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Richard Sachs Cycles

MS CEO calls for reforms (with limits)

The firm’s annual shareholder meeting was today … buried deep in the story from the Wall Street Journal were the following paragraphs regarding comments made by Morgan Stanley CEO James Gorman.

In the meeting, a brisk one hour compared with Goldman Sachs‘ three-hour marathon, Mr. Gorman also said Morgan Stanley was committed to regulatory reform. [...]

Pay for pay?

You’ve heard of pay-for-play, right? How about pay-for-pay?

Here’s an idea that seems to make some sense. Don’t limit Wall Street pay and bonuses, but require higher FDIC premium payments if a bank’s pay structure is deemed to be “risky”, such as incentive bonuses for writing more loans (which leads to bankers writing riskier loans).

[...]

Wells Fargo In Trouble?

Wells Fargo May Need Capital – WSJ.com

An initial U.S. stress test identified Wells Fargo & Co. as among the banks needing a buffer against future losses, said a person close to the company.

But it was unclear Monday whether Wells would be forced to raise fresh capital or if regulators would accept its argument [...]

Ooof, what a week …

This week was totally unreal. Over the course of the past 6 weeks, since the beginning of September, I have lost over 50% of my net-worth; almost all of which is in my retirement plan.

On the other hand, I have been averaging my cost-basis down in Morgan Stanley, picking up another 150 shares yesterday, [...]

The aftermath …

Perhaps this plan will make Art a little happier … but I’d like to read the actual text of the bill before I make any judgments.

Democrats offer alternative ‘no bailouts act’ – CNN.com

WASHINGTON (CNN) — A small group of Democratic House members put together an alternative to the $700 billion financial bailout measure [...]

At what cost, “NO”?

Without a Bailout Plan, What Will the Cost Be? – TIME

By voting down the proposed $700 billion financial bailout package — and causing a spectacular stock market rout — a majority of members in the House of Representatives made a clear statement that they didn’t want to put taxpayers on the hook for the [...]

The Democrats’ plan, presented by John McCain

In yet another signal that John McCain is looking for change in Washington, the Republican presidential candidate urged lawmakers to adopt five improvements, originally suggested by the Democratic Party, to the government’s $700-billion proposed bailout of the US financial system.

Of course, McCain says these are his ideas. But we know the truth.

McCain [...]

What do the candidates propose?

Will candidates’ financial plans work? – CNN.com

(CNN) — In the wake of the country’s financial meltdown, Sens. Barack Obama and John McCain have been telling voters they’ll fix the economy while their opponent would only make it worse.

As the economy dominated voters’ concerns, McCain and Obama stepped up the political blame game and [...]

SEC bans short selling for financials

SEC bans short selling for financials – Sep. 19, 2008

Agency puts temporary halt to trading practice that ‘threatens investors and capital markets’ for 799 financial companies.

NEW YORK (CNNMoney.com) — The U.S. Securities and Exchange Commission took what it called “emergency action” Friday and temporarily banned investors from short-selling 799 financial companies.

The temporary [...]

Rescue Me

Rescue Me: A Fed Bailout Crosses a Line

WHAT are the consequences of a world in which regulators rescue even the financial institutions whose recklessness and greed helped create the titanic credit mess we are in? Will the consequences be an even weaker currency, rampant inflation, a continuation of the slow bleed that we have [...]