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Moneycontrol.com – Joseph Stiglitz, a professor at the Columbia University and the 2001 Nobel Prize winner, said the US government’s bailout packages designed for financial institutions may not work. “It is a peculiarly-structured programme,” Stiglitz said, “The government puts in 92% of the money, the private sector walks away with 50% of the profits and the government absorbs almost all the losses. What kind of partnership is that?”
The Nobel Prize winner said the financial system in the US engaged in too much risk-taking. “If you are a bank too big to fail, you have a one-sided bet. If you win, you walk off with the profit. If you lose, you are too big to fail, so the government picks up the losses.
Bloomberg – Billionaire investor George Soros said the current economic upheaval has its roots in the financial deregulation of the 1980s and signals the end of a free-market model that has since dominated capitalist countries.
Liberalization of the financial industry begun by the Reagan administration has led to a series of crises forcing government intervention, Soros told economists and bankers at a Feb. 20 private dinner at Columbia University in New York. The global recession, triggered by the collapse of the U.S. housing market, has “damaged the financial system itself,” he said.
West Palm Beach (HedgeCo.net)- William Galvin, Massachusetts’ top securities regulator has charged the hedge fund manager of the River Stream Fund with improperly soliciting investors.
The investigation also turned up a brokerage statement that showed the fund had $1,625 in its account in April. Regan had said he ran $15 million. The regulator said investors who entrusted their savings to Regan feared the money is now lost.
Investigators found River Stream client data thrown into a dumpster near an empty office where Regan said he worked. Wiliam Galvin, whose job includes protecting investors in Massachusetts, has waged aggressive campaigns against anyone caught trying to cheat investors.
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