Corporate welfare: Citibank drafted derivatives subsidies added to spending bill

[Winehole23]

The House of Representatives wants to leave taxpayers on the hook for any future derivatives bust:


A year ago, Mother Jones reported (http://www.motherjones.com/politics/2013/05/citigroup-hr-992-wall-street-swaps-regulatory-improvement-act) that a House bill that would allow banks like Citigroup to do more high-risk trading with taxpayer-backed money was written almost entirely by Citigroup lobbyists. The bill passed the House in October 2013, but the Senate never voted on it. For months, it was all but dead. Yet on Tuesday night (http://www.nytimes.com/2014/12/10/us/politics/congressional-leaders-reach-deal-on-spending.html?ref=politics), the Citi-written bill resurfaced. Lawmakers snuck the measure into a massive 11th-hour government funding bill (http://rules.house.gov/bill/113/hr-83) that congressional leaders negotiated in the hopes of averting a government shutdown. President Barack Obama is expected to sign the legislation.



"This is outrageous," says Marcus Stanley, the financial policy director at the advocacy group Americans for Financial Reform. "This is to benefit big banks, bottom line."
As I reported (http://www.motherjones.com/politics/2013/05/citigroup-hr-992-wall-street-swaps-regulatory-improvement-act) last year, the bill eviscerates a section of the 2010 Dodd-Frank financial reform act called the "push-out rule":



Banks hate the push-out rule…because this provision will forbid them from trading certain derivatives (which are complicated financial instruments with values derived from underlying variables, such as crop prices or interest rates). Under this rule, banks will have to move these risky trades into separate non-bank affiliates that aren't insured by the Federal Deposit Insurance Corporation (FDIC) and are less likely to receive government bailouts. The bill would smother the push-out rule in its crib by permitting banks to use government-insured deposits to bet on a wider range of these risky derivatives.


The Citi-drafted legislation will benefit five of the largest banks in the country—Citigroup, JPMorgan Chase, Goldman Sachs, Bank of America, and Wells Fargo. These financial institutions control more than 90 percent of the $700 trillion derivatives market. If this measure becomes law, these banks will be able to use FDIC-insured money to bet on nearly anything they want. And if there's another economic downturn, they can count on a taxpayer bailout of their derivatives trading business.http://www.motherjones.com/politics/2014/12/spending-bill-992-derivatives-citigroup-lobbyists

[boutons_deux]

Obama should veto any govt funding bill with this kind of stuff, and give all the details like above as to why.

shut the govt down rather that let the banks use depositors' funds for gambling. perfect example of private gain, public risk.

Lizzy Warren going hard after the Wall St Dems who vote, or support, this shit.

[Winehole23]

there's a good discussion of OTC derivatives here: http://www.businessinsider.com/bubble-derivatives-otc-2010-5

[boutons_deux]

"Under state gaming laws (http://law.findlaw.com/state-laws/gambling/) the speculative use of OTC derivatives, such as naked CDS (http://en.wikipedia.org/wiki/Credit_default_swap#Other_changes_and_debate_on_CD S_in_2009) (similar to naked shorts (http://en.wikipedia.org/wiki/Naked_short_selling#Claimed_effects_of_naked_short ing)) and synthetic CDOs (http://en.wikipedia.org/wiki/Collateralized_debt_obligation#Structures), was illegal in the US until state gaming laws were preempted (http://www.michaelgreenberger.com/files/Feb_3_2009_House_Ag_Hearing_Discussion_Draft_Legis lation.pdf) by the federal government’s Commodity Futures Modernization Act of 2000 (http://www.cftc.gov/ucm/groups/public/@lrrulesandstatutoryauthority/documents/file/ogchr5660.pdf) (CFMA)."

https://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000

annulling the CMFA is essentially impossible due to Repugs blocking EVERYTHING that would protect the public and "harm" Wall st.

[boutons_deux]

"the interconnecting web of OTC derivative contracts can “…lead to chaos or people even questioning the basic system.” "

question? even? :lol

Goldman's Paulson at Treasury, as are all the Treasury/Fed officials, foxes guarding the hen house.

[boutons_deux]

Shutdown deadline looms as opposition to ‘Cromnibus’ spending bill mounts

http://www.rawstory.com/rs/2014/12/shutdown-deadline-looms-as-opposition-to-cromnibus-spending-bill-mounts/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheRawStory+%28The+Raw+Story% 29

[101A]

AS bad as I think Obamacare is; the banks ability to play with the taxpayer's wallets is the single most devastating issue that this country has faced, and, apparently is doomed to face again. Yoni might think the timing of the torture report was designed to distract from Obamacare details; I am more inclined to believe it is a diversion from this.

This is something Tea Partiers would have been opposed to a few years back; why is Rand silent? Props to Warren, but she is so far left, no one is going to listen to her; and will actually galvanize Republicans to assume it must be good if she is opposed. Obama has the pulpit, why is he silent?

We all know why those who ostensibly would be opposed to this are not.

Fucked and unfuckable, right, B?

[101A]

typed the previous while Boutons was posting his story, going to read that now. Edits probably to follow.

[101A]

But the measure barely cleared a procedural hurdle as both liberal Democrats and conservative Republicans urged their colleagues to oppose it.

The article talked about the liberal Dems fighting the good fight; Are the conservative Republicans opposed to the bill for the same reason? It was not mentioned. Bias sucks.

[boutons_deux]

more on cromnibus:

The Spending Bill Includes a Huge Insurance Industry Giveaway Too

You can add insurance industry subsidies to the list of giveaways being shoved into the massive, last-minute government spending bill Congress is trying to vote on to avert a government shutdown. A seven-year extension of the Terrorism Risk Insurance Act (TRIA)—which is essentially a government promise to bail out insurance companies after a major terrorist attack—has become part of this appropriations measure. (http://thehill.com/blogs/floor-action/house/226700-house-passes-tria-extension) The insurance industry and some of its bigger corporate clients claim renewing the 9/11-inspired law is critical to keeping the industry alive. Critics, citing the industry's own risk analysis, say it's pretty much useless.

TRIA, which is set to expire December 31, was approved by Congress after the September 11 attacks. Before then, a major attack was considered such a far-off possibility that terrorism insurance was generally included in commercial policies without added cost. But the attacks were a catastrophe for the industry, costing more than $40 billion in today's dollars—the greatest loss for a non-natural disaster on record. After those payouts, many companies either stopped offering terrorism coverage or made it enormously expensive, according to a Congressional Research Service report (http://digital.library.unt.edu/ark:/67531/metadc284476/) on the subject. In 2002, Congress passed TRIA, which requires insurers to offer terrorism coverage—and promises to bail them out if a future terrorist attack causes losses above a certain threshold. With this law, the government acts as an insurer for the insurers—but it doesn't charge them a dime for the protection.

