re: #473 Conservative Moonbat

Might have helped to keep Glass-Steagall in place too. The myopic frenzy of bipartisan deregulation that happened over the past 20 years can’t be overlooked.

I’m not one for a heavy regulatory hand, but sometimes common-sense regulation is required to keep people from getting crazy. Derivatives trading is an area where people got crazy. Somebody, somewhere should have stood up and said stuff like CDOs squared were crazy ideas.

The really sad part about it was the idiot accountants who let them take MTM profits off vapor curves (for example, the sham of “auction rate” bonds….). The regulatory construct depends heavily on high-quality accounting review which includes impairment for liquidity rather than simply rubber-stamping low-quality earnings while you take fees and rich consulting contracts. Without proper accounting, NO regulatory construct of a free market will work.

To summarize - although the SEC is horribly understaffed and underfunded, all they really do is review earnings statements. The first line of defense for all of us, on those earnings statements, is the accounting profession, which seems (through repetitive examples … Enron/energy crisis, this mortgage mess) to have compromised itself.