YouSaid · the spoken record

Arthur Levitt

lines on the record: 66
first: 2015-07-31
most recent: 2015-07-31
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Arthur, I can't thank you enough for your time and your insight and your ability to really flesh out a discussion on regulations. I hope our listeners have enjoyed listening to our conversation about regulation. If you enjoy these sorts of discussions, be sure and look up an intra down an inch on Apple iTunes. You can see all 52 of our previous conversations. You're actually the first masters in business of our second year. The show has now been on a year and a week. So thank you so much for being our inaugural guest for our second year. Twitter at Rithaltz. Special thanks to my researcher Mike Batnik, to our engineer Matt, and to our producer Charlie Vollmer. I'm Barry Ritholz. You've been listening to Masters in Business on Bloomberg Radio.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So let's sum up our conversation because I know you have places to go and people to see. On the one hand, we went from a regulatory extreme of radical deregulation to excessive regulation. We really need to be somewhere in the middle. You seem frustrated by the politicalization of the process of nominating commissioners and indeed how divisive politics has become across many regulatory entities. Clearly you are very optimistic about the future of finance and the future of America given where we are today. Is that a fair assessment?”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's certainly plenty of scammers all over the place these days. They don't go away. They're like roaches. You flick on the light. They just find a different crevice to hide in.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“On the software side, whether it's the automated algorithmic asset managers derisively called RoboAdvisors to the variety of different ways that funding can look at the crowdsource fundings for something like Oculus Rift. This is a company that was putting together a handful of virtual reality headsets and just scraping by. They do a Kickstarter campaign and the next thing you know they're bought by Facebook for billions of dollars. That sort of thing was not possible 10 years ago.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“A couple of years ago, we talked earlier about Paul Volcker and what a man of integrity. He is. He had given a speech where he jokingly said, the only financial innovation there's been in the past 50 years has been the ATM. And that was a little tongue-in-cheek. But the truth is, in the intervening five years, we've seen a run of financial technology. It's almost like he shot the starting gun, and all these little things that were kind of in development before, they all came running out very, very quickly.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's so hard to know what 50 years hence is going to look like. Someone showed me this article about from the New York Times from like 30 years ago, and it was one of these early looks at self-driving cars. And the funniest part about the self-driving cars, there's a little cartoon graphic with it, a little, I don't want to say animated, but just illustration. And there's a person sitting in the self-driving car reading an open paper like a New York Times on print matter. They got the self-driving car part right, but the idea that all these things are going to flat screens and Kindles and things like that was so far beyond the comprehension of people just 20 years ago. So the question I have to ask you is what is beyond our comprehension 20 years hence.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Know there's a conference I go to every couple of years. I don't want to go every year because it's overwhelming, but I go every two or three years and it's out in San Diego and it's a run of either college students or recent college grads mostly Technology, some fintech, some actual tech. And you see the creativity and the innovation and the drive that these kids have. And it's hard not to be optimistic about the future when that generation, that, you know, when I grew up, the internet was not really fully formed. And starting from that base, their outlook and their creativity really quite amazing.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, I'll look that up. That's really interesting. But when you stop and think about that underlying chain, which you couldn't issue coins if there wasn't a way to validate and verify it mathematically, turning that into a form of identity is really quite fascinating.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, a friend of mine used to work for a firm, they got bought by Yahoo. He moved out to California. He's a serial entrepreneur. He's built and sold. I think this is his third or fourth company. What this company did, you mentioned BitPay. So there's a huge issue with identity fraud and the ability to know who's really who and what underlines Bitcoin is something called the blockchain. Which is the mathematical way that you can tell this is really this person's transaction and this coin was sold to this person, well, they're in the midst of creating this technology that allows banks to instantly authenticate a person by this blockchain and in theory it's going to do wonders for stopping identity theft, stopping those sorts of frauds, allowing banks and brokerage firms and other large financial institutions.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“He and I are on a board together of another technology company. And since it's private, I don't want to talk about it, but what they do is it's not peer-to-peer like you see where people are making small loans. It's a more commercial peer-to-peer lending for real estate where a buyer and a seller of real estate loans, big commercial loans, are able to get together and actually be much more productive, efficient. It's really fascinating. He and I both are on their board of advisors. The changes that technology, and the phrase these days is called fintech, the financial technology world that's changing, it's fascinating what's taking place in that space.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Basket of stocks following any given theme you want, and you push one button and you buy all the stocks that are very inexpensive transaction costs.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“The good rule of thumb is unless you're willing to put the time and effort in never buy the first. 1.0 of anything, you always have to wait to subsequent iterations. It always becomes, look at Tesla, the first Tesla car was kind of, eh, the new one is, it looks spectacular. Spectacular, right? 0 to 60 in 2.8 seconds. Those are crazy. Those are Bugatti, Viron 1.6 million dollar numbers.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I don't really think of you as a tech sort of guy, but here you are. That looks like an Apple watch on your wrist. How much of a tech gadget head are you?”