Tim Geithner on sustaining the unsustainable

European leaders face the difficult challenge of trying to restore sustainability to an unsustainable system.

~ Timothy Geithner, US Secretary of the Treasury, remarks at the U.S.-China Strategic and Economic Dialogue, Beijing, China, May 25th, 2010

Jim Grant on the Too Big to Fail banking doctrine (1990)

If anything is new about banking in the 1980s, it is the substitution of federal guarantees for the liquidity of individual banks. It is the policy that, even in smaller institutions, depositors will be protected. It is this regulatory sea change that distinguishes the current debt expansion from so many earlier ones. Rothbard’s theory holds that a run-resistant, semi-socialized, fractional reserve banking system is a house of cards. 

~ Jim Grant, "Bring Back the Bank Run," The Free Market, February 1990

Philip Fisher on faulty investment community appraisals of market conditions

Ridiculous as it may seem to us today, in the period from 1927 to 1929, the majority of the financial community actually believed we were in a "new era." For years earnings of most U.S. companies had been growing with monotonous regularity. Not only had serious business depressions become a thing of the past but a great engineer and businessman, Herbert Hoover, had been elected President. His competence was expected to assure even greater prosperity from then on. In such circumstances it seemed to many that it had become virtually impossible to lose by owning stocks. And many who wanted to cash in as much as possible on this sure thing bought on margin to obtain more shares than they could otherwise afford. We all know what happened when reality shattered this particular appraisal. The agony of the Great Depression and the bear market of 1929 to 1932 will be long remembered.

~ Philip Fisher, stock legend, "Still More About the Fourth Dimension", Common Stocks and Uncommon Profits, 1958

Larry Kudlow on the fallout from Europe's troubles

The economic fundamentals in this country are good and don't deserve this kind of trouble.

We need to take the next step: just guarantee all the bank debt!

~ Larry Kudlow, as appeared on CNBC at 11:10 am EST, May 20, 2010

Time magazine on financial regulation

As Washington gets down to the hard work of putting laws into place that are designed to prevent another crisis, they are shaping the way government will protect investors and consumers for the next generation. Under financial regulatory reform, which all three women support, both the SEC and the FDIC stand to win powerful new authority to limit and dismantle offenders.

~ Time, "The New Sherrifs of Wall Street," May 13, 2010, by Michael Scherer

A typical individual investor: "I'm not jumping into this market" (1982)

I'm not jumping into this market. I'm selling in this market and would advise anyone else to do the same. This is one of those times when you can't see very far ahead.

~ David Logan, 60, retired real estate developer in Chicago, "Wall Street's Super Streak," Time, September 6, 1982

Jean-Claude Trichet on buying sovereign debt in the eurozone

Our measures are explicitly authorized by the (EU) treaty. We are not embarking on quantitative easing. We are helping some market segments to function more normally. And, as I said, we will take back all the additional liquidity that we will supply in our Securities Markets Program.

~Jean-Claude Trichet, president, European Central Bank, "A 'Quantum Leap' in Governance of the Euro Zone Is Needed", Der Spiegel, May 15th, 2010