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The Indefenseable being defended.

December 26, 2008

coxI’m sure that the SEC Chairman, Cox, is a nice enough person; but, how do you really defend 8 years of being a sleep at the wheel?  Madoff didn’t just happen.  There had been complaints regarding Madoff and his methods since 2000.  Just why did Cox ignore those complaints and decided not to investigate?

Christopher Cox, the embattled chairman of the Securities and Exchange Commission, is defending his restrained approach to the financial crisis, saying he has provided steady leadership as Wall Street’s main regulator at a time when other federal regulators have responded precipitously to upheaval in the markets.

There is just too much cronyism in our government.  Why would Cox give Madoff a pass if not for cronyism?  Or does this goes deeper?  A Ponzi scheme of that level had to involve more people.  Are we suppose to believe that only Madoff participated and no one else?  What the hell was the other people that make up his firm doing?  Just collecting a pay check?  There were no real investments being done.  What was the staff doing?

But in his first interview since the Madoff scandal broke, Cox said he was not responsible for the agency’s failure to detect the alleged fraud and that he had responded properly to the broader financial crisis given the information he had. Confronted with a barrage of criticism from lawmakers, former officials and even some of his staff, Cox said he took pride in his measured response to the market turmoil.

He took pride in his “measured response?”  Really?  Just what does he call the collapse of our economy?  Perhaps this is only a matter of not having a president that had a clue and without any innovative thought.  Or perhaps this mess goes a lot deeper.  One thing for sure is that Cox did not do his job and no amount of saying he was giving “measured response,” will make history depict him in a positive light.

“What we have done in this current turmoil is stay calm, which has been our greatest contribution — not being impulsive, not changing the rules willy-nilly, but going through a very professional and orderly process that takes into account unintended consequences and gives ample notice to market participants,” Cox said. This caution, he added, “has really been a signal achievement for the SEC.”

Sometimes disasters require action with calmness.  JThat was not something the SEC was doing.  John McCain had it correct…fire the head of the SEC.  Let’s look at Cox’s job description another way:

Maybe they should change the name to Insecurities and Outrage Commission.

Because the more Americans learn about the failure of the Securities and Exchange Commission to police Wall Street, the less secure they are likely to feel about investing in stocks ever again. And the angrier they get, especially when their portfolios are off 30-40 percent.

To put it another way, investors are suffering a loss of innocence. It’s like waking up one day and realizing that the local police department is either incompetent or disinclined to do its job.

The latest example to make the news is, of course, Bernard Madoff. Suddenly he’s a famous name, the guy who perped the biggest Ponzi scheme in Wall Street history. The price of the con is most often given as $50 billion, but no one is quite sure yet. Stay tuned.

Enough said.

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