I swear, some days I think I'm in bizarro world. And not the generic bizarro world either, the specific Seinfeld bizarro world, where George is an expert in Risk management. And then, some other days, I think that the world is being run by people who have truly run out of ideas, and so resort to TV scripts as guidance for actual real world events. How else do you explain the latest move at the New York Fed? Apparently, Michael Alix is such a colossal failure at Risk Management that he's helped drive Bear Stearns AND Merrill Lynch out of business. That's exactly the kind of skill-set that screams for a job supervising banking regulations for the New York Fed.
Another thing: whenever someone points out that there are massive conflicts of interest, not to mention the (now) horrible track records these guys have, the standard Treasury apologist response is that nobody other than top Wall Street guys know enough about these financial instruments of mass destruction to be able to suggest effective regulations. I disagree. I say that nobody INCLUDING Wall Street guys understand them. Trillions of dollars in losses later, maybe everyone's starting to get it?
George: Alright. Listen, I gotta get some reading done. You mind if I do this
here? I can't concentrate in my apartment.
Jerry (checking out George's textbook): Risk management?
George: Yeah. Steinbrenner wants everyone in the front office to give a
lecture in their area of business expertise.
Jerry: Well what makes them think you're a risk management expert?
George: I guess it's on my resume.
NY Fed's Bear Stearns hire draws fire:
By Pedro Nicolaci da Costa
NEW YORK, Nov 4 (Reuters) - The New York Fed has hired the former 'chief risk officer' of fallen investment giant Bear Stearns as a top bank regulation adviser, prompting outrage among investors.
Numerous analysts say the government is effectively rewarding Michael Alix, an individual deeply involved in fomenting the worst credit crisis in generations, with a taxpayer-funded salary.
At Bear Stearns, the investment bank that collapsed in March and has become hallmark of the global credit crisis, Alix served as chief risk officer from 2006 to 2008 and global head of credit risk management from 1996 to 2006.
'It's like putting the fox in charge of the hen house,' said Malcolm Polley, chief investment officer at Stewart Capital Advisors in Indiana, Pennsylvania.
The appointment goes to the heart of a growing problem that has cropped up along with the myriad rescue efforts aimed at reviving the financial system: few people actually know what was in the risky mortgage bonds that brought the system to a halt.
Analysts say this makes efforts at resolving the problems ripe for conflict of interests, or impropriety at the very least. This certainly seems to be the case in the New York Fed's new hire.