The TRIA renewal in the spending bill will shift more of the burden of covering losses due to terrorist attacks to the insurance industry relative to the previous law. The threshold for an industry bailout would double, from $100 million in damages to $200 million, and the portion of losses covered by the government would fall from 85 percent to 80 percent. The law does include a provision the government could use to get some of its bailout money back; it would allow the government to tax policyholders, but this is not mandatory.

Critics, including Sen. Elizabeth Warren (D-Mass.), have called (http://nypost.com/2014/02/26/warren-terrorism-risk-insurance-act-program-a-giveaway/) TRIA a giveaway for the industry. Similar programs exist in Europe and Australia, but those programs bill insurance companies in advance for the protection, instead of giving it away for free and then possibly taxing policyholders after the fact.

If the government did charge for TRIA coverage, it could collect about $570 million annually, according to (http://www.cbo.gov/sites/default/files/s2244a.pdf) the Congressional Budget Office.

The Consumer Federation of America, citing the insurance industry's own risk analysis, notes that (http://www.consumerfed.org/news/784) only the owners of "high-risk" terrorist targets— large, commercial buildings in New York City, Washington, DC, San Francisco, and Chicago—and their insurers benefit from TRIA.

Although terrorism insurance rates would increase if TRIA were repealed, the group says, few policyholders would see the difference.
If there were a terrorist attack on one of those large commercial buildings, the industry is probably equipped to handle the loss without a government backstop. In the first half of 2014, American property and casualty insurers (TRIA's main industry beneficiaries) were sitting on a record surplus (http://www.businessinsurance.com/article/20140922/NEWS04/140929984) of $683.1 billion, according to an industry report—enough to cover 15 times the losses endured on September 11.

In a September 8 letter (http://www.aba.com/Advocacy/Grassroots/WINNDocs/Multi-IndustryLettertoHousereTRIA090814.pdf) to Congress, 400 (http://www.out-law.com/en/articles/2014/september/insurers-call-for-swift-renewal-of-us-terrorism-risk-insurance-laws/) companies and trade associations, from AIG to United Airlines and Walt Disney, contended that TRIA maintained "economic stability in the face of ongoing terrorist threats," :lol

and that without it insurance companies would be unable to provide adequate coverage. A few weeks later, the Insurance Information Institute, an industry-funded advocacy group, cited (http://www.iii.org/press-release/syrian-air-strikes-focus-attention-on-us-terrorism-risk-insurance-market-092314) ISIS's promise to attack the United States as a reason for extending the law.

More than 100 companies and trade associations lobbied Congress on TRIA. Looks like it was money well spent.

http://www.motherjones.com/politics/2014/12/spending-bill-includes-huge-insurance-industry-giveaway-too

[ElNono]

I read about this a couple days ago... apparently Rep. Jeb Hensarling (R-Texas) was the one pushing to get rid of the push-out rule.

link: http://www.politico.com/story/2014/12/cromnibus-bill-talks-113406.html

[ElNono]

.

[boutons_deux]

yeah, and TX Barton is pushing to remove ban on exporting US crude. TX Barton is the TX asshole who said USA should APOLOGIZE to BP for going after BP for the BP Gulf blowout.

[Winehole23]

Republicans formed an unlikely alliance with the White House in a late-night scramble to pass a $1.1tn federal budget over the objections of House Democrats, who claim it has been hijacked by Wall Street lobbyists and campaign finance interests.

In dramatic scenes that mirrored the lead-up to the government shutdown of October 2013, White House chief of staff Denis McDonough spent three hours locked in talks with the House Democratic caucus on Thursday night trying to persuade its members to drop their opposition to the so-called “cromnibus” and pleading with them that it was the best deal available.


Eventually, with less than three hours to go until another government shutdown, House speaker John Boehner decide to gamble on receiving sufficient support from Democrats to overcome a rebellion on the right of his own party and called a final vote.
“Thank you and Merry Christmas,” said Boehner as he secured 219 votes, one more than he needed to guarantee passage and including support from 57 Democrats. The 206 no votes were bolstered by 67 Republicans, more than expected, who are angry that their party is not using the budget to challenge president Obama more aggressively on immigration reform.


That battle has been postponed until March when Congress will have to vote again on funding for the Department of Homeland Security, which was deliberately left out of the wider omnibus spending package and only funded through a short-term continuing resolution.


The passage of the omnibus spending bill in the House was followed by a two-day continuing resolution to allow the Senate time to follow suit and all but guarantees that most of the government will remain funded until next September.

http://www.theguardian.com/us-news/2014/dec/12/government-shutdown-averted-as-house-passes-omnibus-spending-bill

[pgardn]

yeah, and TX Barton is pushing to remove ban on exporting US crude. TX Barton is the TX asshole who said USA should APOLOGIZE to BP for going after BP for the BP Gulf blowout.

So what do you think of Charles Schumer? You read NoNo post?

[boutons_deux]

So what do you think of Charles Schumer? You read NoNo post?

Schumer is DINO

[Winehole23]

US Rep. Kevin Yoder(R-KS) was responsible for carrying Citibank drafted language to leave us all on the hook for derivatives trading, should oil derivatives, e.g., cause trader/dealers structurally significant losses.

http://ellenbrown.com/2014/12/19/russian-roulette-taxpayers-could-be-on-the-hook-for-trillions-in-oil-derivatives/

Does anyone recall why Lehman went bust?

[boutons_deux]

Stewart destroys, but Congress whores own words are self-destroying

https://www.youtube.com/watch?v=h0n_vD199bY

[boutons_deux]

for Fox, Repugs, conservatives, blacks are demons to be murdered, Liz, too

Fox host: ‘Without question, Elizabeth Warren is the devil’ and Wall Street will defeat her

http://www.rawstory.com/rs/2014/12/fox-host-without-question-elizabeth-warren-is-the-devil-and-wall-street-will-defeat-her/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheRawStory+%28The+Raw+Story% 29

this demon shit is loved by you dumbfuck Bible humpers.

:lol tea baggers say they HATED the bank bailout (which was a dubya/Paulson Repug program), but they now enable AGAIN casino-addicted bank bailouts by taxpayers.

[boutons_deux]

Lots of screw jobs for the 99% in that bill

Under these new rules, the benefits you've been promised in multi-employer plans can actually be cut if your plan is in jeopardy of failure within 15 years and is less than 80-percent funded. (Retirees age 80 years old and older would be protected from cuts.) This is a huge change from longstanding federal rules that prohibit scaling back pension benefits.

http://www.huffingtonpost.com/terry-savage/some-pension-checks-vulne_b_6330932.html

a "solution"? :lol

[boutons_deux]

Wall Street Salivating Over Further Destruction of Financial Reform


Banks and financial institutions are planning an aggressive push to dismantle parts of the Wall Street reform law when Republicans take control of Congress in January.

