"Obama team ignores Volcker at its peril"

[brentspeak]

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/obama-team-ignores-volcker-at-its-peril.aspx

By Bill Fleckenstein
MSN Money

The launch point for this column is an above-the-fold front-page story in last Wednesday's New York Times: http://www.nytimes.com/2009/10/21/business/21volcker.html?em">"Volcker's voice, often heeded, fails to sell a bank strategy" by Louis Uchitelle. He writes about former Federal Reserve Chairman Paul Volcker's views on the financial system, contrasting that with Alan Greenspan's opinions.

According to Uchitelle, the key difference is that Volcker "wants the nation's banks to be prohibited from owning and trading risky securities, the very practice that got the biggest ones into deep trouble in 2008." Regrettably, "the administration is saying no, it will not separate commercial banking from investment operations."

Also regrettably, even though Volcker has volunteered to help, the Obama administration doesn't seem to be listening to him.

[Mojambo]

1. Obama's softness towards the big banks is so aggravating.

He's no Roosevelt.

[iceman66]

2. Damn right!

Does everyone realize that we haven't had a DEMOCRAT as Federal Reserve chairman since Volcker's term ended in 1987?

[fascisthunter]

4. now I do

[fascisthunter]

3. and yet some here think Obama should get a pass

because Bush and the Republicans fucked everything up(they did, but not alone). If Obama really wanted change, he would never have appointed the people he did to his economic team.

[Vincardog]

5. +1 If Obama really wanted change, he would never have appointed the people he did to his economic te

[damonm]

6. Wow.

Never thought I'd agree with Brentspeak.
But I do. This IS a problem.:wow:

[LuvNewcastle]

7. Are there any significant Fed policy

differences between Greenspan and Bernanke? It looks to me like they just bailed out the banks and pushed the reset button and now they're expecting totally different results from the same failed policies. Why have Volcker around if they aren't listening to him?

[Garam_Masala]

8. The risky over leveraged financial derivatives is what caused banks

to get in trouble. Volcker is entirely correct. Banks
should be restricted in gambling with people's deposits
in risky trading schemes.

A bank should be strictly in the business of safeguarding deposits and
making responsible loans to individuals and businesses.

[Kdillard]

9. One of the few times I agree with brentspeak.

[chill_wind]

10. Elbowed out by Summers. He's figurehead Chair of PERAB,

but try to find any progressive economists even in the distant outer circle. Summers ran over him on even that much.

Obama created his PERAB last January, saying that he didn't want his economic advisor teams to be "just one big echo chamber." Well guess what.

[chill_wind]

11. ..