Larry Summers on FinReg not being a cause for uncertainty in the markets

If you're worried about uncertainty, the people who decided to make 10s, if not hundreds of billions of dollars of subprime loans, and they're saying the uncertainty is about what the government is going to do? People have off-balance sheet SIVs where they can't even calculate what the total extent of their liabilities are, their uncertainty wasn't caused by the government. Their uncertainty was protected by what the government did, by the fact that those institutions were facing, in many cases, catastrophe.

And the government, NOT to help them, but to protect the system, did what was necessary to take what was a tale, of literally a depression, out of the market. That's the important thing that's happened about uncertainty.

~ Larry Summers, director, National Economic Council, CNBC's Closing Bell, July 21st, 2010

Larry Summers on regulatory discretion in FinReg

My friends in the business community sometimes like to try to have it both ways. They're for standards, for clear standards, but then if they don't like the standards, they're for regulatory discretion in a lot of areas, the Volcker Rule for example. It was business that was working very hard to get regulatory discretion and to avoid detailed statutory mandates.

So, I think it's a little rich for them to complain that there is now a certain amount of regulatory discretion.

Look, there's things Congress should not do. Congress doesn't know the details of the circumstances of an individual financial institution, those are enormously technical areas. So there needs to be discretion; discretion circumscribed by a framework; a framework that rules out the prospect of a taxpayer bailout; a framework that provides for resolution authority; a framework that insists that things that can be put on clearinghouses and exchanges be put on clearinghouses and exchanges; a framework that insists that every systemic institution, if you're big enough to bring down the system, you're big enough for someone to regulate you comprehensively.

~ Larry Summers, director, National Economic Council, CNBC's Closing Bell, July 21st, 2010

Larry Summers on FinReg as a regulatory update to keep pace with innovative markets

You know if you look at the financial history of this country we had a catastrophe in the 1930s. We put in place a system of regulation that really set that right. We went a long period with almost no, major, financial incident, but in the last 20 years we've seen one almost every 3 years: the S&L debacle of Mexico, LTCM, the NASDAQ Bubble and so forth. And so we clearly had a major task to do, which was to put in place a regulatory system which was updated to keep pace with the pace of innovation in the markets. That's what the framework put in place today has done. It's a huge achievement for the country, it reflects enormous leadership and hard work of many people, the President, who was talking about this in a major way in campaign speeches, an unlikely subject in campaign speeches, long before the Lehman crisis happened.

~ Larry Summers, director, National Economic Council, CNBC's Closing Bell, July 21st, 2010

Larry Summers on FinReg as insurance against another financial crisis

It's the most important Wall Street reform legislation in 75 years. It will substantially reduce the probability of another financial crisis. It will eliminate the prospect of large-scale federal bailouts of the kind we were forced into a year ago. And it will change the financial life of every American household by forcing the right kinds of protections and restrictions on egregious credit card practices, on mortgages that have exploding and unfair terms, on payday loans and other means in which consumers have been taken advantage of.

~ Larry Summers, director, National Economic Council, CNBC's Closing Bell, July 21st, 2010

Marc Faber cites the wisdom of Confucius

If a man gives no thought about what is distant, he will find sorrow near at hand.

~ Confucius

(cited by Marc Faber, editor, Gloom Boom & Doom Report, July 22nd, 2010)

John Malone on the incompetent Barack Obama

I don't think he should have been elected in the first place. I think he's incompetent. But now, I've thought that of the last couple presidents. [Obama's administration] is all academics and lawyers. I'm afraid that our real problems are systemic and long‑term. And lawyers are primarily trained in fighting over the pie, not making the pie bigger. And this country definitely needs to think about making the pie bigger.

~John Malone, chairman, Liberty Media, WSJ, July 21st, 2010

John Malone on the monetary race to the bottom

I think we're enjoying right now the fact that it's a race to the bottom with Europe. The concern about the Mediterranean countries, I think perhaps is overdone. But it led to a flow of cash into the U.S. and therefore strengthening the dollar.

And keep in mind you have all these corporations that are cash rich now because they fear for the worst. So they've built up cash hoards. But where do they put the money? They put it in money-market funds. What does the money market invest in? Short-term government securities. That's how we're financing this federal deficit.

~John Malone, chairman, Liberty Media, WSJ, July 21st, 2010