Financial Reform/Communism Passes Senate, America Rich Again!
The financial reform bill passed the Senate! So exciting. "FinReg" is what people called it, on Wall Street and also on Capitol Hill. Both Chris Dodd and Barack Obama are very happy/proud. So what did they do, anyway? It's about 175,000 pages of legislation, so who knows? Wait, actually wedo know: The financial regulation bill deals with many issues and instruments that played a role in the Economic Collapse of 2008-Right Now, which means it does not cover anything that will be instrumental in the 2011-2019 depression, or the 2022-2028 recession, or the 2030-2097 "quiet time" on Earth, etc. But let's check with the experts anyway, so they'll feel useful offering their contradictory capsule assessments.
- "Wall Street wins this round. The 'teeth' of the Volcker Rule have been kicked in and there are enough holes elsewhere for White & Case to exploit on behalf of their clientele til the cows come home. The Dems unanimously voted for it. Interestingly, Republicans all voted against it. They didn't think the final version was strict enough or that it did enough to prevent Too Big To Fail." -- Christian Science Monitor
- "The bill is certainly sweeping in scope. It creates a new consumer-protection bureau, within the Federal Reserve, with powers to write rules for—and ban—financial products. It gives the government the power to break up any failing financial firm, not just banks, and pushes more of the clean-up costs onto surviving competitors, rather than the taxpayer. Those who securitise assets will have to retain more of the risk. Credit-rating agencies will be more exposed to legal challenge for their mistakes, and less able to cosy up to debt issuers. Under the so-called Volcker rule, banks will face limits on their proprietary trading and investment in hedge funds and private equity. Derivatives markets will no longer be left to do their own thing." -- The Economist
- "After months of lobbying, auto dealers and their influence peddlers on Capitol Hill succeeded in winning an exemption from oversight under a new Consumer Financial Protection Bureau. Dealers, who make almost 80 percent of all auto loans, bilk consumers out of an estimated $20 billion annually through shady practices like inflating a car's actual retail price by tacking on unnecessary products and services." -- Mother Jones
- "Banks will be allowed to keep most swaps dealing activity in-house, although the riskiest trading would be pushed out. They will also be permitted small investments in hedge funds and private equity funds. The concessions could lessen the impact on bank profitability." -- The Telegraph
- "Banks 'dodged a bullet,' said Raj Date, executive director for Cambridge Winter Inc.’s center for financial institutions policy and a former Deutsche Bank AG executive. 'This has to be a net positive.'" -- Bloomberg
- "Look, I think we're watching here a presidency in collapse. I really do. And I — we really haven't seen this in our lifetime here. It reminds me a lot of what happened to Jimmy Carter here. Almost every key indicator shows support for the president is cracking." -- Sean Hannity, Fox News