Perchoutofwater Posted September 21, 2009 Share Posted September 21, 2009 53% Oppose More Regulation of US Financial Sector. Wiegie, Muck, what are your thoughts on this? Seems to me we may need to tweak some regulations and actually provide or enforce the regulations already in the books, but I admit I am not all that familiar with all the regulation, and would appreciate your opinions. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted September 21, 2009 Share Posted September 21, 2009 This is, on the face of it, truly astounding. Has the national memory been completely lost? I have to presume that this result is mostly down to the way the question was posed. Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted September 21, 2009 Author Share Posted September 21, 2009 This is, on the face of it, truly astounding. Has the national memory been completely lost? I have to presume that this result is mostly down to the way the question was posed. I'll admit ignorance here, but what do you feel needs to be regulated that isn't currently regulated? I guess I can see bonuses being regulated, but bloated bonuses are a result for previous government interference regarding salaries. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted September 21, 2009 Share Posted September 21, 2009 I'll admit ignorance here, but what do you feel needs to be regulated that isn't currently regulated? I guess I can see bonuses being regulated, but bloated bonuses are a result for previous government interference regarding salaries. Regulate all the currently unregulated bodies e.g. hedge funds. Split banking and investment banking away from each other again. Return to the regulation that made banking boring. Mandate bonus clawback to avoid short termism. Break up any institution that might be "too big to fail". Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted September 21, 2009 Author Share Posted September 21, 2009 Regulate all the currently unregulated bodies e.g. hedge funds. Split banking and investment banking away from each other again. Return to the regulation that made banking boring. Mandate bonus clawback to avoid short termism. Break up any institution that might be "too big to fail". On the face of things, I can't see anything to argue with you about here with the possible exception of breaking up businesses because of their size. I'm not saying I'm opposed to it, I would just want to know how it is going to be done. I'm also not sure it is necessary as I'm not sure if anything is really too big to fail. Quote Link to comment Share on other sites More sharing options...
WaterMan Posted September 21, 2009 Share Posted September 21, 2009 I bet those low-life drug dealers and CEOs got to answer. Quote Link to comment Share on other sites More sharing options...
Rovers Posted September 22, 2009 Share Posted September 22, 2009 Must be they favor capital punishment instead? I'd be for that. Quote Link to comment Share on other sites More sharing options...
muck Posted September 22, 2009 Share Posted September 22, 2009 Regulate <snip> hedge funds. 1) Why do you say HFs are not regulated? 2) Assuming you're right, why should they be regulated? Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted September 22, 2009 Share Posted September 22, 2009 (edited) 1) Why do you say HFs are not regulated? 2) Assuming you're right, why should they be regulated? They are regulated loosely but some are so large and invest in risky securities to a point where they can adversely affect the overall market, thus they affect all of us. Edit: And why should they NOT be regulated? Edited September 22, 2009 by Ursa Majoris Quote Link to comment Share on other sites More sharing options...
muck Posted September 22, 2009 Share Posted September 22, 2009 (edited) A couple of ideas (in no certain order): * Redefine "monopoly" to include any legal entity that has total assets (not net assets) in excess of _______% of GDP. * Fund existing enforcement arms to do their jobs; no need to add to regulations currently on the books. Let's simplify the byzantine rules so that business managers can comply with them and then fund the regulatory arms to do their jobs. Being a guy in the heavily regulated world of investment management, I would LOVE to see some of the conflicting, mutually exclusive, difficult to follow, even more difficult to implement regulations be simplified. It is far (FAR) easier to comply with regulations that are not mind-numbingly complicated. * Credit default swaps cannot be unlimited in issuance; only organic hedging allowed (i.e., you cannot buy a CDS on a company in which you have no financial exposure in the event of default / bankruptcy) -- CDSs (imo) played a very large (and unnecessary!) role in the troubles of 2008 and early 2009. * Do not allow regulatory bodies to prohibit certain types of investment simply because a prospective investor is deemed to be "too poor" to make the investment. These rules are pretty silly when you follow the logical extension of these things... Regarding regulating pay / bonuses. I think regulating them is silly; however, I believe that good corporate governance will require a better approach. If I were in charge of a big publicly traded company, I'd look to instill something along the following: * Employees of publicly traded companies in the top 2% of salaries are required to sign employment contracts which state that any bonuses are to be paid out over no less than three years (and no more than five years) and at least 1/5th of the bonus must be in company stock. If the employee is one of the top 1% of salaried employees, the bonus must be paid out over at least five (and no more than 10yrs) and at least 1/3rd of the bonus must be in company stock. If the employee is one of the top 10 executives, the bonus must be paid out over at least 10 years (but no more than 15 years) and at least 1/2 of the bonus paid out in stock. As a aside: * Speculation is not evil. * Leverage is not evil. * Bankruptcies happen for a reason. Let them. * If it weren't for risk taken and trial-and-error experimentation, the USA would not be the dominant world power it is today. Edited September 22, 2009 by muck Quote Link to comment Share on other sites More sharing options...
muck Posted September 22, 2009 Share Posted September 22, 2009 geeteebee? Quote Link to comment Share on other sites More sharing options...
