"Although a recession in the developed world is now more or less inevitable, China, India and some of the oil-producing countries are in a very strong countertrend. So the current financial crisis is less likely to cause a global recession than a radical realignment of the global economy, with a relative decline of the US and the rise of China and other developing countries. The danger is that the resulting political tensions, including US protectionism, may disrupt the global economy and plunge the world into recession or worse."

George Soros Financial Times December 15, 2008

Alliance For Economic Stability

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“Evil and folly have crept into our system at steadily increasing amounts. …….And it will be politically hard to remove from the system the evil and folly that helped create the mess, because the people who make a lot of money out of the system as it is have a lot of political power and they don't want it changed."

CNBC Interview at Berkshire Hathaway May 1, 2009 Annual Shareholder’s Meeting. Charlie Munger, Vice Chairman Berkshire Hathaway
 

“First, we have endorsed the creation of a single financial markets stability supervisor…Second, the industry strongly supports the administration’s proposal for a public-private partnership to absorb troubled assets…Third, it is clear the complexity of some financial instruments went too …Markets themselves have also imposed some much-needed discipline, declaring the end of complex and confusing products such as collateralised debt obligations squared….Finally, we firmly believe that there have been excesses on the compensation front….compensation should not encourage excessive risk-taking, but should promote business sustainability and be aligned with the best interests of shareholders, the financial system and the economy.”

Timothy Ryan, President and Chief Executive Officer. The Securities Industry and Financial Markets Association (Sifma). June 8, 2009
 

“For 20 years we have used performance-enhancing drugs.  The economy has had a heart attack. Once we get out of the hospital, which we haven’t yet, we will have to learn to do without. That means slower growth.”

Paul Achleitner, Chief Financial Officer. Allianz Group. At World Economic Forum in Davos 2010. January 28, 2010
 

A senior banker put it to me more bluntly: “I can find a way to say that virtually any trade we make is somehow related to serving one of our clients. They can go ahead and impose the rule on Friday, and I can assure you that by Monday, we’ll find a way around it. Nothing will change unless the definition is ironclad.”

Andrew Ross Sorkin, Deal Book Colummnist. New York Times article "Bankers in Davos Seek a United Message on Volcker Rule". February 1, 2010
 

I am not so naïve as to think that all potential conflicts can or should be expunged from banking or other businesses.  But neither am I so naïve as to think that, even with the best efforts of boards and management, so-called Chinese Walls can remain impermeable against the pressures to seek maximum profit and personal remuneration.

Paul A. Volcker. Testimony Before the Committee on Banking, Housing and Urban Affairs. February 2, 2010
 

"When they win they walk off with the profits*, when they lose the taxpayer pays.  We really need to go more directly at these issues like incentives."

Joseph Stiglitz, Nobel laureate economist. (* Note Mr. Stiglitz assumes that reported profits are real.  In the subprime case no profits were actually realized until the Federal government intervened with taxpayer funds.)
 

“I was not involved in any of the decisions made with respect to those payments, nor was I involved in any of the decisions about A.I.G.’s public disclosure of those payments…Those matters were handled by the Federal Reserve Bank of New York and the Federal Reserve Board. They sought to make appropriate decisions on those matters.”

Hank Paulson. Former Head of the Treasury and Goldman Sachs. Prepared Testimony Before the House Oversight and Government Reform Committee. January 27, 2010.

 

 

“AIG’s…actual and expected losses on subprime mortgage-backed securities and credit default swaps on [subprime]… threatened to force it imminently into bankruptcy.”  Later, “AIG built up its concentrated exposure to the subprime mortgage market largely out of the sight of its functional regulators.”

Ben S. Bernanke, Chairman of the Federal Reserve. Prepared Testimony Before the Committee on Financial Services. March 24, 2009

 

 

"the best response to the housing bubble would have been regulatory…[s]tronger regulation and supervision aimed at problems with underwriting practices.."

Ben S. Bernanke, Chairman of the Federal Reserve January 3, 2010
 

"Americans who have lost pay, jobs, homes and savings are either patronized or drowned out entirely by a political system where the banking lobby rules in both parties and the revolving door between finance and government never stops spinning."

Frank Rich The New York Times January 10, 2010
 

"What you have to change in Wall Street is you have to make sure that in addition to carrots, there are sticks. And it can’t be a one way street where they are making ungodly amounts of money when things are good and then they move on to someplace else for a while when things are bad.”

Warren Buffet Business Wire Interview October 20, 2009
 

"The intersection of money and politics is toxic.”

Allan Larson Transparancy International
 

"[o]nly actively engaged citizens can bring about a restoration of accountability, transparency and integrity in public life."

Allan Larson, Chairman Transparancy International February 19, 2009
 

"Although a recession in the developed world is now more or less inevitable, China, India and some of the oil-producing countries are in a very strong countertrend. So the current financial crisis is less likely to cause a global recession than a radical realignment of the global economy, with a relative decline of the US and the rise of China and other developing countries. The danger is that the resulting political tensions, including US protectionism, may disrupt the global economy and plunge the world into recession or worse."

George Soros Financial Times December 15, 2008
 

"As is always the case with regulation, the devil is in the details”

Joseph Stiglitz, Nobel laureate economist Reuters Insider TV January 21, 2010
 

“We have prostituted our standards of securities underwriting and sales of securities to investors. When the Street starts justifying stuffing customers and saying, ‘It’s O.K., caveat emptor,’ that requires a public policy response. We need to say to the Street, ‘In all the things you do, especially if it is sold to a pension fund, you have a duty of care to every party in the transaction.’”

Christopher Whalen, Editor of Institutional Risk Analyst New York Times article "Resetting the Moral Compass" January 23, 2010
 

“Tim Geithner helped steer the financial sector and the entire economy through the worst crisis since the Great Depression. He’s not going anywhere.”

Rahm Emanuel, U.S. President Chief of Staff New York Times article "For Top Economic Aides, a Shaky Week in Office" January 25, 2010
 

“Taxpayer money should not have to spent to save a mismanaged and misguided enterprise. But the fundamental problems lies not in how we intervened, but in why we needed to intervene.”

Hank Paulson. Former Head of the Treasury and Goldman Sachs prepared testimony Before the House Oversight and Government Reform Committee. January 27, 2010.

 

 


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