Where is Brooksley Born? "The Woman Greenspan Rubin and Summers Silenced"

[Captain_Nemo]

Why isn't Brooksley Born on Obama's financial team? If Rubin and Summers are advising him, why not her?


"Break the Glass" was the code-name high-level Treasury Department figures gave the $700 billion bailout; it was to be used only as a last- resort measure.

Now millions have been sprayed and damaged by broken glass.

But more than a decade ago, a woman you're likely never to have heard of, Brooksley Born, head of the Commodity Futures Trading Commission-- a federal agency that regulates options and futures trading--was the oracle whose warnings about the dangerous boom in derivatives trading just might have averted the calamitous bust now engulfing the US and global markets. Instead she was met with scorn, condescension and outright anger by former Federal Reserve Chair Alan Greenspan, former Treasury Secretary Robert Rubin and his deputy Lawrence Summers. In fact, Greenspan, the man some affectionately called "The Oracle," spent his political capital cheerleading these disastrous financial instruments.

On Thursday, the New York Times ran a masterful and revealing front page article exposing the culpability of Greenspan, Rubin and Summers for the era of dangerous turbulence we live in.

http://www.thenation.com/blogs/edcut/370925/the_woman_greenspan_rubin_summers_silenced

[Metta]

1. Bravo to the times and to Ms. Brooksley.

Heros there.

[Captain_Nemo]

2. I think her story is so big. Here is a part of the Wiki page on her:

"While on the commission and after becoming its chair two years later, Born tried to bring derivatives, specifically swaps that are traded at no central exchange, known as the dark market, and thus have no transparency except to the two counter-parties, under the regulatory oversight of the CFTC. She was opposed in this effort by Federal Reserve chairman Alan Greenspan and Treasury Secretaries Robert Rubin and Lawrence Summers.

<1> Specifically, on May 7, 1998, former SEC Chairman Arthur Levitt joined the other members of the President’s Working Group – Treasury Secretary Rubin and Federal Reserve Board Chairman Greenspan – in objecting to the issuance of the CFTC’s concept release, in which Born attempted to shed light on the dark market, citing grave concerns about the possible consequences of the CFTC’s action. In particular, these concerns focused on the risk that the report would increase legal uncertainty concerning swaps and other OTC derivative instruments and, thus, destabilize what had become a significant global financial market. The potential turmoil created by the report and concerns about the imposition of new regulatory costs also might have stifled innovation and pushed transactions offshore.

<2> As the financial crisis of 2008 gained momentum, newspapers began reporting on what might be some of its causes, including the adversarial relationship Greenspan, Rubin and Levitt had with Brooksley Born, <3> with Greenspan leading the opposition, and how Born's recommendations were suppressed.<1>

She is retired from Arnold & Porter and has declined to comment on the unfolding crisis."

[elleng]

4. Times reference OLD.

.

[Captain_Nemo]

6. Excuse me? Here's a Bloomberg story on her.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aXcq.r6xLf4g&refer=home

"Nov. 13 (Bloomberg) -- The acting chairman of the Commodity Futures Trading Commission is among U.S. officials now seeking regulation of private derivative contracts, echoing an unheeded warning a decade ago by a predecessor, Brooksley Born.

While leading the CFTC in 1998, Born declared that the unregulated contracts could ``pose grave dangers to our economy.'' Born, a lawyer who according to futures attorney Dan Roth battled fellow regulators with the ferocity of a courtroom litigator, lost a turf fight with Alan Greenspan and Robert Rubin over policing the deals.

After Congress exempted the contracts from U.S. oversight in 2000, the market swelled from about $100 trillion to $684 trillion by June 30. The growth included credit-default swaps and collateralized debt obligations, custom-made products barely in use under Born's reign. They played a part in almost $1 trillion of global bank losses and are prompting lawmakers to seek controls on the complex deals.

``Brooksley has been vindicated,'' said John Tull, a CFTC commissioner from 1993 to 1999. ``Had they listened to her, I think this catastrophe could have been averted.''"

[elleng]

7. This is GOOD; the Times article referred to elsewhere was OLD.

You are Excused.

[elleng]

9. Guess they just can't take it.

"Born, a lawyer who according to futures attorney Dan Roth battled fellow regulators with the ferocity of a courtroom litigator, lost a turf fight with Alan Greenspan and Robert Rubin over policing the deals."

[FrenchieCat]

11. Strange, but I don't see Summers' name in that article.

Yet, he seems to get implicated by OP. What Am I missing? :shrug:

[elleng]

3. They DISAGREED with her /or vice versa.

http://en.wikipedia.org/wiki/Brooksley_E._Born

[Captain_Nemo]

5. But, she predicted an important financial crisis. She wanted oversight. Why is SHE not on the team?

She went out on a limb for the country. She saw the problem. She was shunned. I would think that Rubin and Summers should be shunned now and SHE should be advising him. Has anyone asked him why this isn't happening?


"As the financial crisis of 2008 gained momentum, newspapers began reporting on what might be some of its causes, including the adversarial relationship Greenspan, Rubin and Levitt had with Brooksley Born, <3> with Greenspan leading the opposition, and how Born's recommendations were suppressed."

[elleng]

8. She's not on the team because she disagreed with them;

we can only speculate about the personal relationships etc. I've certainly been hoping that she'd be involved today.


EDIT: They can't take it: "Born, a lawyer who according to futures attorney Dan Roth battled fellow regulators with the ferocity of a courtroom litigator, lost a turf fight with Alan Greenspan and Robert Rubin over policing the deals."

