He and others pointed to the financial collapse of AIG Inc. under federal regulation. AIG insurance companies under state regulation remained solvent.
It was never a question in my mind that AIG, including its state regulated insurance operations, were insolvent. Rather the qustion in my mind was exactly how ignorant the State insurance commissioners that parrotted that III talking point above were and the relative degree of their stupidity. Sadly for our friends in Louisiana I concluded the hands down dumbest insurance commish was Jim Donelon mainly because even Mississippi’s Mike Chaney had enough sense to not parrot Robert Hartwig’s talking points on AIG.
The Greek debt crisis finally spilled over in full force to U.S. markets, aided and abetted by extreme statements emanating from such esteemed and prominent voices as Muhammed El-Erian of the large bond investor Pimco, who warned that Greece could be just the beginning of sovereign debt catastrophes. In the space of minutes, the major U.S. indices plunged more than 10%, fueled by the same programmatic electronic trades that were part of the battering in late 2008 into 2009. And then in the space of 15 minutes, they recovered, without — it’s fair to say — much human decision-making during that interval (and if an individual even tried trading during those 30 minutes, they would have found it difficult or impossible, as web sites such as schwab.com were completely overwhelmed with traffic).
Fair enough but the man’s conclusions past this point aren’t worth printing here on Slabbed. Program trading will be with us forever but it is not the culprit here despite the uninformed rantings of the author who is obviously long the market now most likely stuck (stuckholder in finance board parlance). For my part I sold in April and went away (a month ahead of time). That said I am not Carnac the Magnificent but besides staying at a Holiday Inn last night I also read Yves Smith over at Naked Capitalism.
I noted the majority of the comments on the Huff Post post which featured this video were driven from a political idealogy standpoint than one of economic common sense which is one of the reasons I opined on the last Taleb CNBC video I posted that:
using history as a guide we’ll go bankrupt before most folks are able to pull their heads out of their asses.
This is simple common sense, not only do we spend far more than we take in, we have also rewarded those who brought us this disaster known as the financial crisis. My own greatest heartburn isn’t derived from the short term measures taken designed to cushion the economic blow, rather we have no long term solution designed to prevent the inevitable.