Fresh off a victory in the government funding debate that liberals decried as a giveaway to Wall Street, advocates for the financial sector aim to pursue additional changes to Dodd-Frank that they say would lighten burdens created by the 2010 law.

Among the top items on the wish list: easing new requirements on mortgages, loosening restrictions on financial derivatives and overhauling the Consumer Financial Protection Bureau....Another fight on the horizon is the push for “regulatory relief,” as financial institutions and Republicans seek to require agencies to pursue more cost-benefit analysis when writing rules.

....In the face of loud opposition, financial lobbyists say they have a compelling case for revisiting the law. While the economy is improving, they argue the new rules have made it exceedingly difficult to obtain loans, including mortgages.

http://www.motherjones.com/kevin-drum/2014/12/wall-street-salivating-over-further-destruction-financial-reform

[boutons_deux]

the Bankers' Club, aka The Fed, helping killing Dodd-Frank, which the Repugs will finish off totally in 2015.

Fed Delays Volcker Rule, Giving Wall Street Another Holiday Gift

The Federal Reserve on Thursday granted (http://federalreserve.gov/newsevents/press/bcreg/20141218a.htm) banks an extra year to comply with a key provision of the Volcker Rule, a move that gives financial lobbyists more time to kill the new regulation before it goes into effect.

The Volcker Rule is a key element of the 2010 Dodd-Frank financial reform law that bans banks from engaging in proprietary trading -- speculative deals that are designed only to benefit the bank itself, rather than its clients.

Thursday's move by the Fed gives banks an additional year to unwind investments in private equity firms, hedge funds and specialty securities projects. The central bank also said it plans to extend the deadline by another 12 months next year, which would give Wall Street a two-year reprieve through the 2016 presidential election.

The Fed's delay comes less than a week after Congress granted Wall Street a reprieve from another reform that had been mandated by the 2010 Dodd-Frank financial reform law. The measure, known as the swaps push-out rule had eliminated (http://www.huffingtonpost.com/2014/12/04/wall-street-government-shutdown_n_6272776.html) federal subsidies for trading in risky derivatives -- the complex contracts at the heart of the 2008 banking meltdown. Bank watchdogs say the Volcker Rule delay adds insult to injury.

"Swaps pushout was a club," said Marcus Stanley, policy director for Americans for Financial Reform. "This is a stiletto."

Big banks including Goldman Sachs and Morgan Stanley have billions of dollars invested in private equity firms that they would have to sell at a loss based on current prices, according to a Bloomberg report (http://www.bloomberg.com/news/2014-12-05/goldman-may-dodge-private-equity-losses-with-volcker-reprieve.html) from early December.

Dodd-Frank gave banks four years to unwind their investments in speculative enterprises, setting a deadline of July 21, 2014. The Fed had previously extended that deadline by one year, and now plans to push it out to July 2017.

"The Street has had years of notice to unwind these investments, and it appears that their self-serving complaints have been accepted fairly uncritically without a real analysis for the basis of the claim," said Dennis Kelleher, president and CEO of Better Markets, a financial reform advocacy group. "If you can't get out of a trade in seven years, it's probably not the kind of trade you should be doing."

http://www.huffingtonpost.com/2014/12/18/volcker-rule-federal-reserve_n_6351190.html

[boutons_deux]

Why Mitch McConnell Plans To Troll Elizabeth Warren

Sen. Mitch McConnell (R-Ky.), looking forward to a GOP Senate majority, laid out the Republicans' 2015 financial policy platform: trolling Sen. Elizabeth Warren (D-Mass.).

"The [Senate] Banking Committee is certainly going to be taking a look at Dodd-Frank," said McConnell, who is widely expected to be the next Senate majority leader, in a Wednesday press conference. "I've called it frequently 'Obamacare for banks.'"

He continued, "The big guys are doing just fine under Dodd-Frank. The community bankers are struggling. I do think the Banking Committee will want to take a look at how much damage it's done to the little guys who had nothing whatsoever to do with the meltdown in 2008. I'd be surprised that the Banking Committee isn't going to look at it."

In other words, McConnell's big plan for bank policy seems to be calling the 2010 Wall Street reform law names and trying to dirty the public relations waters for bank reform advocates, like Warren, on vaguely populist grounds. Warren, an outspoken member of the Banking Committee, is known for pushing federal regulators to focus on the needs of ordinary Americans.

http://www.huffingtonpost.com/2014/11/06/mitch-mcconnell-elizabeth-warren_n_6117340.html?cps=gravity_2425_78760637774 82034819

[boutons_deux]

govt and corps can violate contracts with consumers, but ever trie to violate a contract with govt or corp?

Cromnibus Pension Provisions Gut 40 Years of Policy, Allow Existing Pensions to Be Slashed


Under the bill, trustees would be enabled to cut pension benefits to current retirees, reversing a 40-year bond with workers who earned their retirement packages.


Michael Hilzick (http://www.latimes.com/business/hiltzik/la-fi-mh-that-awful-congressional-plan-20141209-column.html):

Under ERISA, the 1974 law governing pensions in the private sector, benefits already earned by a worker can’t be cut.


Now they can. That’s right. Even if you’re retired and vested in a private pension plan, your benefits could be cut. Congress retraded the deal (if I have the finance jargon right). That’s nauseating even for today’s official Washington. And the bill was passed in a thoroughly bipartisan fashion (http://www.businessweek.com/articles/2014-12-11/congress-says-it-has-to-cut-pensions-to-save-them): Kline is a Minnesota Republican, and Miller is a “liberal” California Democrat.


The measure would give multiemployer pension trustees the option to cut vested benefits in order to save plans headed toward insolvency and would increase insurance premiums to the financially troubled Pension Benefit Guaranty Corporation (PBGC).

It works like this: Trustees submit an application of proposed benefit suspensions to the Treasury Department. The Treasury Department consults with the Pension Benefit Guaranty Corporation and the Labor Department before approving the application. Following Treasury approval, participants vote on the proposed cuts. If more than 50 percent of participants disapprove, trustees can’t make the cuts. There’s a loophole, however: If the Treasury, the Labor Department and the PBGC determine that the plan would cost the PBGC more than $1 billion [That’s not even real money these days!] upon becoming insolvent, trustees can still implement the cuts.


How many workers will be affected? Michael Hilzick (http://www.latimes.com/business/hiltzik/la-fi-mh-that-awful-congressional-plan-20141209-column.html) again:

[M]ultiemployer pension plans are generally negotiated by a union to cover employees of all companies in a given industry. About 1,400 such plans cover about 10 million workers, according to the Pension Rights Center. About 150 to 200 of the plans, covering 1.5 million workers, are seriously underfunded and could run out of money sometime during the next 20 years.


measure included in Congress’s mammoth spending bill permits benefit cuts for retirees in one type of pension plan, a big shift that lawmakers and others believe could set a precedent for other troubled retirement programs.

