The Bush Administration was religiously anti-regulation, which translated into lack of enforcement of existing regulations and no desire for more stringent regulations. The regulatory agencies failed to do their jobs because the Bush Administration didn’t want them to do their jobs. Bank examiners can find problems all day long but their supervisors are the ones that decide how material the problems are.

I love the fact that you guys, James and Simon, still hold onto the hope that enough of us will listen and act to make a real difference. You know the old saying, “no pain, no gain,” and those who govern us will not cause pain, even if it is helpful (except by inaction, of course).

It is also fascinating that we’ve developed a culture in Washington where all regulators involved in finance apparently failed simultaneously. That’s mind-boggling to consider. How is such a culture created?

And then, how can regulators “fail” so completely – yet no one has done anything wrong? Is their failure only the failure to implement new regulations? Or is it at all possible to consider that people have actually broken existing laws as they conducted their businesses in ways that destroyed the economy?

What about insider trading? Martha Stewart spent nearly half a year in jail for insider trading (time she spent productively knitting ponchos with her cellmates.)

I’d love to know if any of the players on Wall Street are being investigated for insider trades – it does not seem outside the realm of possibility that such an activity would have happened with this crowd at this time…

And make sure that the bank examiners and their supervisors get the training that they need. It shouldn’t be necessary to send them to boot camp at the banks. A good banking school would do or at least having academics from some of the good banking and finance programs do the training.

You see I have dealt with corrupt politicians like Obama for over thirty years. I represent clients who have with greater and greater frequency who have had their finances ruined, lives destroyed and their dreams crushed by some politician and/ or bureaucrat in pursuit of some illusionary socialist utopia.
I am sick and tired of it.

Cheney , when he took office, sold his Halliburton stock and gave the entire proceeds to charity. Now Bush is a different story. He let his department secretaries run wild with little or no supervision. The cronies of W’s father who heavily influenced his administration, like Scrowcroft, Powell, Baker, Gates, etc have all sold out to either Wall Street or the Saudi’s or both. You are right, there was absolutely no good reason why the SEC relaxed bank reserve rules for the investment banks under Bush. A harebrained move if there ever was one. Ditto for the bailouts.

“Holy Crap we’re screwed. What do we do now?”

Greenspan kept interest rates too low for too long. We know that now. But is he a crook? Nah, he just screwed up. Bernanke too. Same mistake.

If McCain had been elected, would he have kissed Wall Street goodbye and let the chips fall wherever? Not on your sweet butt would he have done that. This was a wholesale run on international banking. Forget the auto industry, just about all industries would have collapsed.

Everyone in responsible positions screwed up. Pretty much all at the same time. That’s why the problem is so deep and as a result the consequences will persist for years.

How to fix all this? After having our economy almost destroyed by poor regulation, I’m guessing regulation is going to be strengthened, no matter how high the howls from investment bank/commerical bank holding companies. Some separation between commercial banking and investment banking seems a no brainer.

International supervision of leverage is needed. Standardization of some derivatives (the rest should be outlawed) is needed so that they can be traded in an open market where counterparty risk is eliminated.

So-called “shadow banking” should be yanked out of the shadows: Another move that will require international cooperation.

The government should require fiscal transparency, as well. Obama is trying to keep spending on balance sheet, but doing so identifies spending totals more so than in the past, and that frightens everyone because the totals are so high. They were high before but hidden. Nonetheless, as a practical matter it’s the right first step. We’ll have to start paying our bills and showing a willingness to sacrifice now in order to do so.

Compensation needs to be regulated. This is not an impossible task. The fact is executive pay, across the board in almost every industry, has totally gone bonkers. These pay scales are a tell that the compensation packages are not competitively set, but quite the opposite. These are pay scales of cronies helping their friends.

Self regulation ain’t going to work. The wife went out 40 minutes ago, I’ve cracked a few brewskis, an everythings becoming mush clearer.

According to the US Treasury’s TIC data, Japan had $661 billion in Treasury bonds total in Feb 2009. So these guys were carrying the equivalent of a significant proportion of Japan’s total foreign reserves in a suitcase. 20% of the total that US Treasury shows. To put it in perspective, Russia’s total holdings of US Treasuries per the same source is $130 billion.

Worth looking into, don’t you think?