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Wall Street's latest major paradigm shift in the last week

Discussion in 'Sports and News' started by Simon_Cowbell, Sep 22, 2008.

  1. Simon_Cowbell

    Simon_Cowbell Active Member

    Sorry if this may be a d_b

    Radical Shift for Goldman and Morgan

    The New York Times
    Published: September 21, 2008

    Goldman Sachs and Morgan Stanley, the last big independent investment banks on Wall Street, will transform themselves into bank holding companies subject to far greater regulation, the Federal Reserve said Sunday night, a move that fundamentally reshapes an era of high finance that defined the modern Gilded Age.

    The firms requested the change themselves, even as Congress and the Bush administration rushed to pass a $700 billion rescue of financial firms. It was a blunt acknowledgment that their model of finance and investing had become too risky and that they needed the cushion of bank deposits that had kept big commercial banks like Bank of America and JPMorgan Chase relatively safe amid the recent turmoil.

    It also is a turning point for the high-rolling culture of Wall Street, with its seven-figure bonuses and lavish perks for even midlevel executives. It effectively returns Wall Street to the way it was structured before Congress passed a law during the Great Depression separating investment banking from commercial banking, known as the Glass-Steagall Act.

    By becoming bank holding companies, the firms are agreeing to significantly tighter regulations and much closer supervision by bank examiners from several government agencies rather than only the Securities and Exchange Commission. Now, the firms will look more like commercial banks, with more disclosure, higher capital reserves and less risk-taking.

    For decades, firms like Morgan Stanley and Goldman Sachs thrived by taking bold bets with their own money, often using enormous amounts of debt to increase their profits, with little outside oversight.

    Full story:

  2. pallister

    pallister Guest

    Re: Wall Street's latest major paradigm shift in the week of last week

    Do you mean "wake?"
  3. Football_Bat

    Football_Bat Well-Known Member

    The Fed delivers a great big F.U. to Phil Gramm.
  4. PeteyPirate

    PeteyPirate Guest

    In a related story, Goldman Sachs ordered 500,000 toasters today.
  5. hondo

    hondo Well-Known Member

    Dems fault, according to this:

  6. Oz

    Oz Active Member

    From the shirttail on that column ...

    "He is an adviser to Republican Senator John McCain of Arizona in the 2008 presidential election."

    ... so of course it's the Dems' fault. I would be shocked if he came up with any other answer there. I'm sure it's also their fault for socializing a large segment of our economy last week, too.
  7. 2muchcoffeeman

    2muchcoffeeman Active Member

    As I pointed out on the other thread, the American Enterprise Institute is a major architect of the Dubya administration's domestic policy.
  8. Football_Bat

    Football_Bat Well-Known Member

  9. hondo

    hondo Well-Known Member

    Obama has no room to talk with Franklin Raines anywhere near his campaign...

    Great moment on CNN tonight. A contributor (forgot his name), who is African American more or less said Obama and McCain are both full of shit, because instead of promising this and attacking that, they should be reminded they're United States Senators and can go back to Washington and do something about this RIGHT F-ING NOW.

    Or, that could be the problem ... that they've both been in Washington.
  10. 2muchcoffeeman

    2muchcoffeeman Active Member

    Franklin Raines isn't anywhere near the Obama campaign.

    Take it to the Politics forum.
  11. mustangj17

    mustangj17 Active Member

    Guys, what's with the Fresca?
  12. hondo

    hondo Well-Known Member

    He's Obama's main economic advisor. Read a paper.
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