Steve Syre

Welcome back top rhetoric did you while listening to -- it's more -- 680. WRKO because it's Thursday you know Todd is here so it's the TNT taught -- taught my coffee by the I think lingering image copy. All right all right but one of the symbol that's -- the movements and -- To make the mistake apologize I'll write it down next thing you know every day at this time. We goat to latch Steve side of the Boston Globe columnist as we do I tell he was alive when we go to him -- you think he does that sound like eyes and can't a half dollar Scott hot. Man he was in the studio the other day it was Ireland's pro Steve's I was sitting right where US and he got to him. It was fabulous I've known Steve for a number of Dario -- of these financial Wednesday. He is shedding great insight goodness illumination pays Steve's -- allies this morning.

It and it -- no example of when I was in the this has gone I don't I got.

All committees hold an elbow below break this up with Jason I'm sure to be sympathetic. Hey Steve -- senate votes 74 to 25. At least one step forward in a pretty decisive vote. Which -- sense of the dynamics down at the end you know specifics of the bill that you might be either encouraged by a troubled by.

Well I mean obviously there's a whole bunch of new tax breaks are extensions. In there that again I don't really have any opinion on others and it's it you know what you're dealing with the situation that was. Created originally by irresponsible. Lending and borrowing you're gonna you're essentially. Going further into deficit spending from -- tax break that the solvent is. Is interesting but there are two things that actually. A fact. The economy and the markets and institutions that are in this thing and I don't they're going to work or not but they're definitely different. One is that the idea that's been push for about a week now and and has been imbedded into the into the legislation which is. Two increased deposit insurance. That the F yet seat covers for banks would from a 100000 which obviously it is now. The 250000. Which. Again I don't know if that's really going to have a big impact I think. When people were really at at their most. Fearful -- in recent times that there was some indication there was a lot of money moving around. Between banks and that people. You know -- were either had uninsured deposits or or basically we're not acting very rationally in terms of moving money that was even. -- short at that point but.

Yeah there you you're talking about people to breaking up their accounts amongst many banks to protect themselves from --

It is obviously an important thing to do what you have uninsured deposits but no money was essentially sloshing around. The system which just created more confusion and and perhaps. Unpredictability. Of a sort of we're eager liquid financing if that's what deposits are bank to. And obviously this liquidity issue is very important right now and so. Increasing the deposit insurance to 250000 which he could reasonably say it is that is a more modern. Number is that there -- 100000 as the number that was that a long time ago when when all the numbers were a lot smaller yeah.

Like forty years older something's right.

Right and so. You know I don't think there's any wrong with that the only downside to that is you know the FDIC really didn't have that much money to cover its liabilities when it was ensuring a hundred doubt a 100000 or deposits. And we talked about how much capital -- is essentially. Represent 1% of all the deposits insured while. Now you're gonna essentially more than double potentially. The amount of accident insurance so you're you're taking that question and making it even better and turn. The Treasury's gonna offer them. Well on the more money which is what it's gonna take that. So anyway that deposit insurance may be a positive who knows but that's something. It's in the -- the second thing is something that again it's happening on the agency leveled out on the administration leveled necessarily which is the FCC. Came out earlier this week with. -- ruling that basically said that. Banks and other institutions. Can sort of modified for the time being this requirement that you'd take assets. And mark them or or put a price on them that reflects what you could get for the if you saw the right.

This is Barack or -- this is the mark to market definitely you've talked about Steve so the SEC is issued a clarification. Slash modification of that.

Absolutely and basically it's it's unclear exactly how you know how you can recalibrate that you can't say well you know visible we paid for it you know way back in the good old days this is the you know this is my high in the sky estimate but I think. -- what you're going to see is more leeway in saying well you know maybe if I had to go into you know this -- market right now I could sell it. Port 25 cents on the dollar but. You know in in reality is a reasonable thought that you know in a more normal time it is avoid what it used to be but it's worth fifty cents on the dollar debt and so I considered that and what the Senate did last night was essentially. Role that concept into their planet well also. Those are two things. Increased deposit insurance helped this kind of liquidity at banks issue and the accounting change that helped the banks in terms of what they have to. It's determined for accounting are.

