Something Feral

Digging up the flower-beds.

Sunday, January 18, 2009

Heaven help us if they get lasers

An excerpt from America's Great Depression:
Having warned the Exchange of a Congressional investigation, Hoover induced the Senate to investigate the Stock Exchange, even though he admitted that the Federal Government had no constitutional jurisdiction over a purely New York institution. The President used continual pressure to launch the investigation of what he termed "sinister" "systematic bear raids," "vicious pools... pounding down" security prices, "deliberately making a profit from the losses of other people." Beside such demagogic rhetoric, constitutional limitations seemed pale indeed. Secretary of Commerce Lamont protested against the investigation, as did many New York bankers, but Hoover was not to be dissuaded. In answering the New York bankers, Hoover used some unknown crystal ball to assert that present prices of securities did not represent "true values." The stock market viciously persisted in judging stocks according to their earnings, a useful criterion that Hoover seemed to find vaguely traitorous:

"...the pounding of prices to a basis of earnings by obvious manipulation of the market and propaganda that values should be based on earnings at the bottom of a depression is an injury to the country and to the investing public."

Instead, the public should be "willing to invest on the basis of the future of the United States."
This might sound familiar:
Washington, D.C., Sept. 19, 2008 — The Securities and Exchange Commission, acting in concert with the U.K. Financial Services Authority, took temporary emergency action to prohibit short selling in financial companies to protect the integrity and quality of the securities market and strengthen investor confidence. The U.K. FSA took similar action yesterday.
One wonders, what original solution to this economic prolapse will they try next?

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