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“All right, so let me shift gears with you. We've talked about We've talked about Dodd-Frank. We've talked about the Volcker rule. We've talked about who should be overseeing 401ks and IRAs and the difference between the fiduciary standard and the suitability standard. We've talked about the commission itself. I consider you're obviously an expert. I know very little about this. So I hope I asked you good questions about that subject. But let's shift gears a little bit. One of the things I really enjoyed about our first conversation, the first time you were on, it was almost a year ago, it was last summer, was how optimistic you were about the future that this generation was going to find their way into the labor market and start doing good things. Are you still as optimistic as you were a year ago?”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, so that seems unrealistic hope. All right, we can work with that. It seems that this has been an ongoing problem, not just at the SEC, but it's been an issue across all the various regulatory entities, from NASA, even things like NASA and the EPA, as well as the Department of Education and other points.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, politics is fine for Congress, but when it comes to something as important as the SEC, put the ideology aside and be pragmatic and get the job done.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, how much of that is a reflection of how the world has changed since the late 90s, how the United States has changed, and how much of it is just, you know, politics has become coarser and more divisive.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So it's three, two Republican, Democrat, when it's a Republican in the White House, and 3-2 Democrat Republican when there's a Democrat in the White House. So how do you get past that logjam? Is it really just Finding structural experts and accounting experts and SEC law experts or what's the alternative?”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So that's not an unfair objection. But to me, it's more fascinating. She's objecting to the Democrat as opposed to the Republican.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Why did Warren object to a nominee from her own party? I mean, I understand she's a former Harvard law professor and understands the legalities of the commission as well as anybody. But that's kind of unusual. Why would she raise an objection?”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So let me push back against you a little bit. I'm going to play Devil's Advocate and say, look, we elect a president and he's either, let's look at the past two presidents. We elected George W. Bush, who's a fiscal, a fairly conservative guy. I'm going to redo that. Charlie just added it forward to this. So let's look at the politics of this. We elect somebody who's conservative, like George Bush. Isn't he entitled to fill these appointees with conservative ideologies to various commissions? And fast forward, we elect somebody who's more left of center like Barack Obama isn't he entitled to have his political ideology represented on these commissions?”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Let me interrupt you there. And again, I haven't been in grad school for many a decade, but I learned that most, when I studied securities regulation, when I studied corporate law, it was always people who were market structure experts, accounting experts, legal professors with a background in securities law. When you were chairman, that certainly.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“There was a number of people who thought she was going to run for president, or at least for the nomination against Hillary Clinton. She said she wasn't running. And so far, it seems like she's not running. But she recently raised some objections to some nominees for the commission, for the SEC commission. What's going on with that? Why is she objecting to some people? And we could talk a little bit more how the commission has changed since there.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“There was a lot of abuses that took place beforehand that I thought it was a very obvious set of circumstances. 40 pages of boilerplate for a credit card. Nobody knew what they were really signing. All sorts of fees hidden in banking and checking accounts. And then my favorite was the lack, even though there were all these disclosure documents on mortgages, when they got crazy, when they got creative during the subprime, I don't think people realized what they were really getting into.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So let's talk about another new regulatory entity, the Consumer Financial Protection Board. This was Elizabeth Warren's brainchild while she was still a professor at Harvard Law School and ultimately was past, what are your thoughts on that new agency?”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, the argument that the state made was during periods of exuberance, everybody seems to forget their regulatory responsibility and back away and not get in the way of a happy market.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“What was the question I had asked? Oh, the extreme. We've gone from one extreme to another. So, are we compelled to always swing from one ridiculous extreme to the other? Can we ever get a balance in the middle?”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so will the pendulum swing back to a balanced middle or are we compelled to always be at one absurd extreme or the other”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we went from radical deregulation and a shedding of all these prophylactic measures to the opposite extreme. Now there's too much regulation.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Couldn't we say the same thing about the, look at all the massive fines we've seen? Isn't that the same true about treasury? It wasn't even justice. It was Treasury Department and SEC issuing these giant fines”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Apparatus because hey, we're here in New York, and all of these big banks are located here as well. What does the New York State Department of Financial Services have to say about regulation of big financial brokers and big banks?”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And Arthur is, for those of you who know your way around a radio dial, Arthur is a regular on Bloomberg radio, has his own shows where he voices his opinion and chats with various guests on weekends. It's always a fascinating conversation. There were a number of subjects we didn't get to in the earlier part of our conversation. And before I get too far, let's click through those and get to the rest of our questions. First, a lot of people may not realize we're here in New York City, which is part of the great state of New York. And after the financial crisis, it looked like New York State really beefed up their own state financial regulatory”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“We've been speaking with Arthur Levidge, the former chairman of the Securities Exchange Commission during this fifth anniversary of Dodd-Frank, talking about regulation. If you enjoy this conversation, be sure and listen to our podcast extras where the discussion continues for as long as our guests have time for. Be sure and check out my daily column on Bloombergview.com. Follow me on Twitter at Ritholt's Arthur. I know you tweet your Twitter handle is. At a Levitt, I'm Barry Ridholtz. You've been listening to Masters in Business on Bloomberg Radio. Welcome to the podcast extras. I'm Barry Ritholtz, my special guest today is Arthur Levitt. He is the former chairman of the Securities and Exchange Commission, and indeed you are the longest serving chairman, weren't you?”