Read a recent news item about some allegedly stolen/missing software which can manipulate the market. Maybe the recession recovery can be led by the owner franchising this program? Just think of 40 million market manipulators all profiting! I wonder if the original owner was/is operating a legal market manipulation?

Seriously with money dead, what then is the shape of a successful economic recovery given that replication of the economy puts us back on the same slippery slope?

Maybe teeth for the protection agency could be:

Product terms and conditions plus lender/borrower contracts to be submitted by lenders to the agency for approval. Unapproved products to remain legal contracts but unenforceable at law. This will definitely encourage lender organizations to ensure their products are approved.

State administration may be the best route but this means out of state offerings may slip through the safety net? One national administration may be most cost effective, easiest to maintain and simplest to understand? We continue to progress beyond state borders as logical boundaries of financial dealing and requisite controls. Increasingly global practices will be of concern and national reach is most probably the minimum base for protective action.

Encourage other countries to use this legislation as a model so that we can see global protection increasing? Countries refusing to approve complementary legislation may be ruled out contention for US business deals and offending deal contracts demed unenforceable. Mayb this is a day 2 item?

Warning and information website; publish names etc of organizations and unauthorised products. Highlight individual protections and assistance available.

Public awareness of committee etc action in legislation drafting and modification matters. Ease and assurance of borrower understanding and application plus cost/effective application to be strong considerations.

Annual report to the nation enabling evaluation of
legislative and agency effectiveness and fine tuniing required.

Start witha priority list of sharp practices and borrower disaster trip points and progressively implement protections.

This a quick dump of some thoughts and will need amplification and massive correction etc from the brains assembled via this blog. It would be really neat if something would come out of this and find its way in some form to the publication outfits such as the magazines/newspapers/internet news sites? A neural network product?

“Simon Johnson was Economic Counsellor and Director of the Research Department at the IMF from March 2007-August 2008.”

https://imf.org/external/np/bio/eng/sj.htm

Here’s a review (for me especially):

http://www.worldbankgroup.org/

Current(?) World Bank President Zoellick was on the board at Enron, and in addition to speaking German fluently, maintains close relations with Germany, and has received an award for his work with them.

http://www.imf.org/external/about/ourwork.htm

Here’s the fellow who seems to have SJ’s old job:

http://www.imf.org/external/np/bio/eng/ob.htm

Interesting that he is also affiliated with MIT (like SJ), who is good friends with Alfred Sloan.

First managing director John Lipsky, was with JPMorgan, Chase, and Salomon Bros. Sits on the board of the organization, NBER, that guides most of the econ/finance-related research in this country.

The Consumer Protection Agency for Financial Products is the right way to go. But most importantly, it must be administered by the individual states much like insurance companies are regulated by individual states.

Your video statement today (from a few weeks ago) that there is no hope of turning the clock back to the Glass-Steagall arrangement of 1930s thru 1999 is short-sighted. The best way to prevent a major depression, as we are in now, is to make these corporations smaller. Allowing a few small corporations/businesses to fail will actually SAVE the overall system! There is no reason that commercial banks, investment banks, and insurance companies cannot be separated. In the 1930s JP Morgan did exactly that, it split off its investment bank into a separate company in order to comply with the Glass-Steagall law. So don’t give up on this. Too-big-to-fail is another way of saying big-enough-to-control-everyone: congress and the people. Another way of viewing what has occurred during 2001-2008 is that the investment bankers migrated their high-risk world of shady deals from a population of international wealthy investors to the population of main-stream American consumers. We need a system that separates, to the extent possible, everyday financial transactions such as mortgages and credit-card purchases from the high-risk, often shady gambles of international players.

Ultimately, the real problem, and of course the solution, is found in the relationship between Congress and the corporate/business world. If the U.S. Constitution had a provision for legislation to be adopted via the initiative process, as has been incorporated into many of the state constitutions, we would be close to solving this problem or the problem would not exist. The U.S. Constitution is lacking in this regard; many countries have national initiatives as part of their constitutions. Congress does not get it! For over thirty years Congress has tilted our would-be democracy into a corporatocracy, or as you say oligarchy. It is not just financial corporations that Congress has sold out to, but also energy, health care, health insurance, big agriculture, and many other corporations that own Congress. Congress does not get it! It can not be business as usual. The paradigm of the last 150+ years where corporate money has controlled the political process cannot continue. Corporations are not citizens, they do not have a vote, and should not be allowed to control Congress nor the election process. The system is broken, but important players like Larry Summers don’t recognize this. The days of Ayn Rand inspired laissez-faire capitalism of Alan Greenspan and those that think like him are over. Lacking an amendment to the Constitution providing for a national initiative, voters must vote in progressives that will put corporations in their proper place.

I am all in favor of protecting consumers, but believe that whatever comes from any such law and concomitant regulation will have to have real teeth, and should include the requirement for counselling for larger transactions, so that there is some guarantee that consumers actually understand what they are signing.

The weak intellectual appetite of the general public for any legislation in this area is influence by media sound bites and media manipulation by big business. I expect more misinformation and duplicity, and no important legislative activity.

Too much non-sense is portrayed a commonsense. Business as usual in congress.

http://mortgage.freedomblogging.com/2009/07/13/look-whos-doing-loan-mods/13523/

Hot air… the human race has developed the ability to package and sell hot air.

(Same Barandiaran that had Simon Johnson’s job at the World Bank?)

My favorite comment of 2009! Crank up the CPAPP.