Well, I have heard and read more about high profile arrests and jail sentences/ life long barring from rejoining the securities industry 10-20 years ago than in our times. Private Equity/LBO market abuses, investor misguidance by research analysts, traders who hid or misstated losses, to name just a few.
Derivatives: The Unregulated Global Casino for Banks
- Thread starter Banjo
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fine analogy, except animal kingdom is ruled by the smartest (especially in the ocean), strongest, most courageous. Not the ones that displays the most cowardice and not the one that can be characterized as the lone wolf, annihilating everyone around them for fear of not getting enough into once own throat. Heck I am a super libertarian but we have completely lost control and ethical values are out the window as if they are ever non-existent.
Quote from Banjo:
I have to agree with ghoulish Marty here, it's a philosophical problem at the root. All the rest are deriviatives of the base philosophy.
Predators and prey, welcome to the world of the human animus.
Nature simply looks for the survivor.
Yes, that's right... However, these are all ideas that aren't practical, precisely because there's no political consensus that's sufficient to implement them.
Yep, I think that's a viable step... I, personally, would also be very much in favor of some measure of personal liability for directors. IMHO, that's the weakest link in corporate governance. Especially, in light of the Bob Diamond/Barclays shenanigans this week.
Yes, that's also viable... Glass-Steagall all the way and make the deposit-taking, FDIC-insured institutions into utilities that are extremely tightly governed, with all sorts of compensation rules etc. Investment banks, on the other hand, should eat what they kill and enjoy no government backstops whatsoever. There would have to be a mechanism to limit their size and prevent excessive concentration, though.
and there will never be until someone in politics is willing to clean house of which we are far far away. Agree everything beyond that is philosophical and thus I politely bow out of the discussion. Thanks for sharing your views Martinghoul.
which will lead straight to the next huge hedge fund collapse as investors see such vehicles as the only ones left to chaise yield.
I am not into blanket regulating everything around us, but if we would persecute wrongdoing and punish it much more severely that would certainly help I think. In the end its all about expected payoff. If it comes down to a probabilistic zero sum game then quite a few would think twice before selling more crap to unassuming retail clients or misinformed commercial counter parties.
I am not into blanket regulating everything around us, but if we would persecute wrongdoing and punish it much more severely that would certainly help I think. In the end its all about expected payoff. If it comes down to a probabilistic zero sum game then quite a few would think twice before selling more crap to unassuming retail clients or misinformed commercial counter parties.
My thanks also for an interesting discussion, indeed...
Yes, but there's a difference, LTCM notwithstanding... Hedge funds go down all the time and, as long as they don't get bailed out by the taxpayer, that's perfectly fine. Moreover, there appears to be a natural limit to the amount of assets a single hedge fund can manage. Also, the barriers to entry in the HF industry are much lower, which means that it's much more competitive. So I really don't think a large hedge fund collapse would be such a big deal, actually. This is where the Volcker Rule is actually having a really positive effect, IMHO, as the prop activities are migrating to a setting where there's real competition. Obviously, if the hedge fund industry gets as concentrated and oligopolistic as the banks, things will have to change.