The costly collapse of Enron. Not to mention WorldCom, Global Crossing, etc.
The costly collapse of Fannie Mae and Freddie Mac.
The costly collapse of Lehman Brothers, Merrill Lynch, possibly Washington Mutual, etc.
The 300 point plunge on this morning's Wall Street stocks.
Plummeting bank stocks in Europe.
All, it would seem, the bastard children of Professors Phil and Wendy Gramm who have been so wonderfully kind to the U.S. economy. And to working-class Americans who are going to pay the bills to clean up the Phil and Wendy messes.
Did it all begin with a little tryst between the corporation Enron and the professorial wife of then Senator Phil Gramm of Texas?
In an apparent response to a 1992 plea from Enron, Dr. Wendy Gramm, then chair of the federal Commodity Futures Trading Commission, moved to exempt the company's energy-swap operation from government oversight. By then, the Houston-based Enron was a major contributor to Senator Gramm's campaign.
A few days after she got the ball rolling on the exemption, Wendy Gramm resigned from the commission. Enron soon appointed her to its board of directors, where she served on the audit committee, which oversees the inner financial workings of the corporation. For this, the company paid her between $915,000 and $1.85 million in stocks and dividends, as much as $50,000 in annual salary, and $176,000 in attendance fees, according to a report by Public Citizen, a group that has relentlessly tracked Enron, which in turn has called the report unfair.
Meanwhile Enron had become Phil Gramm's largest corporate contributor—and according to Public Citizen, the largest across-the board donor in its industry. Between 1989 and 2001, the company tossed Gramm just under $100,000.
http://www.villagevoice.com/...
The frosting on the cake for corporate fraud and nonsense was the crowning glory of the Gramm-Leach-Bliley Financial Services Modernization Act, (November 12, 1999), courtesy of Republican Congressman Jim Leach of Iowa and Republican Congressman Tom Bliley of Virginia, which repealed the Glass-Steagall Act of 1933.
Phil Gramm, McCain's top economic adviser, sponsored a bill that made the Glass-Steagall act much less than it was, by making it possible for large brokerage firms to act like banks, without the Glass-Stiegel regulations, leading to the chaos we have today.
http://www.mydd.com/...
A brief history of the Glass-Steagall Act of 1933:
In 1933, a few years following the stock market crash, Congress passes the Glass-Steagall Act, in hopes that regulating banks will help prevent market instability, particularly amongst Wall Street banks. The purpose of the act is to separate commercial banks that focus on consumers from investment banks, which deal with speculative trading and mergers.
The Glass-Steagall Act provided the proper oversight and entity separation that would prohibit banks and other financial companies from merging into giant trusts (conflict of interests) -- giant trusts or corporations being more powerful, naturally, and having the seemingly limitless capital to lobby their corporate interests, however, with a very myopic scope (particularly when it comes to factoring in potential losses -- most banks, as seen in contemporary times, chose not to anticipate losses in the mortgage market; they presumed home prices would continue to appreciate).
In 1999, former Senator Phil Gramm ... set out to completely gut the Glass-Steagall Act, and did so successfully, replacing most of its components with the new Gramm-Leach-Bliley Act: allowing commercial banks, investment banks, and insurers to merge (which would have violated antitrust laws under Glass-Steagall). Sen. Gramm ... had received over $4.6 million from the FIRE sector (Finance, Insurance and Real Estate donations) over the previous decade, and once the Act passed, an influx of "megamergers" took place among banks and insurance and securities companies, as if they had been eagerly awaiting the passage of Gramm's Act. Everything in between Glass-Steagall and Gramm-Leach-Bliley (i.e. Savings and Loan crisis/bust) was, in large part, the incubation period for what would take place over the nine years that would follow the passage of Gramm's Act: an experiment in deregulation.
