Sunset of the West:
"Jim Rickards, former general counsel of failed hedge fund Long
Term Capital Management, argues that no one learned the lessons of
the fund’s 1998 failure. Instead of becoming more prudent, those running
the U.S. financial system became more confident, even cocky, which
led to the repeal of Glass Steagall in 1999.
Without mentioning the ship by name, Rickards drew an analogy
between the effects of the repeal of Glass Steagall and the
construction of the HMS Titanic, which had bulkheads that did not
reach to the ceiling. As a result of that engineering flaw, once water
reached the height of the bulkheads, the entire ship was flooded.
When banks and insurance companies were permitted to become
brokerages, investment banks and then lever up like hedge funds, they lowered the risk bulkheads and the
danger to the entire financial system increased dramatically.
Rickards
also notes that many of the current group in individuals steering the
financial ship under the Obama administration were implicated in the
deregulation movement, including Secretary Geithner.
Oh boy. It is like in a horror movie, when you find out that the good looking, helpful cop is working for the other side.
Rickards takes the same view as your editor, namely that the future
of the U.S. as a super power is in jeopardy. We have named this
process the Sunset of the West," quoted from TSR this a.m. |
