Monday, September 22, 2008
Another shoe drops – whatever that means
Goldman, Morgan Stanley to become regulated banks
Goldman Sachs and Morgan Stanley, the last surviving big investment banks on Wall Street, have become regulated banks. The move effectively spells the end of the investment banking industry as a separate sector, leaving behind only small boutique securities firms. In doing so it ends the decades old division of the US financial industry into two halves, which dates back to legislation passed after the Great Depression.
Posted by gardeniadotnet @ 07:05 AM (912 views)
7 thoughts on “Another shoe drops – whatever that means”
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growler says:
It also means they’d be eligible for more support from the Fed – should they need it 😉
techieman says:
Topic for today “The demise of the investments banks has been brought about to a large extent by the repeal by Clinton of the Glass-Steagall Act”…. Discuss!
C’mon any A level (or whatever they call it these days) economic students out there..
Clue : http://en.wikipedia.org/wiki/Glass-Steagall_Act
timmy t says:
Growler… Don’t be cynical. They probably just want to expand the range of services they are able to offer customers…
renting2 says:
gardeniadotnet, was your title a question? If so the following may or may not interest you:
Waiting for the other shoe to drop.
1. (idiom) To defer action or decision until another matter is finished or resolved; to await a seemingly inevitable (undesirable) event.
http://www.worldwidewords.org/qa/qa-wai1.htm – Its source would seem to be the following story. A man comes in late at night to a lodging house, rather the worse for wear. He sits on his bed, drags one shoe off and drops it on the floor. Guiltily remembering everyone around him trying to sleep, he takes the other one off much more carefully and quietly puts in on the floor. He then finishes undressing and gets into bed. Just as he is drifting off to sleep, a shout comes from the man in the room below: “Well, drop the other one then! I can’t sleep, waiting for you to drop the other shoe!”
gardeniadotnet says:
>was your title a question?
Yes, I suppose it was. Thanks for that.
G.
drewster says:
techieman,
Absolutely agree. Glass-Steagal was created in the aftermath of the depression; the euphoria of the financials boom made congress feel it wasn’t necessary. According to Wikipedia [i.e. not necessarily accurate], Phil Gramm was the senator mainly responsible for repealing Glass-Steagal. He received over $1m in campaign contributions from the Securities & Investment industry in the years preceeding the act. He was until recently the most senior economic advisor to John McCain’s presidential campaign team. No wonder McCain is languishing in the polls.
Growler,
You are correct that is pretty much the only reason they are becoming “banks”.
growler says:
Fancy that
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4803244.ece