Lawmakers and experts, while divided over the merits of the change, largely agreed that it could well be the first of many.


Alicia Munnell (http://www.businessweek.com/articles/2014-12-11/congress-says-it-has-to-cut-pensions-to-save-them), director of Boston College’s Center for Retirement Research says the change:

“is letting the genie out of the bottle. Once it becomes legal to cut accrued benefits, then it’s a different world. It’s really precedent-making change. [While not opposed to giving trustees flexibility, she said] “It needs to be applied very, very judiciously.”



http://truth-out.org/news/item/28139-cromnibus-pension-provisions-gut-forty-years-of-policy-allow-existing-pensions-to-be-slashed

[Winehole23]

Exerts on regulation said that the Dodd Frank provision at issue, known as derivatives push-out, was simply about the big US financial firms keeping their profit margins via continued access to cheap funding. Banks weren’t barred from engaging in this type of business but they’d have to do it in different legal entities. As American Banker explained (http://www.americanbanker.com/news/law-regulation/why-citi-may-soon-regret-its-big-victory-on-capitol-hill-1071636-1.html):



What they won was the repeal of a Dodd-Frank Act provision that requires them to push out a portion of their derivatives business into subsidiaries. Big banks fought against its inclusion in the 2010 financial reform law and have been steadily fighting to repeal it ever since…


Many analysts agreed that repealing the swaps provision, which was Section 716 of Dodd-Frank, is likely to only help banks on the margins, since they are allowed to continue engaging in the activity through affiliates. But by fighting so hard, some saw signs of darker motivations.


“Wall Street’s determined lobbying on Section 716 provides compelling evidence that Wall Street’s business model depends on the ability of large financial conglomerates to keep exploiting the cheap funding provided by their ‘too big to fail’ subsidies,” said Arthur Wilmarth, a professor of law at George Washington University. “Shame on Congress if it allows megabanks to continue to pursue the same business strategy that brought us the financial crisis.”


This interpretation may be too benign. As structured credit expert Tom Adams said via e-mail:



Why are the proponents pushing so hard, with respect to the Dodd-Frank provision on derivatives pushed out of insured banks, to get this done now? Why not just wait until Republicans have control of the House and Senate? Why is Jamie Dimon calling on members now, rather than just waiting? The timing is weird.


Perhaps there are political reasons that give various parties cover they want and that’s all there is to it.


On the other hand, I’ve been closely watching the blow up in the oil and energy markets and I wonder if there may be a link to the Cromnibus fight.


Much of the recent energy boom has been financed with junk debt and a good portion of that junk debt ended up in collateralized loan obligations. CLOs are also big users of credit default swaps, which was an important target of the Dodd Frank push-out. In addition, over the past 6 months banks were unable to unload a portion of the junk debt originated and so it remained on bank balance sheets (http://www.ft.com/intl/cms/s/0/c9f4e9e8-757c-11e4-b1bf-00144feabdc0.html). That debt is now substantially underwater. To hedge, banks are using CDS. Hedge funds are actively shorting these junk debt financed energy companies using CDS (it’s unclear where the long side of those CDS have ended up – probably bank balance sheets and CLOs).


Finally, junk financed energy companies have been trying to offset the falling price of oil by hedging via energy derivatives. As it turns out, energy derivatives are also part of the DF push-out battle.


Conditions in the junk and energy markets are pretty dire right now as a result of the collapse in oil, as you know. I suspect there are some very anxious bank executives looking at their balance sheets right now.


Since the derivatives push-out rule of Dodd Frank was scheduled to go into affect in 2015, the potential change in managing their exposure may be causing a lot of volatility for banks now – they need to hedge in large numbers at the best rates possible. Is it possible that bank concerns (especially Citi and JP Morgan) about the potential energy-related losses are why Dodd Frank has to be changed now?

http://www.nakedcapitalism.com/2014/12/did-wall-street-need-to-win-the-derivatives-budget-fight-to-hedge-against-oil-plunge.html

[Winehole23]

CLOs or collateralized loan obligations, are used to sell highly leveraged loans, which are typically created when private equity firms take companies private. In the last big takeover boom of 2006-2007, which was again led by private equity buyouts, banks were left with tons of unsold CLO inventory on their balance sheets. The games banks played to underreport losses (such as doing itty bitty trades with each other or friendly hedge funds to justify their valuations) and the magnitude of the damage didn’t get the attention they warranted because all eyes were on the bigger subprime/CDO implosion.

This CLO decay could eventually be to be more serious than the losses after the 2006-7 buyout boom. This time, the lending was less diversified by industry. Although it hard to get good data, by all account shale gas companies have been heavy junk bond issuers, and energy-related investments have also been disproportionately represented in recent acquisitions. The high representation of energy bonds in junk issuance means they are also the largest single industry exposure in junk bond ETFs, which were wobbly even before oil started taking its one-way wild ride. Here is one stab at estimating the concentration . From ETF.com (http://www.etf.com/sections/blog/24011-junk-bond-etfs-hit-by-cheap-oil.html):



Energy companies have traditionally been big users of the debt markets, and while of course huge diversified companies don’t often end up in the junk bond funds, plenty of smaller, more speculative companies do….
So how does this impact junk bond ETFs? The iShares iBoxx $ High Yield Corporate Bond ETF, for instance, has roughly a 15 percent exposure to energy. Our Analyst Pick SPDR Barclays High Yield Bond ETF has more than 17 percent in energy. And since both ETFs follow indexes that eventually try and mirror the market for available debt, their exposure to energy is likely to increase, as this year was the largest in a long time for energy junk-bond issuance. Some analysts have it as high as 19 percent of all new paper that’s hit the street in 2014.


Note that the ETF concern isn’t necessarily related to derivatives exposures except to the extent that ETFs use derivatives to manage liquidity (and that creates the notorious basis risk, that the derivatives trades are at prices that don’t mesh tidily with cash market trades). Bond market ETF risk is already an official worry; the SEC’s chairman Mary Jo White flagged it as a concern for the corporate bond ETFs. (http://www.nasdaq.com/article/sec-chief-calls-for-stress-testing-of-mutual-funds-other-asset-managers--update-20141211-00762)

same

[boutons_deux]

In retrospect, we can see the argument of "we need financial innovation" for deregulation in the later 90s and up to the present was really a LIE behind which there has been nothing but financial/banking fraud, theft, crises, gambling with depositors' money, destructive free-flow of capital across borders, world-wide financial system fragility. ALL to the benefit of FIRE sectors.

eg, Dick Fuld slithered away an extremely wealthy man.

