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It's not a good idea to post anything in full for copyright reasons.
Take a snippet or two and link.
It's not a good idea to post anything in full for copyright reasons.
Take a snippet or two and link.
Mostly I agree with this. The one thing that I think is good is the new agency, which in the post that ElNono put up, got some good reviews. Let's face it, guys, as much as Boutons is just a tad 'over-the-top' with most of his railing about how corps own the government, this is one example of regulation that was long overdue admittedly being watered down by the lobbyists, but still being worth the effort to do.
I like Judd Gregg and respect his opinions, but I take his opinions on this particular bill to be as much motivated by November elections as the bill itself is motivated by the same elections.
I like the Lincoln amendment and the derivatives requirement, although I agree with Judd Gregg that the derivative thing doesn't go far enough.
Of course, I would like to see derivatives banned. There is no need for them, and they are a perversion of asset trading, in my opinion.
the bill is progress, but the financial sector bought enough legislators to escape the really serious stuff
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Big Banks Escape Toughest Limits in New Regulation Bill
Saturday 26 June 2010
by: Kevin G. Hall and David Lightman | McClatchy Newspapers | Report
Washington - Like a hard-fought draw in a World Cup soccer match, consumers won sweeping new protections under a revamp of financial regulation that lawmakers agreed to Friday but large banks dodged the biggest hits that had been coming their way.
The sweeping regulatory revamp affects everything from credit cards and mortgages to the structure of large global banks and who regulates the financial sector and how.
Lawmakers, narrowing the differences between legislation from the House of Representatives and the Senate, agreed to establish a Bureau of Consumer Financial Protection to address the shoddy lending and ineffective regulation that helped bring about the nation's financial crisis.
Congressional negotiators also rejected attempts to weaken the new bureau, retaining an independent source of funding and an independent director rather than a board of directors.
When the full House and Senate take up the entire bill next week, however, they'll vote on a package that won't hit big banks nearly as hard as Congress first contemplated.
Banks won't have to prepay billions of dollars into a fund to cover the cost of breaking up large failing financial ins utions, as both the House and Senate first proposed. Banks also escaped a limitation on their size, and there's no explicit prohibition of government rescues if their failures pose major risks to the economy.
In addition, they'll have to wall off their trading in the lucrative, complex instruments called derivatives in separate related companies. The lack of transparency surrounding derivatives amplified the financial crisis.
In a compromise brokered by the Treasury Department, banks were able to keep their trading desks for common — and generally less-risky — types of derivatives, such as bets on swings in interest rates and on the U.S. dollar's value against other currencies. This move won over the New Democrat Coalition, 69 moderates in the House.
The compromise "combines tough new rules and oversight that reduce systemic risk on Wall Street with provisions that allow American manufacturers and lenders to reduce their own risk," Reps. Joseph Crowley, D-N.Y., and Melissa Bean, D-Ill., said in a statement to McClatchy.
The softening was a sigh of relief for Wall Street, but slapping high fives was unlikely because banks lost the right to conduct trading operations if they also trade on behalf of clients.
The legislation builds a wall between commercial banking and investment activities that was in place for almost seven decades before Congress took it down in 1999. Less than a decade later, Wall Street's runaway risk-taking brought the global economy to near-collapse in the fall of 2008. Friday's compromise requires deposit-taking banks to divest their proprietary trading operations over time.
"If implemented effectively,
"This law will send a clear warning: No longer will we allow recklessness on Wall Street to cause joblessness on Main Street," said House Speaker Nancy Pelosi, D-Calif.
Former investment banker Douglas Elliott, who's now an analyst for the Brookings Ins ution, a center-left policy-research center in Washington, agreed that the bill accomplishes much.
"There are maybe 15 major things in this bill, and if we only talk about two or three, we're missing the big picture, and the things work together," he said.
Throughout the two-week negotiations, efforts were made to ensure that there'd be 60 votes in favor of it in the Senate, to prevent a filibuster next week. That meant ceding to some demands from moderate Republicans and liberal Democrats.
When President Barack Obama was asked Friday whether the votes were there for final passage next week, he quipped: "You bet."
Yet there were doubts Friday, too.
"It's really hard to make the case this bill does all that's needed to do," said Sen. Byron Dorgan, D-N.D., the chairman of the Senate Democratic Policy Committee. "It doesn't really deal with 'too big to fail.' It doesn't necessarily stop speculative wagering."
Dorgan didn't say Friday how he'd vote.
"Is it better than nothing? It does set up new regulatory approaches," he said. "But we had a chance to do much, much more."
The legislation gives the Federal Reserve and a new council of regulators the power to tell large and globally interconnected financial firms to get smaller through spinoffs because their size threatens the broader financial system.
It also creates a process for dissolving large ins utions whose failure threatens other big firms. The lack of these powers led the government into unpopular bailout programs to prevent a domino-like collapse of the global financial system.
Those bailouts still anger voters, and that complicates the sales pitch for Democrats, especially because the legislation is complex.
"Go down to Paulding County, Georgia, or take the first exit off Interstate 95 in Florida, and ask people what they think about financial regulation," said Brad Coker, the managing director of Mason-Dixon Polling & Research, which polls nationwide. "How many people anywhere know what a derivative trade is? These are very nerdy kinds of issues."
Rep. Chris Van Hollen, D-Md., the head of the Democratic House campaign committee, was confident that voters will see the benefits.
"You will soon have within the Fed an agency whose sole job is to make sure consumers are not cheated or unfairly taken advantage of by credit card companies, lenders and banks on mortgages and other credit. That is the one thing that has a direct impact on consumers on a day-to-day basis," he said.