So Stephen as you look. As if you look at the changes that a man made of legislation and as congress' wrestled with this. Are we seeing improvements with time in terms of the financial aspects not all the -- that there adding. They have -- in the the adjacent -- that they're thrown into the bill but in terms of the fundamentals of economics is getting better as they work at over.

I think those are are incremental improvements that are in it you know -- this accounting think could be a big deal and it easing. The crush at the moment right now but he is in the end the real problem and assist system isn't that. You know accounting rules make you you know declare that something is unreasonably low price. It is that. You bought something that was way overpriced and I got to deal with that's that's that's really 80% of the problem but. But there is that element on the other -- that you're using that is. Incremental but real.

Because it'll it'll put more fuel and -- things when the when he engineer Estonia.

Absolutely -- if -- banks stressed out right now I don't have to necessarily take as big loss or or a loss just because. Something is is virtually untreatable there at the moment and and therefore almost. Valueless at the moment and so. You know sort of giving a little bit of question that so. If I do otherwise would've had to take a billion dollar loss maybe you know my losses 500. Does that make numbers will -- It is therefore that you we know -- it's on paper reverberates through all these. Accounting issues at financial institutions.

Steve the issue of executive compensation limits on that recovery of excesses like. Seems to have actually. It's no longer controversial I don't hear anybody. Raising hue and cry on -- intermediate -- say kind of insist upon. The a pound of flesh and abuse and that that phrase deliberately because that's the sense that I have people want to have a sense of at least -- justice --

Absolutely you know when this first started -- or do we are out there on the radio talking about how they'll Paulson was was that was complaining about this it was sent to caddick you know -- That is that there's no way that's not going to happen in this city it's completely unrealistic and in other events that have. Move forward very quickly it and you know it's as you point out it's not even worth debating anymore there's still a lot of people executives in the financial industry. Who you know complain about this you know who knows who's gonna. You know participate now because of this book -- about that that's too bad. But in the end I think lots of people are going to participate is just going to have to heated on the public apathy.

Steve one last question our Congressman Lynch was on the the other day with us any give an explanation for the reasons. Multiple reasons that he voted no we are -- little while ago saying hey what about this. We're about a small transaction -- every transaction. On all the stock markets S&P NASDAQ you know well whatever. 25 cents a transaction something it we we we don't need the specifics. To put into a pool that would in hot paper this bailout or whatever you want --

You're gonna end up paying that transaction is well that's going to be be new as we buy and sell stock does it quiet why it was quite that good for me.

Well it's not good for you other than this if the other player it's obvious like the turnpike a user -- You know that the person who is.

All players -- whether it's there are -- individual accounts or four point is our pension plans our state government. It you know in the end I think what you're saying is we're going to tax ourselves. It is to to stick it to the the finance.

Well that's all taxes are. Maybe he's talking about have an insurance plans like unemployment insurance we pay for ourselves a company's work for pay for which means a customer's. Going to their stores or whatever pay for better provides a buffer so the next time these idiots screw things up again. Would build the buffer fund will be there.

Well. Perhaps I would I would say it would that we know we're we're we're building our own rainy day fund that we are cost.

Steve's site will never be characterized as a populist but he could be described as a welcome guest -- had been restored Steve. Can't wait to get it tomorrow thank you variety of time and insight I suppose we'll have more to talk about tomorrow and it might even be -- different different topic that bailout but thanks now. You know I'll love the topic is the truth I don't wanted to go to -- for talks are will talks are tomorrow let's. The business. The businesses Angola and -- Arab pale.

You guys in the Arab why that's. Forget the little blue pills -- the convention tape in the city.

You are a depraved demands -- science which is why I love the ball was ever sell hot hot hot hot. -- Steve's I'll be back tomorrow on the regular dive -- parents -- taught and I short break and we'll be back do you and your calls on AM 680 WRKO.