[boutons_deux]

good laugh:

Repugs want to kill ExIm bank because it's "corporate welfare" :lol but they won't touch the $100Bs of corporate welfare in the DoD budget because their voters' jobs depend on MIC jobs.

[boutons_deux]

Boeing to lay off workers in El Segundo satellite division

Aerospace giant Boeing Co. said Tuesday that it plans to lay off as many as several hundred employees at its Southern California-based satellite division.


Boeing said the cuts were needed after a customer could not get financing through the Export-Import Bank and canceled an order for a pricey satellite

http://www.latimes.com/business/la-fi-boeing-layoffs-20150826-story.html

Repugs, job creators! :lol

[boutons_deux]

The Repug "job creators" doing God's work destroying (good) jobs

Ex-Im Bank Dispute Threatens G.E. Factory That Obama Praised

When President Obama visited (http://www.nytimes.com/2014/02/04/us/politics/obama-moves-to-the-right-in-a-partisan-war-of-words.html) General Electric (http://topics.nytimes.com/top/news/business/companies/general_electric_company/index.html?inline=nyt-org)’s sprawling, red brick engine factory here in January 2014, he praised it as a sign that manufacturing in America could have a promising future. “We’re here because you’re doing some really good stuff,” Mr. Obama said. Plants like this, he declared, “can be a model for the country.”

On the morning of Sept. 28, the Waukesha plant manager gathered the workers on the floor and told them the factory would be shut down. G.E., he said, had decided to shift production of the industrial engines — and the workers’ jobs — to Canada.

What happened in less than two years to change things so much? The answer is a blend of Washington politics, fast-changing markets and corporate self-interest. At the center is a politically charged dispute over a usually obscure agency, the Export-Import Bank.

(http://www.nytimes.com/2015/10/26/business/ex-im-bank-dispute-threatens-ge-factory-that-obama-praised.html?partner=rss&emc=rss#story-continues-3)
That dispute reaches a turning point on Monday, when supporters from both parties of the now shuttered federal agency (http://www.nytimes.com/2015/07/30/business/outlook-for-the-ex-im-bank-dims-as-congress-departs.html) will force a vote in the House of Representatives to reopen it — the culmination of a monthslong revolt against some of the most powerful Republicans in Congress, who want the bank dead.

The Waukesha factory workers feel that their jobs are being lost to forces beyond their control. “We’re the hostages in this fight,” said Scott Schmidt, 43, a machinist and 20-year employee.

When the workers assembled last month, they were told the Waukesha factory was being shut down because Congress had failed to fund the Export-Import Bank, which plays a small but often crucial role in America’s export trade.

Conservative Republicans have singled out the bank as a symbol of “corporate welfare,” saying it hands out generous subsidies, especially to big companies like G.E. This year, House Republicans blocked a vote to renew funding for the bank.

http://www.nytimes.com/2015/10/26/business/ex-im-bank-dispute-threatens-ge-factory-that-obama-praised.html?partner=rss&emc=rss

Repugs' blind ideology always good for serious damage to Americans and America.

[Winehole23]

Kevin Yoder shoehorns the provision into this years CRomnibus bill:


The Dodd-Frank provision in question — the so-called swaps pushout rule — has been controversial since it was first put forward by former Senate Agriculture Committee Chairman Blanche Lincoln (D-Ark.) and big banks for years have worked to get rid of it or to at least water down its impact.


The pushout rule bans banks from making certain risky derivatives trades in units backstopped by a government guarantee and requires them to move those parts of their operation to separate affiliates.


The banking industry for years has railed against this section of the law as impractical and ill-conceived, but advocates of tougher regulation say it is a necessary check on Wall Street banks’ penchant for taking big risks in the parts of their operations that enjoy government backstops, such as deposit insurance.


Read more: http://www.politico.com/story/2014/12/wall-street-spending-bill-congress-113525#ixzz3uUzyD0oK

[Winehole23]

Yoder says the language, drafted by Citibank lobbyists, is intended to benefit farmers and community banks.

[boutons_deux]

yawn, BigCorp, BigFinance own and operate the govt for self-enrichment, while screwing Americans.

[boutons_deux]

Yoder says the language, drafted by Citibank lobbyists, is intended to benefit farmers and community banks.

:lol

[boutons_deux]

derivatives? When a bank is in trouble, derivatives have super-priority over deposits, aka, bank stealing your deposits to cover their derivatives losses, aka, "bail in"

A Crisis Worse than ISIS? Bail-Ins Begin (http://ellenbrown.com/2015/12/29/a-crisis-worse-than-isis-bail-ins-begin/)

At the end of November, an Italian pensioner hanged himself (http://www.thelocal.it/20151211/italy-moves-to-bail-out-savers-hit-by-bank-plan) after his entire €100,000 savings were confiscated in a bank “rescue” scheme. He left a suicide note blaming the bank, where he had been a customer for 50 years and had invested in bank-issued bonds. But he might better have blamed the EU and the G20’s Financial Stability Board, which have imposed an “Orderly Resolution” regime that keeps insolvent banks afloat by confiscating the savings of investors and depositors. Some 130,000 shareholders and junior bond holders suffered losses in the “rescue.”

The pensioner’s bank was one of four small regional banks that had been put under special administration over the past two years. The €3.6 billion ($3.83 billion) rescue plan launched by the Italian government uses a newly-formed National Resolution Fund, which is fed by the country’s healthy banks. But before the fund can be tapped, losses must be imposed on investors; and in January, EU rules will require that they alsobe imposed on depositors. According to a December 10th article on BBC.com (http://www.bbc.com/news/world-europe-35062239):

The rescue was a “bail-in” – meaning bondholders suffered losses – unlike the hugely unpopular bank bailouts during the 2008 financial crisis, which cost ordinary EU taxpayers tens of billions of euros.

Correspondents say Renzi acted quickly because in January, the EU is tightening the rules on bank rescues – they will force losses on depositors holding more than €100,000, as well as bank shareholders and bondholders.
. . . [L]etting the four banks fail under those new EU rules next year would have meant “sacrificing the money of one million savers and the jobs of nearly 6,000 people”.


That is what is predicted for 2016:massive sacrifice of savings and jobs to prop up a “systemically risky” global banking scheme.


Bail-in Under Dodd-Frank

That is all happening in the EU. Is therereason for concern in the US?

According to former hedge fund manager Shah Gilani, writing for [I]Money Morning, there is. In a November 30th article titled “Why I’m Closing My Bank Accounts While I Still Can (http://moneymorning.com/2015/11/30/why-im-closing-my-bank-accounts-while-i-still-can/),” he writes:

entirely possible in the next banking crisis that depositors in giant too-big-to-fail failing banks could have their money confiscated and turned into equity shares. . . .
If your too-big-to-fail (TBTF) bank is failing because they can’t pay off derivative bets they made, and the government refuses to bail them out, under a mandate titled “Adequacy of Loss-Absorbing Capacity of Global Systemically Important Banks in Resolution,” approved on Nov. 16, 2014, by the G20’s Financial Stability Board, they can take your deposited money and turn it into shares of equity capital to try and keep your TBTF bank from failing.


