On Wed, 18 Feb 2009 18:38:46 -0600, "Libby Loo"
wrote:
snip
Answering a question after his speech on whether he would have done
anything differently during his tenure as Federal Reserve chairman to
try and prevent the housing bubble, Greenspan said, "I think it would
be desirable to find a way to suppress asset bubbles.

"But I am skeptical that it can be done."
snip
So the answer is to do nothing and watch the economy be driven
over the cliff????
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(1) Currently under FRB control. Set the margin rate at 100%,
i.e. no stock buying on credit through your broker, 100% cash up
front.

(2) Under Congressional control -- Raise the capital gains tax
rate to and as required above regular income rates, possibly time
graduated so the day trading short term rate, e.g. 10 days, is
much higher than regular income tax rates or for assets held for
3-5 years.

(3) Under Congressional control. Impose the so called Tobin tax
of 0.10% on every exchange transaction including foreign
exchange. This is so small that it will have no effect on the
few legitimate trades as these seldom occur, but will rapidly
eliminate any profit on securities/commodities "turned over" or
churned tens or 100s of times a day.

(4) Try enforcing the existing banking regulations, especially
the loan reserve requirements, i.e. no 30:1 to 90:1 leverage in
regulated/insured banks.

(5) If it quacks like a duck, flies like a duck, swims like a
duck,etc. it's a duck. If it acts like a bank, if it looks like
a bank, if it lends money like a bank, it's a bank. Regulate
accordingly.

(6) Under SEC control. Mandate that all corporations required to
file annual/quarterly reports include their taxable earnings as
reported to the IRS on their annual stockholder reports adjacent
to their claimed EBIDTA or EBBS earnings, and explain the
difference in one or two paragraphs.

(7) Under the SEC or Congressional mandate reinstate the "uptick
rule."

(8) Get control of the hedge funds. If it has the potential to
collapse the economy [e.g. Long Term Capital Management] then is
should be monitored/regulated, and the special tax
exemptions/provisions for the managers' eliminated, e.g. "carry
interest."

(9) Prohibit the payment of bonuses or dividends from borrowed
funds. Require that these be made only from current earnings, or
at the very least cash on hand.

And a whole bunch more.

What a bunch of whiners and no-loads.... This was the same
excuse that the FRB had in 1929.

They are right in a way "nothing can be done when you can do
nothing."


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).