The article focused on insurance regulation which aeems to be doing fine on a state by state basis while the real problem is in the investment portfolios which obviously needed regulation that it didn’t get. Let’s all agree that investments and especially derivitives and the payment of derivitive claims (does that make it insurance?)need a lot of regulation by a supervising authority. Incompetence and greed can’t be overlooked when volitile investments put the National and World economy at risk. In some cases, putting the money on line at the race track is a safer bet. No one is doing the regulation yet? The regulation of the payment of derivitive claims must be a hot political issue because none of the legislators or regulators seem willing to touch it. Whose “rice bowl” is in danger? I think that the American Public would have a stroke if they knew who was getting paid off under these derivitive so called claims.
Your comments are quite telling; the banking lobby has deliberately clouded the issue by letting the debate go toward insurance regulation because someone wants into the market and can’t due to heavy state regulation; that’s the reason for pushing the “optional” federal charter: to make it easier for foreign companies to enter the US market. There has been no movement on financial regulation yet, except the big debate on whether federal insurance regulation is needed.Let’s be clear, this is about BIG money. It was a plum falling in their lap that what was once just an insurance company (AIG)was at the center of this crisis. Whst I’d like to know is if all these folks lost this money, and my 401(k), too, who profitted when these CDS were called in? Find that money and you’ll know why financial regulation won’t happen. a good indication is that executive compensation has not changed at all. those big bonuses are still being paid, while these companies bottom lines tank. the fact is that these folks who are getting paid by calling in their “bets”, continue to profit with our money! this is a world wide crisis and it will take a lot of courage to do anything about it. Legislators and government bureacrats are being plied with money, like call-girls and they like it; no one wants real change, except the “loose change” that is being thrown at them…
I’ve read some of the articles that this professor has written. All [that I’ve read] have centered around government is bad and private enterprise is good. So is it any surprise that we find the tone as it is in this article? I agree with the previous two comments, there has got to be some sort of regulation in the investments that insurance companies [read holding companies] can participate in. Yes, I know that in the AIG case the branch of the company that created the credit default swaps wasn’t an “insurance” concern. But when there is a potential for catastrophic depletion of assets due to reckless financial investments within a conglomerate, then guess what happens? The notion that AIG was an anomaly and therefore shouldn’t provoke regulation is intellectually stunted. We create regulation after the occurrence of anomalies: over-leveraged investments prior to the crash that led to Great Depression were systemic in the market, but the trigger to financial ruin was “anomalous.” It was systemic then, as was the participation in the derivatives markets by those who failed to understand the very instruments they purchased was in 2008. AIG just happened to be the kid elbows deep in the cookie jar when mom turned on the kitchen light to see what was happening at 2 AM.
The article focused on insurance regulation which aeems to be doing fine on a state by state basis while the real problem is in the investment portfolios which obviously needed regulation that it didn’t get. Let’s all agree that investments and especially derivitives and the payment of derivitive claims (does that make it insurance?)need a lot of regulation by a supervising authority. Incompetence and greed can’t be overlooked when volitile investments put the National and World economy at risk. In some cases, putting the money on line at the race track is a safer bet. No one is doing the regulation yet? The regulation of the payment of derivitive claims must be a hot political issue because none of the legislators or regulators seem willing to touch it. Whose “rice bowl” is in danger? I think that the American Public would have a stroke if they knew who was getting paid off under these derivitive so called claims.
Your comments are quite telling; the banking lobby has deliberately clouded the issue by letting the debate go toward insurance regulation because someone wants into the market and can’t due to heavy state regulation; that’s the reason for pushing the “optional” federal charter: to make it easier for foreign companies to enter the US market. There has been no movement on financial regulation yet, except the big debate on whether federal insurance regulation is needed.Let’s be clear, this is about BIG money. It was a plum falling in their lap that what was once just an insurance company (AIG)was at the center of this crisis. Whst I’d like to know is if all these folks lost this money, and my 401(k), too, who profitted when these CDS were called in? Find that money and you’ll know why financial regulation won’t happen. a good indication is that executive compensation has not changed at all. those big bonuses are still being paid, while these companies bottom lines tank. the fact is that these folks who are getting paid by calling in their “bets”, continue to profit with our money! this is a world wide crisis and it will take a lot of courage to do anything about it. Legislators and government bureacrats are being plied with money, like call-girls and they like it; no one wants real change, except the “loose change” that is being thrown at them…
I’ve read some of the articles that this professor has written. All [that I’ve read] have centered around government is bad and private enterprise is good. So is it any surprise that we find the tone as it is in this article? I agree with the previous two comments, there has got to be some sort of regulation in the investments that insurance companies [read holding companies] can participate in. Yes, I know that in the AIG case the branch of the company that created the credit default swaps wasn’t an “insurance” concern. But when there is a potential for catastrophic depletion of assets due to reckless financial investments within a conglomerate, then guess what happens? The notion that AIG was an anomaly and therefore shouldn’t provoke regulation is intellectually stunted. We create regulation after the occurrence of anomalies: over-leveraged investments prior to the crash that led to Great Depression were systemic in the market, but the trigger to financial ruin was “anomalous.” It was systemic then, as was the participation in the derivatives markets by those who failed to understand the very instruments they purchased was in 2008. AIG just happened to be the kid elbows deep in the cookie jar when mom turned on the kitchen light to see what was happening at 2 AM.