I parted ways with Sarah Palin yesterday

[Travis Henry]

Originally Posted by BYU71

Of course you have to have some regulation, even Mitt Romney says that. We have regulation on the Presidency, he can only run for two terms. Please tell me you aren't against that. We ought to have it for all politicians.

The problem with regulation is not the regulation, but those who enforce it. Regulators get in bed with politicians and the big and influential money on Wall St.

I started 25 years ago with a big Wall St. brokerage firm. The solid lesson I learned working form them was my first duty to my clients is to protect them from the firm I worked for.

By the way for all you libs who might be cheering my words, you will find if you look closely enough a large number of those fat cats back there ripping people off on Wall St. are democrats.

After my experiences during the limited time I lived in New York, I can attest to the statement that the people who work on Wall Street are more in bed with the Democratic Party than the libs would like to think. If one simply looks at political donations made by the banking industry they'll see that Chris Dodd is the #1 recipient. The mortgage bailout law's language was largely adopted from language that BofA suggested.

The Wall Street Libs are smart enough to realize that the tax code really nails the people that are making over $200k up to around a couple million who don't have an understanding of tax law and/or access or enough wealth to take advantage of tax protected investments. In other words, all of the doctors, dentists and small to medium sized business owners around the country. For example, in 2004, Bush who had an income of around $500k paid an overall tax of 30%, Kerry who had an income of something like $10 million (very ballpark) paid around 15%.

[Travis Henry]

Originally Posted by Tex

Travis Henry is the 3rd person who seems to think I want no regulation at all. I went back and read my post just to see if I was unclear.

I don't think I said that. Either I need to take a communications class, or you folks need to read a little more closely before knee-jerking.

You clearly infer that you don't want anymore regulation (not a total lack, just no additional regulation). What is one to make of your statement regarding Sarbanes-Oxley? Is the reasonable interpretation of this statement "Tex, clearly is arguing that more regulation is good" or is it "Tex is taking the 2nd year BYU Finance Major position that more regulation = bad government involvement that hinders the economy?"

What it looks like to me is you make weak, uninformed statements that seem to follow line for line with a hardcore conservative stance. Then people point out the weakness, and then you state you never made that stance in the first place.

[Tex]

Originally Posted by Travis Henry

You clearly infer that you don't want anymore regulation (not a total lack, just no additional regulation).

Exactly. Or to parse a little, "any more" as opposed to "anymore". Responses, however, were:

How can anyone think regulation isn't at least part of the answer?

In Tex's world, the lies are ok, and should not be regulated.

But sometimes laws and/or regulations serve a useful purpose and I don't agree that it should be a total free for all.

Nothing I said implies (not "infers") that I believe any of those things. I just don't think putting MORE gov't bureaucrats in the back pockets of companies will "fix" this. The market fixes it.

And I think Sarbanes-Oxley is an albatross. Typical overreaction by politicians wanting to show they are doing something in an election year.

Lastly, citing the Great Depression is the Godwin's law of economic discussions.

[Tex]

Here's Jim Geraughty's take on the candidates' responses to Wall Street's problems. His feelings echo my own:

Some Painfully Vague Rhetoric About Financial Markets

Last night, Mrs. CampaignSpot and I clicked through the channels, and came across PBS Newshour. We stopped briefly, and heard McCain say:

Mrs. CampaignSpot's reaction: What? But what does any of that mean? "Do the job right"? "Comprehensive regulations"? "Fully enforced"? Nothing he's saying is anything anyone could oppose. He's talking, but he's not really saying anything!

I didn't disagree, finding McCain's talk painfully generic. Then Obama came on the screen.

Mrs. CampaignSpot's reaction: Okay, that was terrible, too.

I suppose under an Obama administration, we can take solace in the fact that the rules "wouldn't stand still." Of course, that might make them harder to follow.

So just to refresh, "casual oversight" is bad; "scattered, unfocused and ineffective" regulators are bad; a "dozen federal agencies doing the job badly" is... well, bad; "wild speculation that could put our markets at risk" is bad, "old institutions" are bad, "old rules" are bad, "outdated oversight structures" are bad, and "an ethic of greed corner-cutting and inside dealing" is bad.

