In a New York Times op-ed this morning, Paul Krugman dissects this week’s What Went Wrong hearings, specifically pointing out two blatant cases of “OMG did he really just say that”.
The first is Jamie Dimon‘s take on how normal it is to have a crisis every 5 years or so:
There were two moments in Wednesday’s hearing that stood out. One was when Jamie Dimon of JPMorgan Chase declared that a financial crisis is something that “happens every five to seven years. We shouldn’t be surprised.” In short, stuff happens, and that’s just part of life.
But the truth is that the United States managed to avoid major financial crises for half a century after the Pecora hearings were held and Congress enacted major banking reforms. It was only after we forgot those lessons, and dismantled effective regulation, that our financial system went back to being dangerously unstable.
The other is Lloyd Blankfein on how the crisis was an act of god or nature, not at all created by man:
Still, Mr. Dimon’s cluelessness paled beside that of Goldman Sachs’s Lloyd Blankfein, who compared the financial crisis to a hurricane nobody could have predicted. Phil Angelides, the commission’s chairman, was not amused: The financial crisis, he declared, wasn’t an act of God; it resulted from “acts of men and women.”
Was Mr. Blankfein just inarticulate? No. He used the same metaphor in his prepared testimony in which he urged Congress not to push too hard for financial reform: “We should resist a response … that is solely designed around protecting us from the 100-year storm.” So this giant financial crisis was just a rare accident, a freak of nature, and we shouldn’t overreact.
Now of course, Krugman comes in and blames the crisis on the greed and leverage, which were symptomatic of the compensation structure disease itself. And he’s right, even if he is a partisan. People don’t lever up a company 33-to-1 unless they are getting paid a boat load more oif they do it than if they don’t do it (or if they’re just plain nuts).
I’m a New York City-based financial advisor at Ritholtz Wealth Management LLC. I help people invest and manage portfolios for them. For disclosure information please see here.
Get a Full Investor Curriculum: Join The Book List
Every month you'll receive 3-4 book suggestions--chosen by hand from more than 1,000 books. You'll also receive an extensive curriculum (books, articles, papers, videos) in PDF form right away.
check my reference
[…]we came across a cool web site that you just may appreciate. Take a look if you want[…]
adamandeve.com
[…]check below, are some completely unrelated web-sites to ours, nonetheless, they’re most trustworthy sources that we use[…]
get more
[…]Here is a good Weblog You may Come across Exciting that we Encourage You[…]
satisfyer pro 2
[…]usually posts some incredibly interesting stuff like this. If you are new to this site[…]
find more info
[…]one of our guests a short while ago advised the following website[…]
Our site
[…]below you will uncover the link to some internet sites that we feel you must visit[…]
navigate here
[…]below youll discover the link to some websites that we assume you need to visit[…]
دوربین مداربسته
[…]please go to the web pages we adhere to, like this a single, as it represents our picks in the web[…]
sex toys
[…]just beneath, are several totally not associated web sites to ours, however, they are surely worth going over[…]
our website
[…]check below, are some totally unrelated internet sites to ours, on the other hand, they are most trustworthy sources that we use[…]
cock ring review
[…]that may be the finish of this post. Right here youll uncover some internet sites that we feel you will value, just click the hyperlinks over[…]
view publisher site
[…]always a large fan of linking to bloggers that I like but really don’t get quite a bit of link really like from[…]
Learn More
[…]Here is a superb Blog You may Obtain Interesting that we Encourage You[…]
that site
[…]we came across a cool internet site which you may possibly love. Take a appear if you want[…]
Going Here
[…]one of our visitors not too long ago proposed the following website[…]