On Sat, 14 Mar 2009 14:54:04 -0500, Richard J Kinch
wrote:
snip
Here is the essence of the current crisis: the financial industry must
segregate its affairs into enterprises that concentrate on
boring/safe/trustworthy/modestly-profitable work (banks) versus
risky/speculative/highly-profitable (stocks and bonds). Banks are
supposed to be the reservoir of non-risk. When they breach that
barrier, the course to systematic collapse is inevitable. With that
principle in mind, it is easy to see the events which have led to this
crisis.
snip
----------
If not the crux of the matter, certainly enough to *GREATLY*
limit the damages.

This remains just as true today as it was in 1933 when
Glass-Steagall was enacted, mandating/enforcing such a
separation. The Glass-Steagall Act prohibited a bank from
offering investment, commercial banking, and insurance services,
and was based on exhaustive investigations into the causes of not
only the 1929 stock market collapse, but also the collapse of the
banking industry.

Glass-Steagall was repealed in 1999 by The Gramm-Leach-Bliley
Act, also known as the Gramm-Leach-Bliley Financial Services
Modernization Act, Pub.L. 106-102, 113 Stat. 1338, opening up
"competition" among banks (BoA, Citi, Chase), securities
companies (Merrell, Lehman Brothers, G/S) and insurance companies
(AIG, MBIA, AMBEC).
http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act


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).