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From the original article that the blog post Cory quotes from is based on:"In 2004, the European Union passed a rule allowing the SEC's European counterpart to manage the risk both of broker dealers and their investment banking holding companies. In response, the SEC instituted a similar, voluntary program for broker dealers with capital of at least $5 billion, enabling the agency to oversee both the broker dealers and the holding companies.This alternative approach, which all five broker-dealers that qualified — Bear Stearns, Lehman Brothers, Merrill Lynch, Goldman Sachs, and Morgan Stanley — voluntarily joined, altered the way the SEC measured their capital. Using computerized models, the SEC, under its new Consolidated Supervised Entities program, allowed the broker dealers to increase their debt-to-net-capital ratios, sometimes, as in the case of Merrill Lynch, to as high as 40-to-1. It also removed the method for applying haircuts, relying instead on another math-based model for calculating risk that led to a much smaller discount.The SEC justified the less stringent capital requirements by arguing it was now able to manage the consolidated entity of the broker dealer and the holding company, which would ensure it could better manage the risk."

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Boing! Boing!

October 9 2008, 11:44am | Comments »

I posted to google.com

Tom Wolfe: CRT monitors caused the financial meltdown (Post a comment)

http://gadgets.boingboing.net/2008/10/07/tom-wolfe-crt-monito.html

Created 1 hour ago

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briancarnell says:

Oct 7 at 22:05 PM

Computers haven't made us lazy -- we were lazy long before computers came along.After all it is not as if booms, recessions and depressions are something that are a 21st century innovation. For example, there was the Long Depression of the late 19th century which was a lot like the current economic crisis -- a collapse in available money and credit.And nary a CRT in sight.

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October 7 2008, 4:05pm | Comments »

I posted to google.com

US Congresspeople Told Martial Law Would Be Imposed if Bailout Bill Didn't Pass (Tube Map for Miss SC)

http://www.boingboing.net/2008/10/06/us-congresspeople-to.html

Created 16 hours ago

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briancarnell says:

Oct 6 at 21:15 PM

Congressional Martial Law is a rules tactic that is used infrequently:http://www.cbpp.org/7-28-06bud-stmt.htm

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October 6 2008, 3:15pm | Comments »

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Lifestream

Quietly Idiotic Xeni Jardin Post

Violet Blue scratches her head over BoingBoing purge - Los Angeles Times

The Circle Is Now Complete — Antinous Is the Master

Barack Obama, Bill Ayers and Political Violence

The Cognitive Dissonance of IP Bans at Certain Sites

Teresa Nielsen Hayden Demonstrates How *Not* To Moderate an Internet Forum

How SEC rule-exemptions led to the Wall St collapse (Tube Map for Miss SC)

Tom Wolfe: CRT monitors caused the financial meltdown (Post a comment)

US Congresspeople Told Martial Law Would Be Imposed if Bailout Bill Didn't Pass (Tube Map for Miss SC)

Popular Tags

Search

Teresa Nielsen Hayden Demonstrates How Not To Moderate an Internet Forum