Randall Posted September 23, 2009 Share Posted September 23, 2009 Are these Some of the people opposing it? Quote Link to comment Share on other sites More sharing options...
Clubfoothead Posted September 23, 2009 Share Posted September 23, 2009 100 people surveyed. Top 6 answers on the board. So what? Quote Link to comment Share on other sites More sharing options...
TheShiznit Posted September 23, 2009 Share Posted September 23, 2009 A couple of ideas (in no certain order): * Redefine "monopoly" to include any legal entity that has total assets (not net assets) in excess of _______% of GDP. * Fund existing enforcement arms to do their jobs; no need to add to regulations currently on the books. Let's simplify the byzantine rules so that business managers can comply with them and then fund the regulatory arms to do their jobs. Being a guy in the heavily regulated world of investment management, I would LOVE to see some of the conflicting, mutually exclusive, difficult to follow, even more difficult to implement regulations be simplified. It is far (FAR) easier to comply with regulations that are not mind-numbingly complicated. * Credit default swaps cannot be unlimited in issuance; only organic hedging allowed (i.e., you cannot buy a CDS on a company in which you have no financial exposure in the event of default / bankruptcy) -- CDSs (imo) played a very large (and unnecessary!) role in the troubles of 2008 and early 2009. * Do not allow regulatory bodies to prohibit certain types of investment simply because a prospective investor is deemed to be "too poor" to make the investment. These rules are pretty silly when you follow the logical extension of these things... Regarding regulating pay / bonuses. I think regulating them is silly; however, I believe that good corporate governance will require a better approach. If I were in charge of a big publicly traded company, I'd look to instill something along the following: * Employees of publicly traded companies in the top 2% of salaries are required to sign employment contracts which state that any bonuses are to be paid out over no less than three years (and no more than five years) and at least 1/5th of the bonus must be in company stock. If the employee is one of the top 1% of salaried employees, the bonus must be paid out over at least five (and no more than 10yrs) and at least 1/3rd of the bonus must be in company stock. If the employee is one of the top 10 executives, the bonus must be paid out over at least 10 years (but no more than 15 years) and at least 1/2 of the bonus paid out in stock. As a aside: * Speculation is not evil. * Leverage is not evil. * Bankruptcies happen for a reason. Let them. * If it weren't for risk taken and trial-and-error experimentation, the USA would not be the dominant world power it is today. Also, make being a financial professional...well...a profession. In my opinion, anyone with a beating heart could pass a series 6 and 63...and even the series 65. If I was King, I would make sure that anyone who wanted to work in the financial services industry dealing with securities or mutual funds would have to have a Bachelors degree at a minimum and also have a 2 year apprenticeship and during that two years attain the CFP designation. That way you are having the best minds in the nation help to advise people about their money. And like the medical profession, you can have the equivalent of a Physician Assistant or Nurse Practitioner to help the Planner do his/her job...salaried of course. Quote Link to comment Share on other sites More sharing options...
muck Posted September 23, 2009 Share Posted September 23, 2009 (edited) Good idea about the apprenticeship; in fact, I'd argue that the apprenticeship would be more important than a bachelors. PS - [sarcasm]I'm sure everyone trading currencies for Goldman Sachs would love to get a CFP, too.[/sarcasm] It's just not relevant for everyone in the financial services industry ... but, an apprenticeship? That's a good idea. Edited September 23, 2009 by muck Quote Link to comment Share on other sites More sharing options...
TheShiznit Posted September 23, 2009 Share Posted September 23, 2009 Good idea about the apprenticeship; in fact, I'd argue that the apprenticeship would be more important than a bachelors. PS - [sarcasm]I'm sure everyone trading currencies for Goldman Sachs would love to get a CFP, too.[/sarcasm] It's just not relevant for everyone in the financial services industry ... but, an apprenticeship? That's a good idea. The only reason I think the CFP is important is that traders get hung up on the day to day workings of the market, they forget the purpose of their clients money and how their assets all tie together...because after all....they get paid more the more their client makes. I really am disgusted with how the pay structure works for places like this. You get paid more for new business than retention. You get paid more for growth than sustaining. It puts some of these folks in a position to do some unsrupulous things. So, my ideal model would look something like this. Lets use a Medical office as the model. You have the doctor on top...the NP or PA underneath. Then the RN and techs. Same would hold true in the Financial services arena. Forget commissioned sales people...everyone becomes an equity owner in the book, kindal like a law firm, when they work there long enough. You get paid fees for advice and that is all. Other get paid a salary simply for managing money and not losing it versus swinging for the fences(obviously a happy medium needs to exist). But I have seen so many people lose money because they were pie in the skyed(which is why they call the Series 63 the Blue Sky law) that it makes me sick. If you take the commission out of the work and make it an profession where you charge a fee for access....then it becomes a whole lot more professtional because you get paid the same no matter what product the client decides on. Quote Link to comment Share on other sites More sharing options...
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