Shortly after George W. Bush was elected president, Congress and President Clinton were trying to pass a $384 billion omnibus spending bill, and while the debates swirled around the passage of this bill, Senator Phil Gramm clandestinely slipped a 262-page amendment into the omnibus appropriations bill titled: Commodity Futures Modernization Act. It is likely that few senators read this bill, if any. The essence of the act was the deregulation of derivatives trading (financial instruments whose value changes in response to the changes in underlying variables; the main use of derivatives is to reduce risk for one party). The legislation contained a provision -- lobbied for by Enron, a major campaign contributor to Gramm -- that exempted energy trading from regulatory oversight. Basically, it gave way to the Enron debacle and ushered in the new era of unregulated securities. Interestingly enough, Gramm's wife, Wendy, had been part of the Enron board, and her salary and stock income brought in between $900,000 and $1.8 million to the Gramm household, prior to the passage of the Commodity Futures Modernization Act.
http://losangeles.injuryboard.com/...
The Gramms have grown richer and fatter as the little bastard (the out-of-wedlock love child conceived of the tryst between Wendy and Enron?) they parented also flourished like a ravening cancer with worldwide consequences:
"Black Monday? Try Blacker Than a Dark Cellar at Midnight Monday," said Mark Priest, senior trader at ETX Capital.
http://www.ft.com/...
Banking stocks continued to fall across Europe as Wall Street’s major institutions joined the frantic sell off in the wake of the Lehman Brothers collapse and Bank of America’s bid for Merrill Lynch.
.... Dow Jones Industrial Average down 330 points or 2.9 per cent to 11,079.37. The broader-based S&P 500 was 2.9 per cent weaker at 1,215.77.
Goldman Sachs fell 5.6 per cent to $145.7 and Citigroup lost 7.2 per cent to $16.70. Merrill Lynch traded at a 13 per cent discount to Bank of America’s offer price.
American International Group was the hardest hit on fears about its own underlying financial health. Its shares fell 50.6 per cent to $6.
In the UK, HBOS, the country’s biggest-listed mortgage lender, was 17.4 per cent lower at 233p as investors continued to worry about its own capital position. The bank was the biggest faller on the market. Barclays , which had considered bidding for Lehman, lost 10.1 per cent to 315p, Royal Bank of Scotland fell 8.9 per cent to 213½p. Standard Chartered was 4.2 per cent weaker at £13.80.
The picture was the same across the continent. Deutsche Bank lost 4.7 per cent to €55.2 and France’s Crédit Agricole fell 9 per cent to €12.80. UBS was 1.9 per cent lower at SFr21.60. Société Générale was 8 per cent lower at €59.89.
.... Frankfurt-listed shares lost 31.1 per cent to €6.30 ahead of the opening in New York.
Friends Provident was one of the biggest fallers on London’s FTSE 100, on fears about the extent of the spread of the contagion in the sector. Friends was 11.4 per cent lower at 87.6p, while Aviva lost 6.2 per cent to 500.9p. RSA Insurance was 3.6per cent weaker at 152.2p. Old Mutual fell 9.9 per cent to 88.4p.
.... Icap, London’s biggest interdealer broker by market value, fell 11.9 per cent to 430½p. Man Group, the world’s largest-listed hedge fund again by market capitalisation, was 10.2 per cent lower at 461.3p.
Meanwhile the scream of right wing cranks is about lipstick!:
While Rome Burned... They Talked About Lipstick
http://www.huffingtonpost.com/...
Which lists a number of things we ought to be concerned about, as opposed to that pork hog with lipstick Sarah Palin.
How very much I should like to gather up all the worthless stocks generated by the corporate trysts of Phil and Wendy, how I'd like to pile up all that paper around a stake, a burning-at-the-stake party with Phil and Wendy Gramm as the guests of honor. It could be ignited with the now worthless U.S. dollar soaked in Exxon Oil.
Footnote: It appears that Gramm's "little?" 262-page amendment, Commodity Futures Modernization Act, laid the groundwork for the energetic speculation in oil which has fueled the rise in cost of oil per barrel, as well as the price of gas out of the pump.