Once your money is deposited in the bank, it legally becomes the property of the bank. Gilani explains:

Your deposited cash is an unsecured debt obligation of your bank. It owes you that money back.

If you bank with one of the country’s biggest banks, who collectively have trillions of dollars of derivatives they hold “off balance sheet” (meaning those debts aren’t recorded on banks’ GAAP balance sheets), those debt bets have a superior legal standing to your deposits and get paid back before you get any of your cash.

. . . Big banks got that language inserted into the 2010 Dodd-Frank law meant to rein in dangerous bank behavior.


The banks inserted the language and the legislators signed it, without necessarily understanding it or even reading it. At over 2,300 pages and still growing, theDodd Frank Act is currently the longest and most complicated bill ever passed by the US legislature.


Propping Up the Derivatives Scheme

Dodd-Frank states in its preamble that it will “protect the American taxpayer by ending bailouts.” But it does this under Title II by imposing the losses of insolvent financial companies on their common and preferred stockholders,debtholders, and other unsecured creditors. That includes depositors, the largest class of unsecured creditor of any bank.

Title II is aimed at “ensuring that payout to claimants (http://www.larouchepub.com/other/2013/4022dodd_frank_us_bailin.html) is at least as much as the claimants would have received under bankruptcy liquidation.” But here’s the catch: under both the Dodd Frank Act and the 2005 Bankruptcy Act, [I]derivative claims have super-priority over all other claims (http://www.thedeal.com/thedealeconomy/the-case-against-favored-treatment-of-derivatives.php), secured and unsecured, insured and uninsured.

The over-the-counter (OTC) derivative market (http://www.fimarkets.com/pagesen/OTC_derivatives_CCP.php) (the largest market for derivatives) is made up of banks and other highly sophisticated players such as hedge funds. OTC derivatives are the bets of these financial players against each other. Derivative claims are considered “secured” because collateral is posted by the parties.

For some inexplicable reason, the hard-earned money you deposit in the bank is not considered “security” or “collateral.” It is just a loan to the bank, and you must stand in line along with the other creditors in hopes of getting it back. State and local governments must also stand inline, although their deposits are considered “secured,” since they remain junior to the derivative claims with “super-priority.”


Turning Bankruptcy on Its Head

Under the old liquidation rules, an insolvent bank was actually “liquidated” – its assets were sold off to repay depositors and creditors. Under an “orderly resolution,” the accounts of depositors and creditors are emptied to keep the insolvent bank in business. The point of an “orderly resolution” is not to make depositors and creditors whole but to prevent another system-wide “disorderly resolution” of the sort that followed the collapse of Lehman Brothers in 2008. The concern is that pulling a few of the dominoes from the fragile edifice that is our derivatives-laden global banking system will collapse the entire scheme. The sufferings of depositors and investors are just the sacrifices to be borne to maintain this highly lucrative edifice.

In a May 2013 article in Forbes titled “The Cyprus Bank ‘Bail-In’ Is Another Crony Bankster Scam (http://www.forbes.com/sites/nathanlewis/2013/05/03/the-cyprus-bank-bail-in-is-another-crony-bankster-scam/),” Nathan Lewis explained the scheme like this:

At first glance, the “bail-in” resembles the normal capitalist process of liabilities restructuring that should occur when a bank becomes insolvent. . . .

The difference with the “bail-in” is that the order of creditor seniority is changed. In the end, it amounts to the cronies (other banks and government) and non-cronies. The cronies get 100% or more; the non-cronies, including non-interest-bearing depositors who should be super-senior, get a kick in the guts instead. . . .

In principle, depositors are the most senior creditors in a bank. However, that was changed in the 2005 bankruptcy law, which made derivatives liabilities most senior.

Considering the extreme levels of derivatives liabilities that many large banks have, and the opportunity to stuff any bank with derivatives liabilities in the last moment, other creditors could easily find there is nothing left for them at all.


As of September 2014, US derivatives had a notional value of nearly $280 trillion (http://dealbook.nytimes.com/2014/09/03/regulators-propose-rule-to-reduce-risk-of-derivatives/?_php=true&_type=blogs&_r=1). A study involving the cost to taxpayers of the Dodd-Frank rollback slipped by Citibank into the “cromnibus” spending bill last December found that the rule reversal allowed banks to keep $10 trillion (http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=15097) in swaps trades on their books. This is money that taxpayers could be on the hook for in another bailout; and

since Dodd-Frank replaces bailouts with bail-ins, it is money that creditors and depositors could now be on the hook for.

Citibank is particularly vulnerable (http://www.zerohedge.com/news/2015-01-05/citi-next-aig-70-trillion-reasons-why-citigroup-and-congress-scrambled-pass-swaps-pu) to swaps on the price of oil. Brent crude dropped (http://www.tradingeconomics.com/commodity/brent-crude-oil) from a high of $114 per barrel in June 2014 to a low of $36 in December 2015.
http://ellenbrown.com/2015/12/29/a-crisis-worse-than-isis-bail-ins-begin/

[Winehole23]

this study casts doubt on capital requirements and stresses the desirability of regulating credit allocation, like we did before 1999:

http://www.sciencedirect.com/science/article/pii/S1057521915001477

[Winehole23]

According to the OCC, as of December 31, 2015 there were $237 trillion in notional derivatives (face amount) at the 25 largest bank holding companies with the bulk of that amount on the books of the insured banks. That compares with $169 trillion on the books of the 25 largest bank holding companies at December 31, 2007, just prior to the implosions on Wall Street. This means there has been an explosive 40 percent increase in eight years when the Obama administration was supposed to be reining in risk on Wall Street.http://wallstreetonparade.com/2016/04/why-the-vampire-squid-wants-small-depositors-money-in-1-frightening-chart/

[Winehole23]

Students of Wall Street history may also recall that Goldman’s hubris leading up to the crash of 1929 played a role in why the Glass-Steagall Act of 1933 banned casino-like investment banks from getting near insured deposits. Prior to the ’29 crash, Goldman ran the Goldman Sachs Trading Company, a closed end fund (called a trust in those days). Goldman Sachs also offered that deal to the little guy at $104 a share. The fund appeared to investigators as a dumping ground for Goldman while also paying it a hefty management fee. The little guy who bought the shares at $104 a share at the top of the bull market was left with about a buck and change after the ’29 crash.


