yank

Russian Energy and U.S. Implications

Great posts. Someone mentioned financial stress in every sector (more than likely related to this credit mess) as being a major problem. What's really disturbing is when you examine how we got into this "credit" problem many people figure it was just too much money chasing too few goods. But the reality is that you can trace the current meltdown to one absolutely disastrous (what else is new) decision by Congress in 1999. Back then in all their "wisdom" they decided we could do without an obscure law called the "Glass-Steagall Act" (GSA). Essentially GSA was passed in the early 1930s in a depression-era move to keep the different financial sectors apart in their business dealings as a means of protection for the consumer. So basically back then insurance companies were restricted to selling life insurance, annuities, etc. while banks were limted to loans, checking accounts, etc. When GSA was abolished in 1999 all bets were off as it set off a "frenzy" of activity by all financial cos. including investment banks, brokers, insurance cos. etc. Now virtually "anyone could sell anything." You can imagine the type of mischief that produced along with some good old-fashioned greed thrown in. Anyway, today we are reaping the disastrous consequences of that decision where banks have no idea what is on their balance sheet or how to properly value an asset. What a complete unmitigated disaster brought about by our misguided, incompetent boobs that run Washington.