I'm not going to spill ink on how contemptible the market has become over the past 8 years under our ownership, laissez faire loving MBA president and his blunt intrument of easy lending terms, Allen Greenspan. A lot of smart people have been chronicling this better than I ever could.
If you want to get some perspective on these financial current events check out these blogs;
the big picture
market ticker
minyanville
One of the ideas that I've been noodling over the past few days about is who I would like to see run the SEC when a new administration takes over. Current SEC chairman Christopher Cox acts like he doesn't have any idea how markets operate. Surely not a free market anyway. Seriously, is outlawing ALL short selling any kind of answer? What is this Russia? How about just enforcing the laws already on the books. I thought naked short selling was already illegal anyway. Maybe the government should prosecute some of these supposed 'criminals' before we start a witch hunt on short sellers in general?
When all of the dust settles in the market and these interventions are absorbed into the governments warm embrace there is certainly going to be a renewed enthusiasm for increased regulation. This is exactly what happened during the Great Depression. In 1933, in his first term President Roosevelt appointed Joseph Kennedy to be the first Chairman of the new Securities Exchange Commission, the SEC. Joseph Kennedy, JFK's father, made his fortune on wallstreet during the 1920s by running investment pools that participated on insider trading. It was legal then. He famously sold before the crash. His appointment was analogous to putting the fox in charge of the hen house.
If we can't find an ambitious hedge fund manager to take the job I think we should look for someone that is no friend to Wallstreet. My choice for SEC Chaiman is Elliot Spitzer. I can think of no one better. He's hated by Wallstreet and understands it's inner workings. Plus, he has an axe to grind after his political career was destroyed, probably by some of the wallstreeters that we are now bailing out. Now that the US taxpayer has bailed Wallstreet, I think we need to at least put someone in charge that we know will look out for us, the taxpayer. Elliot, are you listening? We need you!
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3 comments:
as I said when you first leaked the idea to me..brilliant.
but it raises a question--who chooses (nominates?) the head of the SEC? the president?
hard to see how Spitzer would get chosen, given his "transgressions"..and also how much he's hated on Wall St.
Andrew Cuomo has been trying to follow his example, as NY AG; he's been hitting Wall St pretty hard on the auction rate thing.
speak of the devil (so to speak)..just after posting that bit about Cuomo, I saw that McCain came out and floated his name for the SEC:
http://dealbook.blogs.nytimes.com/2008/09/22/mccain-floats-cuomo-as-possible-sec-chair/
though I also saw an article recently about how Cuomo helped contribute to the current mess, by pushing Fannie and Freddie to expand while he was head of HUD under Clinton..
goes to show how deep McCain's understanding of all this is..
Interesting speculations Suman. What I can tell you for certain is that Christopher Cox is going to be toast. Does he even know that he is being set up as the Patsy?
I would love to have been a fly on the wall during the meetings that determined some of his recent actions.
He's not a dummy, but he sure acts like one.
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