Later On

A blog written for those whose interests more or less match mine.

Bad choice for the SEC

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Pam Martens hits the nail on the head:

It took the New York Times 12 years to admit it was dead wrong to run editorials urging the repeal of the Glass-Steagall Act, the depression-era investor protection legislation that prevented Wall Street from collapsing the financial system for 75 years. (It took just 9 years from the date of repeal in 1999 for Wall Street to thoroughly corrupt the system, wreck the economy and collapse century old Wall Street firms.)

One would have expected the New York Times to have acquired a little humility from its prior ill-informed meddling with Wall Street regulation. Nothing doing. The Times, together with Bloomberg News and the Wall Street Journal have all magically decided to push Sallie Krawcheck out in front as the leading contender to become the permanent new Chair of the Securities and Exchange Commission, despite Krawcheck’s lack of a securities law degree (or any other kind of law degree), zero experience as a prosecutor, and the stench of Citigroup indelibly attached to her otherwise well-coiffed persona.

Yesterday, The Times ran a 990 word article on who it says are three leading contenders for the permanent chair of the SEC, now that Mary Schapiro has announced she will step down on December 14.  (SEC Commissioner Elisse Walter will serve as interim Chair until President Obama selects a permanent replacement.)  Out of the 990 word article, 33 words were devoted to two of the contenders: Robert Khuzami, the S.E.C.’s enforcement director, and Richard Ketchum, the head of the Financial Industry Regulatory Authority (FINRA).  The Times devoted 11 paragraphs to Krawcheck.

Two days prior, on November 26, Bloomberg News ran the headline, “SEC Needs Krawcheck, Not a Caretaker.” The Wall Street Journal, ostensibly a competitor to Bloomberg News, liked the idea so much that they amplified the idea by repeating iton their own pages, linked to the Bloomberg story, and ran with the headline: “SEC Needs Someone Like Krawcheck.”

On April 8, 1998, The Times urged the removal of the “unnecessary walls” imposed by the  Glass-Steagall Act:

“Congress dithers, so John Reed of Citicorp and Sanford Weill of Travelers Group grandly propose to modernize financial markets on their own. They have announced a $70 billion merger — the biggest in history — that would create the largest financial services company in the world, worth more than $140 billion… In one stroke, Mr. Reed and Mr. Weill will have temporarily demolished the increasingly unnecessary walls built during the Depression to separate commercial banks from investment banks and insurance companies.”

On July 27 of this year, The Times fessed up:

“Having seen the results of this sweeping deregulation, we now think we were wrong to have supported it.”

Now, just four months after its long overdue epiphany, The Times dares to hype for SEC chief a former executive from the behemoth Citigroup that did more than any other firm to wreck the structure of Wall Street, usher in the most corrupt financial era since the 20s, implode the housing market and the economy of the United States.  If there was any doubt as to the role of Citigroup in the collapse, the ultimate insider, Sheila Bair, who headed the FDIC, has solidified the facts in her recent book, Bull by the Horns. . .

Continue reading.

I don’t know which is worse: that Obama is enamored of Big Finance, or that he’s paying off campaign contributions with his appointments. In either case, this one is a Bad Idea.

Written by Leisureguy

29 November 2012 at 12:38 pm

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