Max Keiser: ….they (Goldman Sachs, JP Morgan et al) are systematically undermining the entire system. They are creating a mechanism to carve out equity and capital for themselves at the expense of society at large.
So in the United States, unemployment is skyrocketing. The uninsured is skyrocketing. The social fabric is coming unglued. You have riots all over the world…in Iceland and other countries due to this financial terrorism that was pre-meditated, on purpose and should be addressed as such.
There is a double standard. Why is the US pursuing so-called terrorists in nations like Afghanistan when they let these guys roam free on Wall Street? They’re the worst criminals of all – they do far more damage.
Interviewer: Let’s leave Afghanistan out of this…
Max Keiser: But why? It’s a great source of poppy and heroin which fuels a lot of these bankers bonuses. Let’s be frank about that.
The Wall Street Journal Future of Finance Initiative principles describe a protocol for insiders, by insiders who are part of the cabal that created the problem in the first place. More of the “foxes guarding the henhouse” collective wisdom designed to protect the interests of big money and continue the game as usual.
There will be no end to the boom and bust cycle until gains from speculation in land are taxed away by the state.
Sorry it took this long to find the site:
A Call to Action
Here are the top 20 principles for rebuilding the financial system,
as developed by participants in The Wall Street Journal Future of Finance Initiative.
1 STRENGTHEN UNDERWRITING STANDARDS
Bank management and bank examiners must
enforce the banks’ minimum underwriting standards,
focused on the borrowers’ ability to repay
debt from income. Extend supervisors’ authority
beyond banks to mortgage brokers and other
bank agents. Ensure national real-estate appraisal
standards.
2 BOLSTER FDIC
Bolster the Federal Deposit Insurance Corp.
and provide it with additional funds and flexibility
so there is capacity to handle escalating bank
failures.
3 REGULATORY OVERHAUL
Streamline the regulatory architecture so there
is more effective and consistent regulation across
financial services and an end to regulatory arbitrage.
Improve effectiveness of regulators. Provide
them with better training, pay, status and resources.
Specific industry experience desirable. Testing,
licensing and continuing education required.
4 CREATE A NEW CLEARINGHOUSE
Create a clearinghouse to enhance transparency
for standardized credit-default-swap contracts,
including individual corporate names and
indexes. The clearinghouse would also extend to
overnight financing and interest-rate swaps.
5 RAISE CAPITAL REQUIREMENTS
Writers of credit-default swaps should face
higher capital (reserve or margin) requirements.
Banks heavily involved in the CDS market should
face a further surcharge for concentration risk.
6 ENHANCE COLLATERAL
Enhance collateral requirements on over-thecounter
derivatives to protect the system. To minimize
the effects of financial-institution failure,
regulators should segregate customer collateral in
the event of a bankruptcy by a firm involved in
the credit-default-swap market.
7 SMARTER SECURITIZATION
Improve disclosure in securitization, improve
underwriting standards, require all parties in the
process to have “skin in the game.” Create meaningful
standards for transparency of financial
flows in all instruments, and make the information
available in an easily accessed form.
8 RATING-AGENCY REFORM
Eliminate special status of rating agencies. Reform
pay structure for rating agencies to align incentives
better so they are paid over time as their
ratings prove to be accurate.
9 CONSISTENT REGULATORY SYSTEM
Include nonbank financial institutions under
regulatory umbrella and require them to provide
information to the systemic regulator. Regulation
should be risk-based. Firm-specific information
should be private, and only aggregate information
made public.
10 CONSTRAIN LEVERAGE
Limit leverage across large, systemically important
financial institutions, and enhance capital
requirements for certain products. Be clear about
how risk gets measured for purposes of leverage
and capital requirements.
11 LET TARP CAPITAL BE REPAID
Make regulators explicitly state conditions
for the repayment of money to the Troubled Asset
Relief Program.
12 EXECUTIVE COMPENSATION
Limit the government role in executive compensation
to companies where the government
has a stake. Companies should be sure executive
compensation provides the right set of incentives.
13 TRANSPARENCY BEFORE REGULATION
Systemic risk regulator should require all
firms first to provide information. Regulation
should be limited to those deemed to pose a systemic
risk. Intermediaries with sufficiently long
investor lock-ups and sufficiently low leverage relative
to risk should be granted a safe harbor from
regulation. Regulator should publicly disclose
cross-industry liquidity and concentration risk.
14 PRICE AND VOLUME TRANSPARENCY
The industry should publish price and volume
data on over-the-counter derivatives.
15 FED SHOULD BE SYSTEMIC RISK REGULATOR
The Federal Reserve should be the systemic
risk regulator of nonbank financial institutions. It
is important that the regulator be independent
and apolitical. We recommend using private-sector
advisory bodies. In order to take on these responsibilities,
the Fed may have to reallocate
some responsibilities to other agencies.
16 ENSURE SUCCESS OF PUBLIC-PRIVATE
PARTNERSHIPS
To improve the chances that the Public-Private Investment
Program works, the government should
recognize that many sellers of these assets are reluctant
because of the impact on their balance
sheet, and should allow for regulatory forbearance
on capital requirements or accounting flexibility.
17 ACCOUNTING RULES
Have a sensible set of accounting rules to reflect
value for financial reporting and capital
purposes.
18 NEW RESOLUTION AUTHORITY FOR
NONBANKS
Create an FDIC-like model for winding down nonbank
financial institutions that pose system risk.
Adopt global standards for determining how different
classes of creditors are treated.
19 AUDITORS ENFORCE CONSISTENT MARKS
Encourage disclosure of disparate asset
marks, by asking auditors to raise instances of
price discrepancies among clients.
20 LIMIT FORECLOSURES
More efforts to limit foreclosures through interest
and principal reductions, rent-to-own and
other creative solutions. Create a new federal
agency with sufficient resources to limit foreclosures.
Force banks to identify potential troubled
borrowers.
“Decapitation”. I think it’s a brilliant pun… “de-CAPitation”. Take away the marbles. To my way of thinking, the main thing is that all of this chaos/complexity/details/ranting/investigating/psychoanalysing simply points to the fact that a “price system” will not work in a high-tech world on a finite planet. When will we start addressing that?
It’s refreshing to see someone with the guts to speak the truth to the sleeping masses, many of whom chose to display their ignorance in a public forum, under the guise of being “financial experts.” Just like we can look back now & view people laughing at Peter Schiff’s comments in 2006 on youtube, in a few months, when the world is in the full throws of the Great Depression II, everyone will say, what happened to the billions we gave the bankers, & why weren’t they prosecuted for their crimes? (& then the masses will seek them out & it just may turn out to be exactly like the French revolution…) altho of course I hope it doesn’t come to decapitation!