The heads of the surviving, large Wall Street investment banks testified before the Financial Crisis Inquiry Commission – a group chartered by Congress to look into the causes of the 2008 financial collapse. Bankers acknowledged that their companies took excessive risks in the years leading up to the crisis . . .
Hat tip V
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof. —John Kenneth Galbraith
Retail Sales in Jan rose .4% headline m/o/m, .7% ex auto's, .6% ex auto's and gasoline and .7% at the core. The headline figure was less than expected while the rest were slightly better. But, with respect to non headline sales, because Dec figures were revised lower, taking the two months together were about in line with forecasts overall. Sales rose in electronics, building materials, food/beverages, clothing, sporting goods, dept stores and restaurant/bars and fell interestingly for online retailers, health/personal care, furniture and motor vehicle/parts. Bottom line, headline sales were below expectations due to the greater than expected fall m/o/m...
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January 16th, 2010 at 12:27 pm
If you watch this, make certain to watch the 2nd panel’s testimony to put this first panel of bankers into better perspective – http://www.cspan.org/Watch/Media/2010/01/13/HP/A/28382/Financial+Crisis+Inquiry+Commission++Day+One.aspx
Kyle Bass and Peter Solomon’s comments are particularly insightful, especially in regard to the amounts of leverage granted these institutions, noting Blankfein’s comment that Goldman was more prudent than others by maintaining leverage ratios that were in the “low 20′s” (i.e. 20:1) rather than the “30′s” of others.
January 16th, 2010 at 1:02 pm
Unfortunately those banksters still hold to the lie that they could not have possibly seen this catastrophe coming despite the fact that many lessor paid (and even unpaid) individuals did in fact see it coming.
And they still think they deserve big paychecks!
January 16th, 2010 at 1:39 pm
Vice chair Bill Thomas kicked off the hearings using the iceberg anology, mentioned the berg 7/8 rule under the water, and now we’ll look at the top 1/8 today.
The authority to authorize began back in 2000 to 2001, I wonder if the commission will go all the way back to the bottom of the berg to discover the single authority and trigger point?
If you’ll look that far back, it was like the doors of an armored vehicle flying open while in motion. Many suspects scooped up the wads of money and just couldn’t perform Boy Scout principles.
Greed became good.
January 16th, 2010 at 3:21 pm
I watched this while concurrently reading “Too Big to Fail.” I’ve just downloaded “Bailout Nation” to my IPod so I can round out my nausea. Who would give ME 20:1 leverage?
January 16th, 2010 at 4:50 pm
I would higly recommend the reading of Sheila Bair’s testimony, a hefty 56 pages, which provides
one of the best descriptions I have read on the subject: http://www.fcic.gov/hearings/pdfs/2010-0114-Bair.pdf
January 16th, 2010 at 7:14 pm
Why do we call banks that are too big to succeed too big to fail?
Why dow we call trading firms like Goldman Sachs banks?
January 17th, 2010 at 4:17 am
without a doubt, the BEST deconstruction of the Meltdown of ’08 is by Nomi Prins in her, “It Takes a Pillage.” why? because she was an insider – at both Bear and Goldman.
krugman, roubini, sorkin, they’re all narrators and/or way too obtuse. besides professor william black, it’s not even close. Prins delivers in clarity and accuracy the hows and whys. My top recommendation.