BANKSTERS AND REGULATORS

On April 28, 2004 these five Americans pictured above, Paul Atkins, Cynthia Glassman, William H. Donaldson, Harvey J. Goldschmid and Roel C. Campos, all Securities Exchange Commission (SEC) commissioners, along with Christopher Cox, then Bush-appointed SEC Chairman, and Annette L. Nazareth, director of market regulation at the SEC, put into motion a relaxation of reserve requirements for five investment banks, an action which doomed the American economy.

These five Securities & Exchange Commission commissioners sealed the future fate of the American economy on that day in 2004 when they approved an appeal by five investment banks (Goldman Sachs, Lehman Brothers, Merrill-Lynch, Bear Stearns and Morgan-Stanley) to expand their reserve ratios – that is, take greater risks with the public’s money. This was done by consent of the regulators and their politically-appointed bosses during the Bush II administration. (Would any of you now care to fund a Presidential library for the man who was in charge during this wholesale theft of your money?)

Only one voice stood in opposition to this expansion of risk, a consultant who writes financial software for the securities industry, Leonard C. Bole.

The widening of reserve ratios by investment banks would be permitted with the prerequisite that advanced computer technology be employed to signal any downturn in the economy at an early point so a collapse of the economy could be corrected before it would occur.

Bole wrote a letter to the SEC that the computer models the SEC would now rely upon to provide information, in advance of any financial collapse, were flawed. You can listen to the live testimony of these SEC commissioners and learn more about Mr. Bole’s letter to the SEC at an online video report prepared by The New York Times.

The aftermath of expanded leverage and exorbitant bonuses

To better comprehend wayward modern banking practices, readers here would benefit from understanding how these expanded leverage ratios (reserves of assets or cash in relation to amount of loans) have been mischievously used. The expanded leverage used by the bankers was then translated into huge bonuses for bankers and bank stock holders, which is described by Edmund Conway, economics editor for the online edition of The Telegraph(UK)...
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-flynn