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In response to:

Did Glass-Steagall Put a Man on the Moon?

pkust Wrote: Jul 30, 2012 8:32 AM
I have another question for Mr. Calabria: How does the derivative adventurism banks indulged in during the housing bubble qualify as reducing risk? Seems to me the effect of derivatives is exactly the opposite -- it amplifies and extends risk.
In response to:

Did Glass-Steagall Put a Man on the Moon?

pkust Wrote: Jul 30, 2012 8:31 AM
A sound banking regulatory regime is not at all challenging to devise. It is a question of setting and enforcing certain priorities. Protecting the principal of customers' deposits certainly should be a top priority, co-equal with earning profits through lending and financing. That means real risk mitigation, not the fancy dodge of derivatives (i.e., proper collateral for loans, no subprime nonsense, et cetera).
In response to:

Did Glass-Steagall Put a Man on the Moon?

pkust Wrote: Jul 30, 2012 8:31 AM
A sound banking regulatory regime is not at all challenging to devise. It is a question of setting and enforcing certain priorities. Protecting the principal of customers' deposits certainly should be a top priority, co-equal with earning profits through lending and financing. That means real risk mitigation, not the fancy dodge of derivatives (i.e., proper collateral for loans, no subprime nonsense, et cetera).
In response to:

Did Glass-Steagall Put a Man on the Moon?

pkust Wrote: Jul 30, 2012 6:46 AM
Diversity does reduce risk. But one thing to remember about Glass Steagall is it maintained diversity of banking structures -- and while that may not have reduced risk to any one individual institution, it did reduce risk across the entire banking system. Glass Steagall could have kept the derivatives market from tainting commercial banking and lending activities -- which very much was the case of the S&L crisis of the '80s (what made that crisis containable was the ability of the economy overall to keep growing, and thus soak up the bad debt of the failed thrifts).
According to the CDW website, the going price for a Cisco 3945 router is $8,799. A T1 Module for that device would cost $716. Installation and set up of an Internet rotuer, depending upon the particular network requirements, can take anywhere from 1 to 8 hours (for a multi-homed configuration with complex routing schemes and requirements); the going rate for network engineering consulting in Houston, Texas, is $125. Even at double that, the hardwre and labor cost do not come anywhere close to $22,600--using the parts specified in the article. I am a network consultant--this is exactly what I do for a living, which is how I know the hardware and labor costs for such a thing.
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