Sunday, October 25, 2009

Brooksley Born : The Real Cassandra of the Financial Crisis

In 1997, Brooksley Born was appointed by Bill Clinton to run the CFTC (Commodities Future Trading Commission), a financial regulatory agency. Realising that banks were not disclosing OTC derivativies trades she proposed to bring them under the federal regulatory system. Powerful Wall Street financial institutions opposed her proposal and lobbied against it. Alan Greenspan(then Fed Chairman), Larry Summers ( Deputy Treasury Secretary), Robert Rubin (Treasury Secretary) and Arthur Levitt (SEC chairman) tried to get her to back down. When she refused, these powerful men went to Capitol Hill to shut her down and took away the CFTC's right to regulate derivatives. Born was forced to resign from her post and the seeds of the financial crisis were sowed. This is her story.

The full PBS video is found here.

Below are the sneak previews:



Here story tells us why dissenting voices should never be repressed and great damage
can be brought about by powerful intelligent men driven by an common ideology.

"I've come to know her as one of the most capable, dedicated, intelligent, and committed public servants I've ever come to know. I wish I knew her better in Washington. I could have done much better. I could have made a difference."
- Arther Levitt on Brooksley Born
We have well paid regulators in Singapore but none of them with the courage and foresight to stop those toxic structured products from coming to our shores. At least Arthur Levitt admitted that he could have done better. Today to generate more trading income and encourage more hedge funds to set up shop here, we allow dark pools[Link] as regulators in other countries express concerns about these trades[Link]. As we go along the deregulation path, there are many lessons to be learnt.

11 comments:

Anonymous said...

Everything goes according to plan by the illuminati.

Anonymous said...

Actually the US political system is built on the power and influence of Wall street movers and shakers.

Who financed President Obama's election campaign? Who are the key people in his cabinet and their background? Despite the stock market boom, why is the US unemployment still so high and not improving?

Sometimes it is said that who fills the post of US President is not really important. He may need to be just a congressman, mayor, governor, ex President's wife or even actor, etc who is willing and has support from powerful quarters to run for the post. It is the behind the scenes action that counts and that's where the real thing and people is. And these people do not like to be in the limelight as President but behind the scenes.

Anonymous said...

Actually the US political system is built on the power and influence of Wall street movers and shakers.

Who financed President Obama's election campaign? Who are the key people in his cabinet and their background? Despite the stock market boom, why is the US unemployment still so high and not improving?

Sometimes it is said that who fills the post of US President is not really important. He may need to be just a congressman, mayor, governor, ex President's wife or even actor, etc who is willing and has support from powerful quarters to run for the post. It is the behind the scenes action that counts and that's where the real thing and people is. And these people do not like to be in the limelight as President but behind the scenes.

Ghost said...

Sorry but what the hell does the gender war has to do with the finance crisis? Who cares if this women is part of the 'gender war'? The preview had 2-4 mins on something that has nothing to do with the crisis. Terrible preview.

Anonymous said...

hi lucky, can you give us your views regarding the "share market top" prediction you made 2 weeks ago? or have you changed your mind?

Anonymous said...

Horrors!

Seems like our little Lee (the finance minister at that time) is still totally sold on Greenspan's "the markets will regulate themselves" belief.

In the full video, Greenspan actually admitted to a hearing that his guiding idealoy for over 40+ years is WRONG.

Now we need to see little Lee admit that his guiding idealogy to take some responsibility for allowing the Lehman Brother's bonds to be sold here.

This is the least that any consciounabe leader should do.

LuckySingaporean said...

anon 19:58,

Identifying the top is hard. I'm quite sure we are 'near' the top. It has either been formed already or will be formed in the coming weeks. Will there be a final all out run up to the end or this is all there is to the rally?

This rally is largely driven by liquidity much of which is ending or has ended.

The top would have been more easily identified if there was a euphoric final run-up equivalent to capulative selling we see at bottoms.

I'm considering unloading what I've to sell systemetically in batches if I can't time it properly.

Anonymous said...

"The top would have been more easily identified if there was a euphoric final run-up equivalent to capulative selling we see at bottoms."

well said and thanks for sharing your opinion lucky.

spotting the top is just as hard as spotting the bottom. sigh.

not a bear here so i'm not hoping for a crash but a near-term correction would be good otherwise i find it hard to believe that the market can continue its uptrend.

Anonymous said...

Just a note. There's 1 foreign insurer in Singapore who recently made the change to ONLY accept applications from Singapore, Taiwan and Hong Kong.

Oddly, the minibond incident affected the same 3 countries due to lax oversight by authorities.

Anonymous said...

hi lucky, good prediction on the market top. correction has started early this week.

now comes the 2nd difficult part, guesstimating the bottom!

keep those views coming. love reading them.

WL said...

Readers may also want to view Fall of the Republic on Youtube to understand the bailout of the banks.