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View Diary: VIDEO from 1999: Byron Dorgan vs. Gramm Leach Bliley-- WOW (197 comments)

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  •  WOW is right! Rec this up so all can see! (36+ / 0-)

    My brother ran the division which managed the bond portfolios for a major bank and its customers.

    Over three years ago, he revealed to me that he was immensely troubled because of the unsustainable risks that were being taken, and a bank that REALLY didn't want to hear about it, even though it was his job and his fiduciary responsibility (supposedly, in an honest world) to warn them about it.

    The problem, of course, was that if they knew of the ballooning risk, then they could not make those investments for the pension and endowment portfolios that they were managing, so the bank wanted him to shut up. "Everyone is doing it," was their answer, "and if we can't promise them the returns of those investments, they'll just take their business to another bank who will."

    He was really disturbed, although at the time, I thought that he was maybe "over-worrying." I asked him, "what do they say when you tell them what you think COULD happen?"

    He told me, "that's what bothers me the most. They say, 'well, in that case, we're ALL fucked,' like that makes it OK." Finally, it reached the point that he just couldn't live with himself, watching it happen. He resigned early last year, and is not the slightest bit mollified by his former team calling him and saying "wow, you were right."

    But he's spent time with me explaining how it all worked, and at least I have come to understand a great deal more about it. What an educational thing to see Brian Dorgan predicting what happened -- making it obvious that it didn't take an economist to game it out and see what the effect of that stupidity would be.

    "I believe that some fine day, the children of Abraham
    will lay down their swords forever in Jerusalem."

    by Ducktape on Tue Apr 07, 2009 at 10:54:38 PM PDT

    •  Interesting post - Thx ducktape :) n/t (4+ / 0-)
      Recommended by:
      Ducktape, alkalinesky, skymutt, JesseCW

      "....Money speaks for money, the Devil for his own... Who comes to speak for the skin and the bone?"

      by LeftOverAmerica on Wed Apr 08, 2009 at 01:13:11 AM PDT

      [ Parent ]

    •  I think everyone knew that the party would end (4+ / 0-)

      eventually.  What I don't think most people who were pushing the risk-taking forward counted on was having the party end in just under ten years.  I think they thought they had at least a few decades to get in and get out before there was a collapse as spectacular as this one.

    •  Please diary that (3+ / 0-)
      Recommended by:
      Ducktape, Pohjola, alkalinesky

      or get your brother an account here and have him diary it.

      I'd love to hear an inside account.

      [F]or too many, the cruelty of our system is part of its appeal. - eightlivesleft

      by oldjohnbrown on Wed Apr 08, 2009 at 08:08:48 AM PDT

      [ Parent ]

      •  We're trying to work on something about it. (3+ / 0-)
        Recommended by:
        oldjohnbrown, Pohjola, alkalinesky

        We've been working on an attempt to describe how the whole thing (from basic money on up) worked, in a simple (as possible) animated presentation (although I don't know if we could top the one at http://www.crisisofcredit.com/).

        I don't think I can get him to post here himself about the "insider scoop," but I might be able to interview him about it for a diary. I'll talk to him and see what he thinks.

        If anything, to me it points out the compelling need for really good oversight and regulation, because when there are laws that are not enforced, it tilts the playing field in favor of those who are willing to break them, and puts those who want to play by the rules between the rock of breaking them and the hard place of losing their customers to those who will if they try to play by the rules.

        "I believe that some fine day, the children of Abraham
        will lay down their swords forever in Jerusalem."

        by Ducktape on Wed Apr 08, 2009 at 09:22:16 AM PDT

        [ Parent ]

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