Financial Information
Conservatives, do you believe that collateralized debt obligations create too much risk in lower debt tranches?
Question : Conservatives, do you believe that collateralized debt obligations create too much risk in lower debt tranches?
and that change the capital requirements of issuers of collateralized debt instruments would be a solution to the problem?
lower debt
Best answer:
Answer by u_bin_called
ooooooh….we do just love to play with our new talking points….don’t we?
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#2 written by constitution rules 1 year ago
If you are a business major and trying to work out the problems with the technical difficulties with certain types of debt instruments and the government responsibility to mitigate the fallout, then you are part of the problem. A business that subjects itself to higher risk should be responsible for the higher risk they take and they should be compensated as to the market risk they are taking,. They should not rely on others to mitigate the risk they are taking themselves they should be held responsible for that risk and allowed the reward of such risk.
Proper notification of the risks should be required by them to all investors and penalties for lack of disclosure should be strictly enforced. End of problem. -
#5 written by rookie35m 1 year ago
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Arthur Levitt, Jr. was the longest serving head of the SEC. Do a Google search on him, see what pops up.
He was appointed by Clinton in 1993 and again in 1998. He left in 2001, so he covered the entire Clinton administration.
Levitt gave Madoff a free pass because they were both members of the Harmonie Club, a social club for the ultra wealthy in NYC.
Madoff was first reported to the SEC in 1992:
http://www.guardian.co.uk/business/2009/sep/02/bernard-madoff-sec-report
Report: Regulator was tipped off about Madoff fraud as early as 1992
“a suspicion of trouble at Madoff Investment Securities arose as early as 1992 when customers of Avellino & Bienes, a fund that invested all its money with Madoff, complained about documents making a seemingly impossible promise of “100%” safe investments. Although the SEC shut down Avellino & Bienes, the agency only made a “brief and very limited” examination of Madoff.”
Avellino & Bienes was shut down by the SEC in 1993, the year Levitt took charge.
Levitt also gave a special exemption to Enron, exempting it from accounting rules. This special exemption led directly to the Enron scam and the subsequent meltdown of the company, which took down a major chunk of the economy with it. It also led to the discovery of similar fraud at many other companies, fraud that got its start in the Clinton years.
If I was going to pick one individual who was most responsible for the rampant fraud of the Clinton years, it would have to be Art Levitt.
THE BOTTOM LINE: Rather than fixating on one single instrument, I think it would be more helpful to approach the problem as a general and widespread lack of government oversight. Existing regulations went consistently unenforced, or they were systematically dismantled, as in the case of the Glass-Steagall Act.
And most of the blame should be rightly pinned on the Democrats.