[slinkerwink]

10. wow. what a great story!

[girl gone mad]

12. Hopefully someday Obama can dump the economic losers..

he's saddled himself with.

It's ironic that Summers has issues with women in the sciences, but this brilliant woman saw the potential for great harm from this regulatory change and fought against it, while her male colleagues failed at their jobs in virtually every respect.

[liberalsince1968]

18. So true. Obama has some LOUSY taste in advisers.

[S H Mills]

20. Obama's Advisor Summers fired Derivatives whistleblower at Harvard Management Co

Harvard alum Iris Mack, MBA/PhD communicated with Larry Summers (former Harvard President and current Obama economic advisor) to express her concerns about how her Harvard Management Company (HMC) boss Jeff Larson used derivatives to manage an HMC portfolio. Larson eventually left HMC to start Sowood hedge fund with hundreds of millions of dollars of Harvard alums' donations. Sowood was one of the first hedge funds to blow up during the subprime mortgage derivatives crisis.

Dr. Mack communicated with Summers' office regarding such derviatives trades. Perhaps, she could have saved Harvard alums hundreds of millions of dollars if Summers had bothered to continue to hear her out before forcing her resignation. There is a wealth of information describing this derivatives whistleblowing case: correspondence between Dr. Mack and Summer's office (emails, faxes, snail mail, phone records, etc.); legal documents; reports from FBI and DOJ interviews, etc.

Given all this, you have to wonder whether Summers was either too
(a) corrupt and wanted to coverup up something(s) at HMC.
(b) arrogant to think that Dr. Mack had anything of value to tell him about mathematical finance and derivatives. Please recall Summers' comments about women and math. Also, please note that Dr. Mack has a doctorate in Applied Mathematics from Harvard and a Sloan Fellows MBA from London Business School.
(c) incompetent to understand what Dr. Mack was trying to warn him about regarding derivatives trades in HMC portfolios.

Did Summers try to silence Dr. Mack the way he, Rubin and Greenspan tried to silence Attorney Brooksley Born of the CFTC?

[Kaleko]

13. Reversal of fortune. She should at least get her good name back among her peers

while Greenspan's name is flaming out as we speak.

[pnorman]

14. From a Comment in that Nation article ("frosty zoom"), Ms. Born's testimony was able to be Googled.

Here are the complete hearings: http://commdocs.house.gov/committees/bank/hba56675.000/hba56675_0.htm

pnorman
On edit: Here's the pertinent quote: "The President's Working Group also agreed that if these measures prove to be inadequate, serious consideration should be given to the direct regulation of hedge funds and other highly leveraged institutions, including such measures as capital requirements. In addition, direct regulation of derivatives dealers should be considered and indeed is currently being studied by the President's Working Group in the context of its ongoing study on the over-the-counter derivatives market."

[goclark]

15. Maybe Mrs. Andrea Mitchell Greenspan will interview

her someday.:sarcasm:

Greenspan is a crook in my book.

[depakid]

16. Ms. Born's not considered a team player

Mary Shapiro on the other hand is.

Formerly of FINRA (one of the private "regulatory" agencies who dropped the ball and/or was intimidated and looked the other way) -she's a good example of someone who who will do what they are told by higher ups.

Hey- that's just how some people are.

Ask Sir Allen Stanford.

[Captain_Nemo]

17. Where's the change for women here? Iceland's female MP puts blame squarely on all male gov't

If Iceland's new female Prime Minister puts blame squarely on all male gov't why can't we?

Why is Obama surrounding himself with men on this financial team? Looking beyond the fact he has two of the orchestrators of this disaster (one of whom, Summers, said outright that women couldn't do math) on his team why aren't people seeing that a heavily male financial team (or all male) is not change?

Other countries are seeing that all male government is a disastrous. women are over 51% of our population. Where are our voices?




http://blogs.moneycentral.msn.com/topstocks/archive/2008/10/14/iceland-blames-male-ego-for-financial-meltdown.aspx
From 2008
Iceland blames male ego for financial meltdown
Posted Oct 14 2008, 04:01 PM by Anthony Mirhaydari
"Now, with both its currency and stock market crashing, the small Nordic nation is trying to clean up the testosterone-fueled follies by appointing two women to run New Landsbanki and New Glitnir, the nationalized banks created after the collapse of Landsbanki and Glitnir. According to one government minister, this is all too typical: "The men make the mess and the women come in to clean it up."

Since 2003, Elín Sigfúsdóttir was head of corporate banking at Landsbanki. Birna Einarsdóttir was promoted to head of domestic commercial banking at Glitnir last year. It's worth noting that besides these two, there was only one other women on the combined executive teams of Glitnir and Landsbanki. It's no wonder that psychologist Julia Noakes told the Financial Times that there wasn’t enough "femininity" in the business."

From 2009 WaPO
In Banking Crisis, Guys Get the Blame
More Women Needed In Top Jobs, Critics Say
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/10/AR2009021002398_pf.html

[Ceela]

19. It Can't be a Coincidence...

That Summers is involved and a woman's voice is being ignored? Given his history why doesn't that surprise me? I think more women's voices would be a benefit for the President. The advisors he has now are not doing him any favors.

[sfbabe3]

21. Wow--as we sink financially

Thanks for posting this story. IT made me sit up and take notice. Why was she so ignored? Another woman who ticked off Summers?
He's a famous oinker, e.g. Girls can't do math. Problems with women at Harvard when he was Prez. This country is in the financial tank, and we
need all the brains we can get.