Posted on 08/15/2011 3:32:49 PM PDT by Qbert
Bet you thought Dodd-Frank was just designed to go after those greedy banks on Wall Street didn’t you? Well, there are always unintended consequences of regulation. Dodd-Frank is one of the worst bills ever passed by a Congress in the history of the United States.
Not only is it proving to restrict access to money by poor people, it is imposing crushing costs on smaller banks-effectively putting them out of business. This makes access to capital even tougher, because instead of going to a small bank where you can develop a relationship, a businessman now needs to go to a large monolith bank where they are a number.
Oh wait, there’s more.
Because of how the bill changes the way futures and options are regulated; along with how grain elevators and Futures Commission Merchants are regulated, your food costs are going up.
“If adopted as proposed, the amendments to Part 1.35 of the CFTC’s regulations would require, among others, all members of contract markets and SEFs and to keep records of all oral communications that lead to the execution of a commodity interest (i.e., all agreements, contracts and transactions within the Commission’s jurisdiction) or cash commodity transaction.”
Want to know how deep that regulation runs?
“all oral and written communications provided or received concerning quotes, solicitations, bids, offers, instructions, trading, and prices, that lead to the execution of transactions in a commodity interest or cash commodity, whether communicated by telephone, voicemail, facsimile, instant messaging, chat rooms, electronic mail, mobile device or other digital or electronic media.” These transaction records must be separately maintained and identifiable by counterparty. Moreover, such records must be maintained for a five-year period and must be “readily accessible” for the first two years of that period.”
Assume that you wanted to stay in business and not simply fold up your shop. What’s that verbiage going to cost you? The CFTC estimates that it will be somewhere between $16,750-$61,750 initially, and $12,600 annually once every member has a recording system. That means a farmer in a tractor that is talking to their broker monitoring the market all the way up the food chain to the hot shot trader on a trading desk.
No doubt that the costs will be significantly higher than that. Purely altering your operations will cost you more than that.
What’s that mean to the market?
Two who need to be arrested
All you have to do is l;ook at the names on the bill to know it’s queer and useless.
The author seems to think that is an unintended consequence of the law, rather than a box checked off on their big contributors' wish list.
You gotta be kidding!
Chris Dodd and Barney Frank - the two responsible for the housing market crash? These two guys were in charge of Fanny and Freddie, which required two bail outs so far, and are asking for another.
Now they're going to be in charge of the nations food? Why not just start shooting people at random? Wouldn't it be faster?
But we have to punish the “banksters” don’t we? Even if it means a little pain for us.
Maybe queer and ignorant? Queer and corrupt?
There's a bumper sticker in there somewhere.
Yes, and probably a hell of a lot less painful than having to be governed by jerk-offs like these two idiots.
“What’s that mean to the market?”
- You gotta be kidding!”
I messed up on that- didn’t see at the time that there were two pages to the article. Here’s what the author said after that question:
“...These extra layers of regulation mean that producers will have to charge a higher price for food. The price will be passed down from the field through the elevator, through the trading pits, through the food producers, and greet you at the checkout counter at the grocery.
All the paper will have to be stored in a temperature controlled warehouse, and all the conversations will have to use up space on a server somewhere. That adds to the costs.
Remember, it affects the entire industry. Not only the banks, but grain producers like $ADM, food producers like Kraft($KFT) and Kellogg ($K) and anyone that uses a market to hedge or manage their risk or get product to fill their production channels.
Repeal Dodd-Frank. Now. I appreciate the sentiment of the bill and think we need to do something with regard to banking, but this was obviously the wrong approach. It is as damaging as Obamacare. It is an economy destroyer.
Hint: Markets price in the future….
tip of the hat to SF. to download the actual legalese, click here
Here is just a sliver of companies affected by this one regulation:
$ABV $BUD $DFX $GSX $SAM $TAP $BAC $BG $C $CBOE $CME $HRL $ICE $MON $MS $NDAQ $NYX $POT $PPM $SFD $TYS $LUV, $UAL $XOM, $MFX, $ATPG, $DAL, $POR, $SO, $COP $OXY there are many more.”
I am so p*ssed about this bill! WE have always bought our computers at the same place with the buy now pay later option and had 6 months same as cash.For some reason last June they halved our line of credit so that when we went to buy one this past month there isn’t even enough credit there to buy one.Nothing has changed on our end credit rating still the same still own everything we did before?
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