Former Sen. Gramm retires from UBS
by Linda Beale
Former Sen. Gramm retires from UBS
Let’s see. Gramm pushed through the Commodities modernization act in Dec 2000–the thousand pages that nobody read but that made sure that credit default swaps (CDS) stayed unregulated. CDC then went on to form one of the pillars of the financialization of the economy–as they mushroom from a few billion in 2000 to about 70 trillion in 2007–all a castle of cards built on a foundation of sand and tangling the world’s too-big-to-fail banks in a web of speculative bets and what looked like easy-money guarantees. Then it all came tumbling down with the realization that the huge mortgage loan securitization industry and the CDOs, CDO-squared, and CDO-cubed transactions were filled mostly with hot air.
When Gramm left the Senate, he went in 2003 to UBS, a bank whose profits built on speculation and gambling with other people’s money he had made much cushier with the commodities modernization act . The proverbial swinging door swung nicely for Gramm. He was a vice chairman and “senior adviser to investment-banking clients” and “worked with governments around the world on behalf of UBS”. Wall Street Journal, Feb. 11, 2012, at B13. The “Who’s News” note says tht Gramm “helped build the UBS Office of Public Policy in Washington.” In other words, in addition to schmoozing with bank execs and wealthy clients, Gramm was a lobbyist working his old pals in DC on behalf of the bank.
Guess the bank must have been disappointed when he wasn’t able to get them out of the mess their greedy tax evasion business got them into. Hmmm. That does make one wonder just how much Gramm knew about UBS’s business of pushing secret accounts that the IRS couldn’t trace, smuggling diamonds in toothpaste tubes, and generally doing whatever necessary to make loads of money by helping US taxpayers avoid their tax liability under US tax laws?
PS In a “serves it right” result, UBS reported a fourth quarter net profit decline of 76%…..
crossposted with ataxingmatter
You left out the Gramm family influence on Enron.
Steve
Gramm was also the finance advisor to the McCain Presidential Campaign in’08.
He is one of the genuine villains of recent history.
JzB
Steve:
You mean his dear wife Wendy, the lobbyist for Enron. Who could ever forget the Energy Loophole built into the Financial Services Moderization Act.
Hi Linda:
Barry Ritholz assigns Phil the #3 spot for causing the 2008 collapse of Wall Street and subsequently TBTF. http://www.softpanorama.org/Skeptics/Financial_skeptic/Casino_capitalism/12_Apostols_of_deregulation/Gramm/index.shtml
Back in 2008, Galbraith called Gramm “. . . the most aggressive advocate of every predatory and rapacious element that the financial sector has. He’s a sorcerer’s apprentice of instability and disaster in the financial system.” He also trashed Gramm’s economics Ph.D. dissertation at http://thinkprogress.org/economy/2008/07/11/172269/gramm-galbraith-mcca/ Still, I think Galbraith was being kind.
Wendy Gramm was also Chairwoman of the CFTC. inthar capacity she granted waivers for CDSs ( no she had no authority to do so) creating a legal mess which lead to Clinton accepting the need for new law ( written by Phil). That’s family harmony.
I was going to challenge the idae that UBS profit are built on speculation. I think their core comptence is facilitating tax invasion. Not mostly of U S taxpayers. It’s just that they messed with the IRS and the US stood up to them. Don’t ask how much Italian money they have laundered.
My sense is that UBS is as famous for bieng suckers. as Goldman is for being a. vampire squid ( squids rely on suckers). 2 good rules for remembering trade tales is GS always wins and UBS always loses.
I am trying to imagine who could possibly be ranked 1 and 2if Gramm is only third. I’m guessing Greenspan is somewhere.
Between Gramm and W you have to wonder why anybody would trust another texan with any authoritah.
“Oh hi Governor Perry…”
Robert:
Long time and no talk. Italy must be great right now. Next time I am in Bavaria, I will take a swing down. Greenspan is Uno and The Fed with Monetary Policy is dos. Then there is Moody’s etc,, SEC, Oringinators and lending banks, Congress, Bank Reguators, etc