FCIC Report is very Illuminating

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The Financial Crisis Inquiry Commission (FCIC) is a congressional sponsored study into the reasons for the Financial Crisis. They were authorized by the President in May 2009. They have issued their final report and are disbanding. Google FCIC and you will find their information is being maintained by StanfordUniversity. The published report is available on the website and booksellers (ISBN 978-1-61039-041-5). It is over 500 pages long. I have personally purchased about 15 books on the Financial Crisis over the last two years (I know I should get a life). Each book discusses separate segment of the crisis. This report is the most comprehensive book to date and is very readable by a person interested in the subject.

 

The commission was chaired by Phil Angelidies and former congressman Bill Thomas. There are eight additional commissioners appointed by the Democratic and Republican party. They had a staff of 60 people. They held hearings in Washington and locations in states hardest hit by the Real Estate bubble.

 The first chapter summarizes their finding and are quite illuminating on the many facets of the Financial Crisis. They dispel many myths and are provided below.

 One can definitely say we had less government in the Finance world. The evolved system was unsustainable. The end result being the crash of September 2008.

 

 

 

Conclusions of FCIC

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US FINANCIAL REGULATION AND ARBITRAGE

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US FINANCIAL REGULATION AND ARBITRAGE

There is no doubt that we have had a major world wide financial collapse drastically affecting many innocent people in terms of livelihood and life long savings. It is fair to say that if the regulators had done their job, the country would have not had the hard landing that was experienced in 2008. The 2010 Financial Reform Bill kicked the can down to the Regulators for implementation and the bankers still have influence. This article takes a look at who the regulators were and how they did or did not do their job. The Obama people in the regulator domain are identified along with examples of Bush regulator failures.  Hopefully this will give insight into what is being done to preclude another crisis

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Derivatives – The Dark Market

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Derivatives – The Dark Market

The major objective of this article is to begin the process of understanding the financial market to enable intelligent discussion on the blog.

One of the major pillars of financial collapse was Derivatives. They are very complex financial instruments with a wide diversity. They are described by a gaggle of terminology used by the high priests of finance. Because of complexity most of the books on the collapse skirt the detail of the Derivative Market. After we get through some basic definitions, we will focus on Credit Default Swaps (CDS), a subset of the Derivatives offerings. We will see how the government created a non regulated environment where fraud, compromised regulators and incompetent people ran the Investment Financial community in a very high risk mode.

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