
It effectively replaced the old rule put in place in 1970s limiting the same ratio to 1 to 12. Especially interesting quote in the press release is that of then SEC Commissioner Harvey Goldschmid who said, "If anything goes wrong, it's going to be an awfully big mess."
1- Why did the SEC feel the need to grant such a permission in 2004, a year that U.S. economy had already recovered from a mild recession?
2- Why did the rule change apply to 5 financial firms only?
3- How could the SEC justify letting go of the "leash" while without a well-defined mechanism to investigate and confirm that the portfolios of these institutions did actually conform to the new set of rules?
These are only some of many key questions that come to mind with no satisfying answers. One would find it hard to resist labeling this decision as the flapping of the wings of the butterfly that may have ultimately caused the current devastating hurricane hitting the shores of Manhattan.
The American public deserves a good look into the annals of this mystery.
2 comments:
I have written about this on my blog: rightardia.blogspot.com. This was the straw that broke the camel's back.
Congress needs to investigate this mystery.
Very nicce!
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