Comments on: Eleven Step Financial Reform Proposal

By: Dave Raithel

Dave Raithel — Fri, 14 Nov 2008 21:32:00 +0000

“…design performance benchmarks that discourage herd behaviour.”

Believe me, one has no future, no security, no portfolio, if one does not go along with the herd at crucial times of one’s life.

So, management will be “staffed” with iconoclasts, rogues, anti-heroes, and “mavericks”, their eyes opened for the non-conformist whose performance is … making money in ways nobody expects? (Calls to mind the Lewis article in Portfolio linked the other day.)

I get the idea of driving 5 mph more or less than the traffic surrounding me – I am safer the greater my distance from those around me. I have no clue how this translates into institutional money making …

By: Per Paterson

Per Paterson — Fri, 14 Nov 2008 18:55:00 +0000

It is all a bunch of new rules, making things even more complex, to avoid the FED FIAT-money low interest eternal economic boom polices, no one is suggesting to cancel the federal banking system and go back to gold as world currency and let the market determine the interest rate.

Time for a honest monetary system no government can manipulate and lets us learn to live with rising prices in bull times and falling prices in bear times, both will be much more stable then with FED creating huge bubbles.

By: Carlosjii

Carlosjii — Fri, 14 Nov 2008 18:22:00 +0000

these financial turkeys need a 12 step program not an 11 step program

Sorry to be snarky

By: Jim

Jim — Fri, 14 Nov 2008 18:20:00 +0000

Bankruptcy is the best regulator.

Oh, and give us back our no-counterparty-risk money: gold.

By: tv

tv — Fri, 14 Nov 2008 17:36:00 +0000

Forcibly turn banks and systemic financials into conservative Utilities as the Primary Intention.

Doing so, all else aligns.

Frankly, do it to the entire FIRE based economy.

By: tompain

tompain — Fri, 14 Nov 2008 17:14:00 +0000

I would add one: ban collateral requirements from being triggered by rating agencies. Insist instead that such triggers be based on objective and transparent measures of creditworthiness. I would also consider banning collateral requirements in certain instruments from being triggered by market price declines in those instruments. Any such ban could allow an opt-out by the parties but an opt-out should require higher capital ratios against the obligations in question.

By: Anonymous

Anonymous — Fri, 14 Nov 2008 15:29:00 +0000

number seven is not possible. Great in concept, but how would it practically be done? I have worked in regulated industry (pharma) and agree that more understanding between the two groups would foster better environment, but not sure how it can really be accomplished….

By: Anonymous

Anonymous — Fri, 14 Nov 2008 13:08:00 +0000

Every single one is too difficult to regulate and hence subject to the whims of the corporation and it’s executives. There will be more opportunities to fudge the numbers. Bottom line is that macro policies are easy to implement, whereas micro policies rely on the honesty of the executives. We know where honesty has led us so far.

By: Anonymous

Anonymous — Fri, 14 Nov 2008 11:45:00 +0000

There is only one plan that will work. Let insolvent, un-profitable over leverage banks, companies, hedge funds, individuals, and countries all Fail by allowwing asset prices fall to their income supported level. THe bad debt need to be liqidated and the ones who owe it need to take their lumps. Ain’t gonna happen though so it’s going to be a lot worse then necessary but that’s the nature of the political beast.

By: Anonymous

Anonymous — Fri, 14 Nov 2008 11:00:00 +0000

I want my “FREE-MARKETS BACK!” Give me the chance to become rich and, or poor. There is no place for the free-thinker in the land of Mediocrity.