state officials concerned about new forms of "predatory" lending. They urged Hawke to give states more latitude to limit exorbitant interest rates and fine-print fees. "People out there are struggling with oppressive loans," Cooper recalls saying.
Hawke, a veteran banking industry lawyer appointed to head the OCC by President Bill Clinton in 1998, wouldn't budge. He said he would reinforce federal policies that hindered states from reining in lenders. The AGs left the tense hour-long meeting realizing that Washington had become a foe in the nascent fight against reckless real estate finance. The OCC "took 50 sheriffs off the job during the time the mortgage lending industry was becoming the Wild West," Cooper says.
Originally posted by governmentsecrets
in this misogynistic world, a woman will never be allowed to solve any global crises.
anyone agree?