Paul Volcker, President Obama’s special advisor on financial regulatory reform, appears to have endorsed the main bill sponsored by Sen. Chris Dodd of Connecticut. Although details are still being worked out, Congress is moving to pass the bill by the end of the month. Read more »
In his early experiments, Harry Harlow gave infant monkeys a choice between a chicken-wire “mother” who gave milk and a terrycloth “mother” who did not. Finding that the monkeys preferred the terrycloth mother, he concluded, contrary to conventional wisdom at the time, that the relationship of a primate infant with its mother rests more upon comfort than upon food. Dr. Harlow’s early experiments tested a clear hypothesis. They were controlled. They produced interesting results, useful to our understanding of human psychology. The early experiments influenced a generation of research psychologists and arguably changed the way we raise our children today. But Dr. Harlow didn’t stop there. For the next twenty years, he continued experimenting with monkeys. He tested their social development for progressively more abstract traits, under varying conditions of privation, progressively more severe. His later experiments comprised torturing monkeys as an end in itself. Read more »
Got to give it up for Volcker, who, despite growing uproar against his proposed eponymous rule, is soldiering on, saying it’s the best thing that ever happened since well, ever. Volcker is however getting increasingly frustrated and said he is “very disturbed” by the level of dysfunction in Capitol Hill and the Senate, and basically, WTF is going on with these people who can’t get things done?
In a CNN interview yesterday, Volcker said that regulators screw up big time in the years leading to the crisis, as a) they weren’t “on top” of anything and b) they didn’t understand what was going on anyway, relying on “somebody down in the bowels had it under control.” Also financial innovation sucks. The only innovation that has added value recently, is the ATM machine.
The Volcker Rule is not gaining popularity, with many people distancing themselves from the proposal- with Senator Dodd most recently saying the thing’s a bad idea. A source close to the matter tells us that now, chances for it to be enacted are getting very slim and that even Barney Frank is sort of, “not enthused” with it either. According to the source, Frank’s beef is that he doesn’t understand why the White House is making such a push, as regulators would have the authority to implement the proposed changes, and he’s questioning the necessity for Congress to revisit it. “It was s political move in the sense that the more you band against big banks, the more you help yourself politically. But they miscalculated on that one, ’cause it wont be beneficial for them in the end.”
The Volck-Man, who will testify later today before the Senate Banking Committee on his prop trading rule, would first and foremost like everyone to understand that the rule is part of a broader structural reform, which he summarizes elegantly this way: The idea is that a designated agency be provided authority to intervene and take control of a major financial institution on the brink of failure. The mandate is to arrange an orderly liquidation or merger. In other words, euthanasia not a rescue.
Yesterday, Time named Ben Bernanke Person of Year. This news didn’t sit right with country reporter Charlie Gasparino. Any old hobo would’ve been a better choice, but as luck would have it, Chaz has someone in particular in mind, who is more deserving of the award. And that, CG says, is Charlie Gasparino.