October 30, 2008
Greenspan should feel the shame of his inaction
Circa 1986 I sat high up over the New York City financial area with a prominent bank's Executive VP and Director.
He said, "Where do you think we should be looking for future profits, we'd like to have of our equity 'at play.'
I was flattered that he should court my opinion. I also remember thinking, "Half your equity at play, what are you, nuts?"
The bank is no more in existence.
The thinking that taking increasing risk in order to increase bonuses brought the system down. Paying people to book trades and make risky loans without waiting for repayment or profits to be realized created a bonus atmosphere versus a profit atmosphere.
Greenspan absolutely had to fully know of these issues.
For personal or political reasons he let the GOP/big bank's horsepucky 'no regulation' mantra rule global financial markets to the gross neglect of the world's individual depositors and pension holders, both average folks and the very wealthy.
His legacy from his time at the helm is cowardice and abject failure. I hope he can feel shame; lots of it, unregulated.
He said, "Where do you think we should be looking for future profits, we'd like to have of our equity 'at play.'
I was flattered that he should court my opinion. I also remember thinking, "Half your equity at play, what are you, nuts?"
The bank is no more in existence.
The thinking that taking increasing risk in order to increase bonuses brought the system down. Paying people to book trades and make risky loans without waiting for repayment or profits to be realized created a bonus atmosphere versus a profit atmosphere.
Greenspan absolutely had to fully know of these issues.
For personal or political reasons he let the GOP/big bank's horsepucky 'no regulation' mantra rule global financial markets to the gross neglect of the world's individual depositors and pension holders, both average folks and the very wealthy.
His legacy from his time at the helm is cowardice and abject failure. I hope he can feel shame; lots of it, unregulated.
Labels: Bernanke, bonus excess, ceo excess, Greenspan, Wall Street
