Letter to the editor:

Banks elude scrutiny they so deserved

Al Ciricillo, Las Vegas

Saturday, Dec. 27, 2008 | 2:01 a.m.

The Las Vegas Sun’s Friday editorial (“$$$, no questions asked!”) was a fine piece and you certainly hit the nail square on. You did not, however, strike hard enough with the hammer at the weak leadership in Washington, D.C.

Allow me, please, to quote Neel Kashkari, the Treasury Department official overseeing the bailout funds, whose statement was included in the editorial. Mr. Kashkari said: “It’s very hard for us to try to micromanage and say, ‘This is how you should run your business.’ ”

Hard to micromanage, indeed!

What is really hard is for this peasant to believe that a member of the Washington aristocracy could make such a stupid statement.

Our very existence as citizens is micromanaged on a daily basis by one or more congressional committees or oversight groups, and what about the IRS and its penalties for even simple errors?

Where were all these “guardians” when financial institutions, financial advisers and industries were spending out of control, lying and stealing? Rhetorical question. Answer already known. Our leaders were tied up in conference with more important issues, such as what type of light bulb we should be buying.

I certainly agree that the poor decisions made by those in positions of leadership were a heavy factor in creating this financial crisis. How about allowing we, the people, to micromanage them for a bit and maybe teach them some very basic economic and moral principles?

Discussion: 5 comments so far…

By KillerB

12/27/08 at 6:49 a.m.

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Nothing like saying it how it is, Al. But a couple of points need to be emphasized.

One is that our lives are not "micromanaged" by Congress so much as the bloated machine our federal government has become. Every time Congress or a legislature meets it's usually to give authority to some agency to burrow deeper into our lives where it could not go before.

Another is "micromanage" is what we as citizens are supposed to do. Our government at every level, from fed to state, was designed from the ground up for citizen involvement and direction. If we're lax in that duty we have no grounds for complaining when our elected reps don't do what we think they should do.
By Future2012

12/27/08 at 7:24 a.m.

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"I certainly agree that the poor decisions made by those in positions of leadership were a heavy factor in creating this financial crisis. How about allowing we, the people, to micromanage them for a bit and maybe teach them some very basic economic and moral principles?"

Over the objections of millions of concerned taxpayers, Harry Reid, Chris Dodd, Nancy Pelosi, and Barney Franks as the Congressional Leadership passed this law with no compliance teeth or controls.

Harry Reid, Chris Dodd, Nancy Pelosi, and Barney Franks as the Congressional Leadership, and Pesident-elect Barack Obams have decide that we can wait until 2009 before we need the trillion dollar "stimulate" package.

They have all left Washington.

When Congress comes back Jan 6 for the "stimulate" package will we find out that it will cost us $250,000.00 for each of the 3 million jobs that Obama wants to create?

Why is it that we are 14 months into a recession, close to the normal business cycle to come out of it, and finally Congress wants to act too late. We are just getting the benefit of the $200-300 billion in oil money savings and it take 12-18 months for the interest rate drops to influence to economy.

Congress has not done anything for the homeowner with mortgage aid.

Listen to us this time Harry Reid, Chris Dodd, Nancy Pelosi, and Barney Franks.
By uddeboda

12/27/08 at 10:03 a.m.

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The treasury giving away all those $$$$$$$s without any strings is so typical. Why?, because they are all buddies in the same trough.

When Sweden was experiencing the same problem in the early 90s, they did what had to be done, they "nationalized" all the banks, out with the top exes, no bonuses, nothing for the shareholders, and the influx of capital was equal to a USA comparison of almost $700bn. Within a couple of years the financial system was stable, and the banks were resold to private ownership again, having lost on the operation about 15 million SEK. Insight and regulation of the banks at that time was 100%, and the lesson was learnt at that time which has continued today, when the Swedish banks are very stable and financially solid. We are at this moment lending to both Iceland and the Baltic states billions of $s in coop with the IMF
By jfnance32

12/27/08 at 10:49 a.m.

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Sweden banks:

http://www.wsws.org/articles/2008/nov200...

"Carnegie became the first bank to avail itself of government support when it agreed a 5 billion kronor loan from the Riksbank. The loan followed a day in which Carnegie's shares had lost over half their value, precipitated by reports that Finansinspektionen (the Swedish financial supervisory authority) was investigating the bank. Having recently announced third quarter losses of 500 billion kronor, fears are increasing about the degree of the bank's exposure to the growing global dangers."

"Other banks are possible candidates for government aid. Swedbank suffered substantial losses following Lehman Brothers' demise. SEB Bank is thought to be threatened with considerable losses since it operates a large business in the Baltic states, particularly Estonia and Latvia, which are now in a deep recession. In August, the IMF warned SEB and Swedbank that their investments in the Baltics threatened to trigger a "credit crisis" in Sweden"

"The legislation presented by the government remained vague on what form financial support would take, leaving open the possibilities of direct loans or the purchasing of shares by the state, meaning that as in Britain, the government could become a part-owner of some of the country's largest banks."

"As concern grew about the impact of the financial crisis on Sweden, the Riksbank entered into a swap agreement with the Federal Reserve in the United States to ensure access to $10 billion of funds which could be made available to Swedish banks"
By uddeboda

12/29/08 at 4:30 a.m.

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I am afraid that the figures you quote from a link are not correct. The actual loss for Carnegies 3rd quarter were $127 million, about one billion SEK, not 500 billion SEK. The reason for government intervention was unauthorised lending to one person to the tune of 2 bn SEK without sufficient security. Consequently the government took over and eventually got rid of the top people and restructured the bank for sale again.
Like you say Swebank have invested heavily in the Baltic states, and SEB, who were not affected by the 90s crisis are also involved there, but both banks are stable, and along with Nordea are in no way affected economically