So why this generous move now by Goldman Sachs Bank USA to offer above average returns to the little guy? It likely has a lot to do with the chart below from the Office of the Comptroller of the Currency’s (OCC) December 31, 2015 report (http://www.occ.gov/topics/capital-markets/financial-markets/trading/derivatives/dq415.pdf) on the four largest banks based on derivatives exposure. According to the report, the credit exposure from derivatives versus the bank’s risk-based capital is as follows: JPMorgan Chase 209 percent; Bank of America 85 percent; Citibank 166 percent and Goldman Sachs (wait for it) – a whopping 516 percent.

same

[Winehole23]

derivatives exposure, Fannie and Freddie edition: http://wallstreetonparade.com/2016/04/u-s-government-is-now-a-major-counterparty-to-wall-street-derivatives/

[Winehole23]

this study casts doubt on capital requirements and stresses the desirability of regulating credit allocation, like we did before 1999:

http://www.sciencedirect.com/science/article/pii/S1057521915001477Clinton era financial innovation? Nobody?

[boutons_deux]

Clinton era financial innovation? Nobody?

Rubin and accomplices suckered the finance-naive but neoliberal Clinton to sign it (he was badly weakened by Repug witch hunting, slander) and the Repugs wrote Gramm–Leach–Bliley Act.

Neoliberal, Wall St tool/shill Hillary and any Repug candidate will continue to let BigFinance run the economy, gamble with taxpayers $Ts, and expose taxpayers to further bailouts. and bailins (stealing depositors' money when the bank fails) are international and US law.

Anybody have ANY evidence why America is not fucked and not unfuckable? :lol

May all the Repugs who are right now voting against funding Zika vaccine research "on psychopathic principle" be bitten by Zika mozzies.

[Winehole23]

are you an Aussie, boutons?

[Winehole23]

Seven banks settle rate-rigging lawsuit:



Seven of the world's biggest banks have agreed to pay $324 million to settle a private U.S. lawsuit accusing them of rigging an interest rate benchmark used in the $553 trillion derivatives market.
The settlement made public on Tuesday, which requires court approval, resolves antitrust claims against Bank of America Corp (BAC.N (http://www.reuters.com/finance/stocks/overview?symbol=BAC.N)), Barclays Plc (BARC.L (http://www.reuters.com/finance/stocks/overview?symbol=BARC.L)), Citigroup Inc (C.N (http://www.reuters.com/finance/stocks/overview?symbol=C.N)), Credit Suisse Group AG (CSGN.S (http://www.reuters.com/finance/stocks/overview?symbol=CSGN.S)), Deutsche Bank AG (DBKGn.DE (http://www.reuters.com/finance/stocks/overview?symbol=DBKGn.DE)), JPMorgan Chase & Co (JPM.N (http://www.reuters.com/finance/stocks/overview?symbol=JPM.N)) and Royal Bank of Scotland Group Plc (RBS.L (http://www.reuters.com/finance/stocks/overview?symbol=RBS.L)).


Several pension funds and municipalities accused 14 banks, including those that settled, of conspiring to rig the "ISDAfix" benchmark for their own gain from at least 2009 to 2012.

http://www.reuters.com/article/us-banks-rigging-settlement-idUSKCN0XU2B5

[boutons_deux]

My assumption: ENTIRE BigFinance sector is a corrupt, wealth-sucking criminal enterprise.

"$553 trillion" :lol TOTAL FICTION

[Winehole23]

aren't you interested in how, when and to whom the crimes transpire? the six-and seven-figure settlements have been frequent in the last few years, usually involving the same six or seven firms.

[boutons_deux]

aren't you interested in how, when and to whom the crimes transpire? the six-and seven-figure settlements have been frequent in the last few years, usually involving the same six or seven firms.

M E G O

Entire BigFinance, like IRS regs, is so intentionally complicated and opaque that it's super hard to really understand what's going on, unless you're a full-time finance, legal, or accounting academic or professional.

And of course, these hand slap settlements, financed by taxpayers as tax deductible are, I confidently assume, for but a tiny fraction of the totality of financial crimes.

[Winehole23]

your theory of criminality does not disclose the relevant details of the case, only the legal result.

you overrate your bias, in my estimation.

[boutons_deux]

your theory of criminality does not disclose the relevant details of the case, only the legal result.

you overrate your bias, in my estimation.

I said the "details" are intentionally, opaquely unknowable, is why even a feckless SEC won't go after Wall St the criminal "details" are (supposedly) so hard to prove, to pin on individuals.

And BigFinance OWNS Congress, so corrective legislation will not be forthcoming. Any such legislation would anyway be castrated by BigFinance lobbyists at the rule making stage, eg, CFPB.

[Winehole23]

the tendency is oligarchy. you presume it's a foregone conclusion.

as usual, you exaggerate. reality is much more complicated than your two tone imagination.

[boutons_deux]

the tendency is oligarchy. you presume it's a foregone conclusion.

as usual, you exaggerate. reality is much more complicated than your two tone imagination.

oligarchy is what America is now.

see the Princeton study that shows Congress votes reflect the preferences of their donors, and with almost no alignment with voters preferences.

USA "light" has gone out, has regressed to the historical mean for all countries: a wealth, powerful, corrupt autocratic oligarchy running and looting the country, while viciously oppressing the citizens.

[Winehole23]

IMF sounds the alarms on CLO's:


The International Monetary Fund has decided its time to sound the alarm about leveraged loans (https://blogs.imf.org/2018/11/15/sounding-the-alarm-on-leveraged-lending/?utm_medium=email&utm_source=govdelivery). It’s a $1.3 trillion global market comprised of debt built up by companies in precarious financial positions.


The IMF expects global issuance of these loans (https://qz.com/220913/what-the-heck-are-leveraged-loans/) to companies that are either heavily indebted already or have weak credit ratings to be around $750 billion this year, after a record $788 billion in 2017. Ten years after the global financial crisis, investors are once again showing increasingly risky behavior (https://qz.com/1383412/ten-years-after-lehmans-collapse-these-are-the-risks-in-the-financial-system-now/) as they search for sources of high yield in response to a decade of low interest rates (enacted by central banks in response to the crisis).
https://qz.com/1465460/the-risky-leveraged-loan-market-is-scaring-the-imf-janet-yellen-and-others/

[Winehole23]

non-bank new issuance is largely "covenant-lite" CLOs:


The IMF added that “the most highly indebted speculative grade firms” make up more of the new issuance of leveraged loans than they did before the financial crisis. Meanwhile, there are fewer investor protections—known as covenants—in new loans. These “covenant-lite” loans make up 80% of new loans arranged for nonbank lenders, up from about 30% in 2007. To make matters even worse, the quality of covenants has deteriorated, the IMF added.

