In listening to the Goldman Sachs executives squirm before the Congressional Hearing, the executive’s conflict of interest seems most apparent. How can you be an insurance company, an investment bank, a brokerage house and a lending bank all at the same time?
Over the past two to three decades legislators and regulators systematically removed restrictions against, mergers, branch banking, and mergers of entirely different business functions. Legislators even removed restrictions against, a family loosing their home due to bankruptcy.
This farm boy economist is confused and I am sure the public is confused as well. You cannot write a mortgage, then sell the mortgage as a packaged investment instrument and at the same time write insurance against the mortgage failing and selling it too as an investment instrument without it being a conflict of interest. This is no longer investment banking, rather a shell game of synthetic Investments. Derivatives, they call them, but derivatives do not support business, enterprise or productive innovation. What is worse these synthetic derivatives are unregulated by the Securities Exchange Commission --- “too big to understand” if they were.
We use to have laws against Monopoly, the long recognized “Achilles’ Heal” of capitalism. A monopoly does not have to be only one to be a monopoly. A half a dozen big anything controlling virtually the entire market is a monopoly. The executives of these companies do not have to play golf together to realize that they have the market to themselves. The cartel will work in harmony with or without spoken agreement to maximize their profit and to shut out competition. Monopoly must be prevented for capitalism to work for the common good.
Banks, insurance companies, brokerage houses and investment houses, not only merged into combinations of all four of the above, but also merged with one another into “too big to fail.”
This is bad. I don’t see any way to regulate without breaking up these Goliaths into their constituent parts: either a bank, an investment bank, an insurance company or a brokerage house. And, what’s with branch banking? Without a local bank, there is no way for a small business to get the support it needs to grow. Venture Capital, VCs, are all that kept new technology growing. I hope Congress gets this one right.
This is the third major banking crisis. First there was the HUD fiasco. Then there was the Savings and Loan debacle with politicians caught up in each and now the big one. Is it over, or are they still doing the same thing? Market maker is good for an investment house but not for a lending bank or an insurance company.
Over the past two to three decades legislators and regulators systematically removed restrictions against, mergers, branch banking, and mergers of entirely different business functions. Legislators even removed restrictions against, a family loosing their home due to bankruptcy.
This farm boy economist is confused and I am sure the public is confused as well. You cannot write a mortgage, then sell the mortgage as a packaged investment instrument and at the same time write insurance against the mortgage failing and selling it too as an investment instrument without it being a conflict of interest. This is no longer investment banking, rather a shell game of synthetic Investments. Derivatives, they call them, but derivatives do not support business, enterprise or productive innovation. What is worse these synthetic derivatives are unregulated by the Securities Exchange Commission --- “too big to understand” if they were.
We use to have laws against Monopoly, the long recognized “Achilles’ Heal” of capitalism. A monopoly does not have to be only one to be a monopoly. A half a dozen big anything controlling virtually the entire market is a monopoly. The executives of these companies do not have to play golf together to realize that they have the market to themselves. The cartel will work in harmony with or without spoken agreement to maximize their profit and to shut out competition. Monopoly must be prevented for capitalism to work for the common good.
Banks, insurance companies, brokerage houses and investment houses, not only merged into combinations of all four of the above, but also merged with one another into “too big to fail.”
This is bad. I don’t see any way to regulate without breaking up these Goliaths into their constituent parts: either a bank, an investment bank, an insurance company or a brokerage house. And, what’s with branch banking? Without a local bank, there is no way for a small business to get the support it needs to grow. Venture Capital, VCs, are all that kept new technology growing. I hope Congress gets this one right.
This is the third major banking crisis. First there was the HUD fiasco. Then there was the Savings and Loan debacle with politicians caught up in each and now the big one. Is it over, or are they still doing the same thing? Market maker is good for an investment house but not for a lending bank or an insurance company.
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