"The best federal agencies do[ing] the job right" is good; "comprehensive regulations that will apply the rules and enforce them to the full" is good; "constant access to the books and accounts of our banks and other financial institutions" is good, "reforms" are good, "sensible reform that rewarded success and freed the creative forces of the market" is good.

Thanks to the candidates for clearing that up.

[Travis Henry]

Originally Posted by Tex

Exactly. Or to parse a little, "any more" as opposed to "anymore". Responses, however, were:





Nothing I said implies (not "infers") that I believe any of those things. I just don't think putting MORE gov't bureaucrats in the back pockets of companies will "fix" this. The market fixes it.

And I think Sarbanes-Oxley is an albatross. Typical overreaction by politicians wanting to show they are doing something in an election year.

Lastly, citing the Great Depression is the Godwin's law of economic discussions.

Horsecrap, you already stated in a subsequent post that you don't want any more government regulation. I didn't read that until after I made my post, so I'll replace my statement regarding "infer" and replace it with "you directly stated." I also like your references to gramatical errors on my part, that always strengthens your position. In addition, maybe you could provide us with dictionary references that will help your argument about the difference between imply and infer.

Citing to the Great Depression is perfectly relevant to the discussion because a lot of the things happening right now are strikingly similar to what happened during the onset of the Depression. Some of the symptoms of the current financial crisis are similar to what led to the Great Depression. As a sidenote, Ben Bernanke's Doctoral Thesis argued that greater intervention by the Fed during the initial panic that led to Great Depression would have prevented some of the long lasting effects. Ironically enough, Bernanke is now dealing with some very similar occurrences. So yeah, I think references to the Great Depression are not merely the equivalent of using an economic Nazi card.

Sarbanes-Oxley is one thing, and I'm curious as to whether you know anything about Sarbanes-Oxley or are you just repeating the party line? I will agree that having an agency oversee and check off on things during their implementation is usually repressive, expensive and really not needed. But I'm referring to laws and regulations- certain things are prohibited, and you if you violate them, then you're breaking the law. For instance if there were a law that stated no negative amortization or interest only loan were to ever be given to someone with net worth of less than $10 million, I think a huge part of the current problem would have been avoided. If a lending institution provided such loans, they would be breaking the law and would be subject to criminal prosecution.

If you track the increase in prices in California you'll find that they strongly correlate to the increased use of Options ARMs and interest only loans. People look more at the monthly payment on a house as opposed to the overall price. Additionally, the low initial teaser payments allowed house flippers to buy multiple properties to the point that up to 40% of the demand in many markets (e.g. Phoenix, Vegas, the inland empire) was due to house flippers. Eliminate the illusory demand and you get rid of a significant factor that led to the housing bubble.

I would venture to say that without these suicide loans, we don't have the current crisis. Housing prices don't escalate to the point where they were bound to significantly fall and the values on the underlying collateral on the MBS don't diminish. All of sudden Lehman Brothers and AIG don't have huge liquidity problems and the Fed doesn't have to bail out Fannie Mae. And it all could have been averted if the use of Option ARMs and interest only loans were sharply curtailed.

[Tex]

Originally Posted by Travis Henry

you already stated in a subsequent post that you don't want any more government regulation.

Of course. The confusion seems be whether I said I wanted no regulation at all. Clearly, I did not say that.

Originally Posted by Travis Henry

Citing to the Great Depression is perfectly relevant to the discussion because a lot of the things happening right now are strikingly similar to what happened during the onset of the Depression.

This gets said in every economic downturn (which we're not even experiencing at the moment). If it's not the Depression, then it's 1987.

Originally Posted by Travis Henry

Sarbanes-Oxley is one thing, and I'm curious as to whether you know anything about Sarbanes-Oxley or are you just repeating the party line?

I'm a software developer not an accountant, so I can't cite you chapter and verse. But my father, my home teacher, and one of my best friends are all accomplished CPAs. None of them speak highly of the additional mess for their jobs SOX created.

In addition, some of the new procedures our IT group had to follow to be "compliant" were ridiculously intrusive, but my work (personally) was only marginally affected.