[Winehole23]

Janet Yellen add her voice to the chorus:


“You are supposed to realize from the crisis, it is not just a question of what banks do that imperils themselves, it is what they do that can create risks to the entire financial system,” Yellen said last month in an interview with the Financial Times (https://www.ft.com/content/04352e76-d792-11e8-a854-33d6f82e62f8)(paywall). ”That lesson to me seems to have been lost.”

[Winehole23]

https://blogs.imf.org/wp-content/uploads/2018/11/eng-nov-9-globalleverage1-1.png

https://blogs.imf.org/2018/11/15/sounding-the-alarm-on-leveraged-lending/

[Winehole23]

BofE warns as well:


The £31bn total of so-called "leveraged loans" to highly indebted businesses compares with £10bn of standard lending by UK banks to this type of company.


UK banks are unwilling to make this kind of loan due to the risks involved.


The leveraged loans are then "typically sold to non-bank investors, whose ability to sustain losses without materially impacting financing conditions is uncertain", the bank said.
The FPC said there had been similar increases across Europe and in the US, showing an increased appetite among investors to take risks.


The lending, which is mainly done by investment banks, will be reviewed to see if it poses any risk to financial stability and the ability of companies to service their other debts.
https://www.bbc.com/news/business-45797963

[Winehole23]

Fund managers highlight corporate indebtedness:


While managers may believe in prospects for company profits, they were worried about the amount of debt that businesses have taken on. A record 42% of investors said companies are over-levered, far exceeding the 32% peak in 2008.

The number of managers who believe corporate balance sheets (https://citywire.co.uk/funds-insider/news/big-equity-funds-fall-short-on-benchmark-data/a1125595?section=funds-insider&linkSource=article-body) are overleveraged in general is also at an all-time high of 34%.
https://citywire.co.uk/funds-insider/news/fund-managers-warm-to-us-but-worry-about-debt/a1128570

[boutons_deux]

The only power that can regulate / stabilize / stop BigFinance/predatory Capitalism is BigGovt, for which the oligarchy has had a 45-year SUCCESSFUL strategy of been corrupting, "capturing", weakening.

There is ALWAYS another disastrous financial crisis/depression, with the oligarchy coming out on top, and everybody else way down on the bottom.

[Winehole23]

The only power that can regulate / stabilize / stop BigFinance/predatory Capitalism is BigGovt...never you worry, Sen. Warren has written the Treasury Department and relevant regulatory agencies a sternly worded letter.

https://www.warren.senate.gov/imo/media/doc/2018.11.14%20Letter%20to%20Regulators%20on%20Lever aged%20Lending.pdf

[Winehole23]

Far from being directed into productive investment – the stated rationale for the past decade of low interest rates — the IMF instead notes that more than half the total of leveraged loans issued this year has been used to finance mergers & acquisitions activity, leveraged buyouts (LBOs), or share buybacks...and pay dividends.https://www.nakedcapitalism.com/2018/11/imf-warren-sound-alarm-leveraged-lending.html

[Winehole23]

https://www.nakedcapitalism.com/wp-content/uploads/2018/11/eng-nov-9-globalleverage2-1-e1542535436242.png

[Winehole23]

https://www.nakedcapitalism.com/wp-content/uploads/2018/11/eng-nov-9-globalleverage3-1-e1542536098452.png

[Winehole23]

https://www.nakedcapitalism.com/wp-content/uploads/2018/11/eng-nov-9-globalleverage4-e1542536640406.png

[Winehole23]

half of all leveraged loans issued in the United States are purchased by collateralized loan obligations (CLOs), which bundle them and then resell them to other investors.


https://www.nakedcapitalism.com/wp-content/uploads/2018/11/eng-nov-9-globalleverage5-e1542537780651.png

[Winehole23]

The IMF notes, “Institutional ownership makes it harder for banking regulators to address potential risk to the financial system if things go wrong.”

[boutons_deux]

never you worry, Sen. Warren has written the Treasury Department and relevant regulatory agencies a sternly worded letter.

https://www.warren.senate.gov/imo/media/doc/2018.11.14%20Letter%20to%20Regulators%20on%20Lever aged%20Lending.pdf

We would need 60+ Warrens and 230 progressives in the House to even admit how BigFinance is a disaster for the non-oligarchy.

Aint EVER gonna happen

non-oligarchy America will be fucked, sooner or later, by Capitalists/BigFinance. Always has, always will be.

[Winehole23]

non-oligarchy America will be fucked, sooner or later, by Capitalists/BigFinance. Always has, always will be.no doubt, but how we respond makes a difference.

there's a world of difference between FDR and Barack Obama.

[boutons_deux]

no doubt, but how we respond makes a difference.

there's a world of difference between FDR and Barack Obama.

come on, the only power big enough to respond is Fed govt, and the oligarchy controls it totally, and its Repug whores continue to kill (financial) regs, with Dem support, and defund govt, esp enforcement, into dysfunctionality, eg, IRS going after tax evaders, closing loopholes written directly by Capitalists.

Look at how the "independent" captured Fed, and Obama's Treasury, bailed out Wall St / BigFinance in the Banksters Very Own Great Depression but did essentially nothing for the non-oligarchy, aka, Main Street.

[Winehole23]

come on, the only power big enough to respond is Fed govt, and the oligarchy controls it totally, and its Repug whores continue to kill (financial) regs, with Dem support, and defund govt, esp enforcement, into dysfunctionality, eg, IRS going after tax evaders, closing loopholes written directly by Capitalists.

Look at how the "independent" captured Fed, and Obama's Treasury, bailed out Wall St / BigFinance in the Banksters Very Own Great Depression but did essentially nothing for the non-oligarchy, aka, Main Street.regulatory capture is undeniably relevant and I agree that government is the only power sufficient to countervail predatory financial interests.

isn't that the way it worked in the New Deal?

[boutons_deux]

regulatory capture is undeniably relevant and I agree that government is the only power sufficient to countervail predatory financial interests.

isn't that the way it worked in the New Deal?

2000s aren't the 1930s.

"The American people were generally extremely dissatisfied with the

crumbling economy,

mass unemployment,

declining wages and

profits

Roosevelt entered office with enormous political capital (https://en.wikipedia.org/wiki/Political_capital).

Americans of all political persuasions were demanding immediate action"

https://en.wikipedia.org/wiki/New_Deal

We now have a totally different country, different economy, and communication / information technology.

So 21st New Deal ain't gonna happen.

America is fucked and unfuckable, as is the planet's environment ( A G W ).

Note that the oligarchy HATES FDR and the social progress of the 1950s - 60s, and has the power to undo all of it.

To repeat, the oligarchy / Repugs have realized that there is no power that can stop them, no power will punish them, while they have to power to stop all progress, ratcheting America of the non-oligarchy deeper into shit.

[Winehole23]

actually, you don't know what's going to happen.

nobody does.