From Too Big to Fail to Too Big to Care

Greg's Note: With a financial crisis looming, the regulators who have been put in charge of our economy seem poised to spring into action. Fred Sheehan takes us back to a simpler time. A time when such a crisis was just a possibility, not an inevitability. If all our markets should be left open to competition, do we really need these regulators at all? Enjoy, and send your comments to the managing editor here:

      Whiskey & Gunpowder
      January 21, 2008
      By Fred Sheehan
      Braintree, Massachusetts, U.S.A.

      From Too Big to Fail to Too Big to Care

      THE CONFIRMATION HEARING OF ALAN GREENSPAN has been the focus of some of my past pieces. With that hearing still in sight, this time, the prophetic warnings of Sen. William Proxmire receive attention. The then-chairman of the Committee on Banking, Housing and Urban Affairs expressed several concerns, the greatest of which was the trend toward the concentration in banking.

      Proxmire made it plain he expected Greenspan would encourage these tendencies. And while the chairman's statements and questions were directed to Greenspan, he spoke with the frustration of a man who sees danger ahead, but finds little acknowledgement among his fellow legislators.

      Greenspan's confirmation hearing was in July 1987. This was during the great deregulation of banking. Initiatives included the emancipation of the savings and loan industry and the authorization for commercial banks to cross state lines, offer home mortgages, enter the brokerage business, underwrite securities and change themselves into conglomerates offering all of the above services and more.


      The Controversial Strategy the Government Tried to Ban

      Some investors are using a little-known yet highly successful strategy, and they're building vast personal fortunes in the process. The idea is simple, so why aren't more investors trying this out?

      To find out the secret behind some of Wall Street's biggest trades, click here.