Lecture on executive pay and the crisis

[Razgovory]

Yi disagrees.

[Ideologue]

IMO Martinus is right. 

I know.  It's weird.

If anything, financial misdeeds have become over-criminalized in the US in recent deeds.

How about extrajudicial methods?

Just kidding...

[fhdz]

Yi disagrees.

Has he hired you to dispense opinions on his behalf, like a personal assistant?

[Razgovory]

Yi disagrees.

Has he hired you to dispense opinions on his behalf, like a personal assistant?

No, he hired me to post silly shit to make him look good.

[fhdz]

No, he hired me to post silly shit to make him look good.

That sounds like a pretty fun job, honestly.

[Razgovory]

No, he hired me to post silly shit to make him look good.

That sounds like a pretty fun job, honestly.

Seedy cuts a check to Tim every month for that.

[fhdz]

I don't think you can do that, at least not since the S&L crisis.

You can. The law prohibiting it was repealed in 1999 by the passage of the Gramm-Leach-Bliley Act.

[The Minsky Moment]

I don't think you can do that, at least not since the S&L crisis.

You can. The law prohibiting it was repealed in 1999 by the passage of the Gramm-Leach-Bliley Act.

Not exactly.
GLBA allowed the holding companies of deposit-taking banks to do investment banking through non-bank affiliates.  It also permitted national banks to conduct investment banking-type activities through separately capitalized subs.  So technically speaking, depositor money is still walled off in separate entities, and depositor cash cannot be used to fund investment banking activities directly, although the commercial bank can be used as a kind of reverse source of strength to bolster the investment bank affiliates.

Key thing to keep in mind is that Glass-Steagall did not prevent deposit taking banks from engaging in the securitized mortgage business or invested in mortgage backed securities.   It is also true that Glass-Steagall repeal cannot be blamed for the collapses of Bear Stearns, Lehman, or Merril Lynch (all dedicated investment banks) or AIG (an insurance company).  A feature of the latest crisis is that old-style bank runs were not a serious problem and although the FDIC fund went into significant deficit at the height of the crisis, it was later replenished by the banks.

[DGuller]

Yeah, that's what I thought as well, though I wasn't very sure, so I just waited for JR to chime in.  Letting banks invest speculatively with federally insured money is a concept so stupid that even Republicans wouldn't allow it.  Again.  At least for now.

[Razgovory]

Yeah, that's what I thought as well, though I wasn't very sure, so I just waited for JR to chime in.  Letting banks invest speculatively with federally insured money is a concept so stupid that even Republicans wouldn't allow it.  Again.  At least for now.

But they still want to put Social Security in the Wall Street Casinos.

[Admiral Yi]

But they still want to put Social Security in the Wall Street Casinos.

Yup.  Put everybody's money into options and futures.

[DGuller]

Yeah, that's what I thought as well, though I wasn't very sure, so I just waited for JR to chime in.  Letting banks invest speculatively with federally insured money is a concept so stupid that even Republicans wouldn't allow it.  Again.  At least for now.

But they still want to put Social Security in the Wall Street Casinos.

Well, Republicans aren't 100% against socialism.  They're more like 99% against socialism.

[fhdz]

But they still want to put Social Security in the Wall Street Casinos.

Out of curiosity, Raz, what's your plan for making Social Security solvent?

[Ideologue]

But they still want to put Social Security in the Wall Street Casinos.

Out of curiosity, Raz, what's your plan for making Social Security solvent?

Would you like to hear my plan for making Social Security solvent?

[fhdz]

Would you like to hear my plan for making Social Security solvent?

Yes. Does it involve killing a bunch of elderly people?