Originally Posted by Travis Henry

If you track the increase in prices in California you'll find that they strongly correlate to the increased use of Options ARMs and interest only loans. People look more at the monthly payment on a house as opposed to the overall price. Additionally, the low initial teaser payments allowed house flippers to buy multiple properties to the point that up to 40% of the demand in many markets (e.g. Phoenix, Vegas, the inland empire) was due to house flippers. Eliminate the illusory demand and you get rid of a significant factor that led to the housing bubble.

I would venture to say that without these suicide loans, we don't have the current crisis. Housing prices don't escalate to the point where they were bound to significantly fall and the values on the underlying collateral on the MBS don't diminish. All of sudden Lehman Brothers and AIG don't have huge liquidity problems and the Fed doesn't have to bail out Fannie Mae. And it all could have been averted if the use of Option ARMs and interest only loans were sharply curtailed.

Not sure I disagree with any of this.

[Archaea]

Originally Posted by MikeWaters

essentially the govt. wants to regulate the private market so that there is less lying and cheating.

Company X says there product is worth $1 million. It's really worth $100,000. Company Y buys the product. Company Y sells to Company Z. And so forth. In Tex's world, the lies are ok, and should not be regulated.

I'll take the bait, stupid is and stupid does.

"Regulation" means oversight first and control second. Once regulation kills something, then it becomes subsidized.

Do you really believe government operatives care whether there is lying and cheating? That's much too simplistic.

Operatives prefer to have market predictability and some form of stability. It is believed if information provided is accurate that stability can be achieved. So far so good.

But in reality, government operatives prefer their oversight and their control because they actually believe they are more educated, more enlightened and better informed as to what should go on in a market, even though the bulk of them have never operated in a market.

Government regulators tend not to like things they don't control because a lack of control scares them.

Regulation is about control. Not about honesty. People like Cali believe the increased costs associated with regulation are recaptured in savings from losses that would have been incurred but for regulation. It's very circular, not very convincing and certainly not true in all industries.

As far as securities are concerned, accurate information is important, and ultimately insurers will seem themselves regulated at a federal level, even though they are currently regulated at the state level, but such multi-national companies are arguably not effectively regulated at the state or even national level.

In my mind, regulation should be a last resort, not a first impulse a la Cali. Information should be accurate so that the market can respond appropriately. Monopolies or groups acting like monopolies often as a last resort require more oversight than non monopolies.

[SoCalCoug]

Originally Posted by Tex

*cue sound of hell freezing over*

While our more liberal friends here fret over Palin potentially removing "Heather Has Two Mommies" from our public libraries, yesterday I was unhappy with some of her comments about how a McCain administration would handle Wall Street.

She (and McCain) seem to think that more regulation is the answer. They think the regulatory agencies haven't been doing their job, and that's why these companies are in trouble. I even heard McCain vow that this would not happen again under his tenure. Really, John? You gonna legislate how they invest now?

Enron gave us the disaster that is Sarbanes-Oxley. We don't need another one of those. We need less gov't involved, and to let market forces play their role.

Palin has a touch of a populist in her, and I really don't like that. I can barely stand McCain as it is, so this just reinforces my distaste, but however much I like his running mate, I'm constantly reminded that he'll be the one running the country.

Ugh.

She's not conservative enough. Check.

Color me unsurprised that you part with someone because they're not far enough to the right.

Let me know when you disagree with someone because they're too conservative.

[Archaea]

Originally Posted by SoCalCoug

She's not conservative enough. Check.

Color me unsurprised that you part with someone because they're not far enough to the right.

Let me know when you disagree with someone because they're too conservative.

You don't understand. Conservative is a flexible term meaning whatever is good and righteous. Liberalism is whatever bad and loathsome.

So how can one disagree with whatever is good and righteous?

I don't find her to be my first, second or third choice for VP because she's from a small state with no electoral votes and doesn't have any experience.

Obama having only three years in the Senate doesn't impress me either. What the hell do these parties think of us that they throw these neophytes at us. But at least Palin has executive experience.

What's the sum total of executive experience of the other three candidates combined? Zero. IOW, you and I have the same amount of political executive experience.

[Tex]

Originally Posted by SoCalCoug

She's not conservative enough. Check.

Color me unsurprised that you part with someone because they're not far enough to the right.

Let me know when you disagree with someone because they're too conservative.

Reductio ad absurdum.