Here is something I stole, er, borrowed from an email sent out by Arch Crawford of the Crawford Perspectives. I have not verified it so it may or may not actually be true. But no matter, true or false it is a hoot.
Here is the quote of the day:
...we and other global firms have, for many years, urged the SEC to reform its net capital rule to allow for more efficient use of capital. This is the single most important factor in driving significant parts of our business offshore, so that our firms can remain competitive with our foreign competitors risk-based capital standards must become the norm. The SEC has made it clear that risk-based capital rules can be implemented only when the Commission is confident that firms employing value-at-risk models have robust credit and risk management policies in place.
Translated into English, this testimony from back in 2000 was from someone asking that major brokerage firms be permitted to increase leverage subject to oversight of their wondrous mathematical risk models. The request was agreed to four years later, in 2004, and it helped lead to the meltdown in independent brokers this year.The speaker? Some guy named Henry Paulson, the then-CEO of Goldman Sachs. I wonder what happened to him.