I Think I’m in Love…

I’ve never heard of this guy, but he called pretty much the whole end game in this November 07 interview with Harper’s:

What should the next president do, on the economic front, during his or her first 100 days in office?First thing we need to make a serious effort to attack federal spending and eliminate the federal budget deficit. If we do not get our public sector finances under control quickly, the dollar will collapse and we could see much higher interest rates, capital controls and tariffs imposed in the U.S., incredible as that may sound. We are not very far away from a time when foreigners will be explicitly dictating terms to the U.S. Treasury and private companies when we need to borrow money. Our future as a sovereign nation depends upon our ability to govern our financial behavior, both in the public arena and in private financial markets. This means avoiding costly adventures like the war in Iraq and probably maintaining a much smaller U.S. military in the future, but fiscal sobriety will also require painful domestic spending cuts.

 

Second, we need to appoint some seasoned bankers to the Federal Reserve board and other key fiscal and regulatory positions in the US government. For the past two decades, both monetary policy and financial regulation in the U.S. has been dominated by academic economists who think that gaming instruments like derivatives are good for the economy and for the safety and soundness of our banking system. This is madness. We need to restrict bank dealing in unregistered securities like CDOs, require the registration of all securities sold to public pension funds and force Wall Street to trade all derivatives on exchanges, with proper oversight and disclosure. We don’t need more regulation, but we do need to enforce existing laws and impose greater personal and market discipline and transparency on private banks and bankers. Selling a security that is designed to be misleading and defraud investors is a felony and those responsible for such acts should do prison time.

Richard Christopher Whalen, a Senior Vice President and a Managing Director of Institutional Risk Analytics

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