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And there's a reason that Vanguard has risen to over $3 trillion with a trillion dollars over the past few years. A lot of people have come to that same realization.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's an ongoing issue. I'm fond of saying the best advisors are behavioral counselors as well as financial advisors because the biggest impediment to success seems to be investors' own behavior.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, Vanguard put out a white paper a couple of years ago that showed the impact of one percentage additional fee above some low modest level. And over the course of 20 or 30 years.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Much smaller accounts. 401ks can scale up to be fairly substantial. The maximum contribution to IRAs or its indexed inflation indexed, but it's not that it's $5,000, $6,000 a year. It's not that much money compared to what you can afford $01k is $18,000 if you're under 50, 23,000 if you're over 50. There's a huge, huge difference between the two.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Next election So we've been talking about 401ks and other tax deferred compensation packages. There's another tax-deferred entity called the individual retirement account, the IRA. That doesn't get covered by the Department of Labor fiduciary standard, should it?”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And a full disclosure and transparency, because the Brits basically said, hey, if people aren't making money, if these fees are high and not disclosed, if they're hidden, that's ultimately going to impact 10, 20, 30 years down the road, our retirees. And if there's a shortfall, we the government are going to have to make that up, which means you, the taxpayer, are going to have to make that up. I thought that would be an argument that would carry the day even amongst conservatives, but it seems that I was too optimistic.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, when you look at around the world, one of the things in the United Kingdom did a few years ago was basically mandate a lower fee on all of their retirement accounts.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So let's think about this a little further. When we look at the overall alternative standards, so on the one hand, the brokerage industry has suitability. When you look at the fiduciary standards, it's much higher. Suitability is vague. I've always said suitability is don't sell grandma Facebook IPO shows.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That clearly creates a conflict of interest or at least so the broker has an incentive to go to the highest commission product. That's not in the investor's best interest.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I don't really see that happening anytime soon because it's Stop and think about this. It's all part of the compensation package. It's all part of wages. And why would you want to remove that fiduciary standard over somebody's wage package and give it to somebody who may be offering conflicted advice? It doesn't make any sense to proceed that way.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So let's talk a little bit about that. So the SEC says we're the entity that governs brokers and markets, and we suggest a fiduciary standard for everybody, but it doesn't go anywhere either with the commission itself or Congress. And then the Department of Labor says, you guys have your own conversation about that rule, but we as the Labor Department, we regulate 401ks and 403Bs and other tax-deferred savings for retirement, because these are considered wages. These are considered part of compensation. And so we get to regulate. And while you guys are diddling around with that, we're going to state you must follow the fiduciary standard for this. It's too important to people's retirements.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And for those people who may not be familiar, the fiduciary standard is a much higher standard which says you can only do what is in the best interest of the client. It makes for a very simple compliance decision-making process. Hey, is this in the best interest of the client or is this in the best interest of somebody else? And if the answer is it's not the client's best interest, you can't do it. But there certainly has been a lot of pushback on that from the brokerage industry and from Finra as well.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's fascinating. You're listening to masters in business on Bloomberg Radio. Today we have a special edition, financial regulation during the fifth year of Dodd-Frank, and I have a very special guest, former SEC chairman Arthur Levitt. One of the things that has been fascinating over the past couple of years has been the debate about the standard of care owed to investors. In fact, as part of Dodd-Frank, the SEC had an issue a set of suggested guidelines and effectively the SEC said everybody should have to adhere to the fiduciary standard. But that was not put into place. What are your thoughts on that?”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, this is really a fascinating situation. So let's move back to the SEC. There was a big New York Times article over criticism about the SEC use of in-house judges, and I heard you on your radio show describe why the SEC has practically been forced into this because of their budget situation. First of all, what is an in-house SEC judge?”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And he seems to be an exception. The changes that have taken place in Vatican City seem to be very significant. We're not seeing that in the rest of the business or political community.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So let me push back a little bit the Pope. This Pope seems to be very out there. Generating all sorts of interesting taking positions not typical.”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“What does that say about us and what as a nation and what does it say about Congress that it took one of the people with the most amount of credibility after the crisis to get something like this done?”
2015-07-31 · Masters in Business · Former SEC Chairman Arthur Levitt: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source