On Mar 30, 8:20 pm, "sinister" <sinis...@[EMAIL PROTECTED]
> wrote:
> http://www.nytimes.com/2008/03/23/business/23how.html?pagewanted=2&_r=2
>
> "A milestone in the deregulation effort came in the fall of 2000, when a
> lame-duck session of Congress passed a little-noticed piece of
legislation
> called the Commodity Futures Modernization Act. The bill effectively
kept
> much of the market for derivatives and other exotic instruments
off-limits
> to agencies that regulate more conventional assets like stocks, bonds
and
> futures contracts.
> "Sup****ted by Phil Gramm, then a Republican senator from Texas and
chairman
> of the Senate Banking Committee, the legislation was a 262-page
amendment to
> a far larger appropriations bill. It was signed into law by President
Bill
> Clinton that December."
>
> Or as Krugman put it:
>
> http://www.nytimes.com/2008/03/24/opinion/24krugman.html?_r=1&scp=1&s...
>
> "Not if Mr. McCain makes it to the White House. His chief economic
adviser
> is former Senator Phil Gramm, a fervent advocate of financial
deregulation.
> In fact, I'd argue that aside from Alan Greenspan, nobody did as much as
Mr.
> Gramm to make this crisis possible."
Let's not forget about the Gramm-Leach-Bliley Act that repealed Glass-
Steagall.
We absolutely need to re-instate Glass-Steagall.
We also need to take it a step further and:
1. Draw a similar separation between primary market ops and secondary
market ops within the investment banking sphere.
2. Put some capital adequacy requirements around certain investment
banking activities (much like we have in banking).
If we do not, we will continue to have LTCM/Enron/Amaranth/Bear_Sterns
type meltdowns every few years.
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