How well the legislation works to forestall financial crises will depend on whether other developed nations follow suit.
"We need to act in concert," Obama said Friday at the White House.
Not all the changes in the compromise legislation will happen immediately. Many will be phased in, while others require study and consultation with affected industries. Additionally, regulators were given wide la ude to fill in details.
"There will be a lot of employment opportunities for lawyers," said Bert Ely, a banking consultant who expects a big push to find ways around new regulation. "I think a lot of entrepreneurial activity will be 'how do we end-around this?'"
In a harsh statement Friday, U.S. Chamber of Commerce CEO Thomas Donohue vowed to "work vigorously through all available avenues — regulatory, legislative and legal" to change the "flawed" legislation.
http://www.truth-out.org/big-banks-e...ill60811?print
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In the battle of regulated vs regulators, the regulated always win, because they have 100 of $Bs to win by committing their crimes well, while bureaucratic regulators have nothing to lose for doing their jobs poorly.
America is ed.
btw, payday loan sharks have been crippled with the limit on their interest being set at 99%, down from 1000$.
2,000 pages of financial overhaul legislation and neither Fannie Mae nor Freddie Mac are mentioned?
Just remember, any costs to the banks will be passed on to you.
^^^^^ Yes, it was the requirement that a separation be maintained between trading for clients and using the bank's own money for trading that I thought was good. Similarly, the attempt to go back to a version (however watered-down) of the Glass-Steagall Act.
It was in fact very watered down, but it was better than nothing. That is where I disagree with Judd.
"2,000 pages of financial overhaul legislation and neither Fannie Mae nor Freddie Mac are mentioned"
There are some legal actions on behalf of Freddie and Fannie to go after mortgages sellers who knowingly sold F&F toxic . I note that Yoni only mentions F&F and not the ers who sold to F&F.
Typical right winger, always parroting right wing fog of lies to hide the real culprits.
lol comics strips
Gimme a ing break.
Are we going to be linking to youtube videos of Bugs Bunny monologues to prove our points next?
Fannie and Freddie get the full loan packages and always had the right to accept/reject. They are the ones that told the brokers they would finance 100% with no verification of income.
Talk about parroting the party line...
I'm disgusted with Fannie, Freddie, AND the banks/brokers that fed them those crap loans, but the ultimate responsibility lay with Fan and Fred.
BTW, with Byrd's death there is a good chance this bill won't get out of committee in the Senate.
Yoni I'm still waiting for you to show me where Obama has spent a trillion dollars of his healthcare bill...2,000 pages of financial overhaul legislation and neither Fannie Mae nor Freddie Mac are mentioned?
Just remember, any costs to the banks will be passed on to you.
"always had the right to accept/reject."
DoJ is going after Goldman for selling $1B of they didn't expose as .
I guess the mortgage unloaders consider F&F to be "dumb" investors they can sell to.
As I've said many times, capitalism is basically an adversarial system where the seller tries to sell the tiest product possible for the highest possible price. It's fundamentally fraud and dishonest.
F&F didn't give a if they bought crap. All they wanted was to buy more crap every year than they did the year before so they could justify their exorbitant salaries and raises. They knew that in the end the US would pick up any losses.
I'm not absolving F&F, and esp not assholes like Franklin Raines who walked away with 100s of $Ms, but the real perps are the mortgage sellers who knowingly wrote ty mortgages, and then dumped them on F&F, and went off to write more ty mortgages.
A US regulation that would stop this fraud is the one in Denmark, where the mortgage writer must service the mortgage to maturity.
The lower cost (relative to other lenders) of risk to the GSEs strongly suggests the market was already pricing it in, pre-bailout.
I agree that the mortgage writer should always have some skin in the game even if they flip the note. I just don't see that happening in the US.
When I read what the EN sent, I just copy a few paragraphs at the most and then put a link. As long as you cut it up or leave some of the article out so they still have to go to the original source to get the entire article you are fine.
who aren't apart of this overhaul.Fannie and Freddie get the full loan packages and always had the right to accept/reject. They are the ones that told the brokers they would finance 100% with no verification of income.
Talk about parroting the party line...
I'm disgusted with Fannie, Freddie, AND the banks/brokers that fed them those crap loans, but the ultimate responsibility lay with Fan and Fred.
Current estimate is that taxpayers will blow $400B bailing out F&F, which really isn't that much considering that they blew $T2+ in Iraq, another $T1 in Afghanistan, and $700B every year on military bull .
Well, this legislation requires banks who issue mortgages to keep at least 5% of the loan on their own books. I don't think it is anywhere near enough, but it is a step in the right direction, and my undedrstanding is that the new agency may be able to stiffen some of these regulations once it is up.
No. Ultimately the responsibility lay with the banks and mortgage companies and investment houses that ALL wanted to get into the mortgage business so they could jack up their fees, which were paid out based on getting a warm body buying, not based on the ability of that warm body to repay the loan.Fannie and Freddie get the full loan packages and always had the right to accept/reject. They are the ones that told the brokers they would finance 100% with no verification of income.
Talk about parroting the party line...
I'm disgusted with Fannie, Freddie, AND the banks/brokers that fed them those crap loans, but the ultimate responsibility lay with Fan and Fred.
Read the book The Big Short. If you re going to opine about this stuff, at least make it an educated opinion, please.
After reading The big Short, (which is fairly technical but at least readable), then read The Devil's Casino, and if you are a glutton for punishment, then read Tower of Thieves, which, unfortunately reads like Faulkner wrote a book on the financial crisis.
The book police takes note with growing interest.
Thanks for the recommendations.
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