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View Diary: Polyphemus (259 comments)

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  •  Clearly, yes (5+ / 0-)

    But that's just a statement of empirical fact.

    It's really been a failure of leadership at many levels (in both corporates and government).

    Also a failure of incentives - if you pay people enough to retire after three years, but those same people have a limited downside (i.e. lose their existing wealth), that drives risky behaviour.

    Not enough people stepped in to say no, and if our bank (or for government, our country's banks) falls into the middle of the financial tables then so be it.

    •  Failure in the board room (7+ / 0-)

      Failure by the stockholders themselves.

      One of the reasons people have been screaming about CEO pay off the charts is that the salaries and golden parachutes are just a symptom of too much control by the CEOs and not enough responsibility in the board rooms.

      Then, when you start plucking people from the CEO suite and putting them on your cabinet, the foxes eat the chickens.

    •  Not only did they get the leverage (1+ / 0-)
      Recommended by:

      One of the bigger trends the last decade or so came in the form of risk management with companies creating Chief Risk Officers and such. Now you would think that risk management actually meant that there was a concern that firms were being too risky and that they needed to better control it. But risk management is one of those terms like military intelligence that means the opposite.

      What happened was that instead of categorizing risk into say 6 or 7 categories they went ahead and added new categories and striations within each to create 200,300, or more slices of risk. The intent was to free up the capital that was being "wasted" (just sitting) because the firm was being too conservative. This was done by making many more things less risky than they had been previously. It has/had the unfortunate consequence of leaving little margin for error or for changes in human behavior.

      I do believe that we need to go back to a simpler time and as much as the capitalists abhor it to allow some portion of capital to be "wasted" by just sitting there. The only entity that can make that happen is the government. The money-makers have no such desires.

      What's the difference between Sarah Palin and a Moose? One has a nice rack. The other is completely full of shit!

      by MindRayge on Sun Oct 19, 2008 at 06:12:57 PM PDT

      [ Parent ]

      •  Risk management is outcome (0+ / 0-)

        based. It is either a 1 or zero. Each decision has an outcome, and it is the consequences that determine the course. The Buschcos started with altering the consequences . Phil Gramm began changing the rules of the game. (Glass-Steagall, Gramm-Leach-Baily, Commodity Futures Modernization Act, Riegle Community Act). From housing, to bankruptcy, to deregulating credit and banking rules we shifted the risks from corporate America to "we the people", the ones who really make this all work, and make all possible.

        Wealth is meaningless unless it is in your bank account, and with all the talk about re-distribution of wealth, I never thought that WS would ever be able to re-distribute imaginary wealth. My mistake, the derivative markets exceeded the money the entire world. There is no bailout correction. There is only our money in their banks.

        The key to insulate oneself against greed is to have nothing...but then came the sub-prime loan markets...and in that fleeting time people thought they were getting a piece of the pie, the liquidity was sucked from their homes and now they have nothing, just like when they started, but now they have debt burden, created from nothing. Leave it to WS and give a big assist to the Bushcos...and their Democrat enablers.

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