Posted on 01/22/2010 8:11:16 AM PST by AniGrrl
I'm not sure I believe what I'm hearing on CNBC coming out of The President's mouth.
Is he really listening to Paul Volcker? Finally?
Here's what I heard that I liked - a lot.
1. Limit the Scope - The President and his economic team will work with Congress to ensure that no bank or financial institution that contains a bank will own, invest in or sponsor a hedge fund or a private equity fund, or proprietary trading operations unrelated to serving customers for its own profit.
2. Limit the Size - The President also announced a new proposal to limit the consolidation of our financial sector. The President’s proposal will place broader limits on the excessive growth of the market share of liabilities at the largest financial firms, to supplement existing caps on the market share of deposits.
To the Citizens of this nation: You have just been given the MEANS to stop the crap that got us into this economic mess.
GET OFF YOUR ASS, PHONE, FAX AND PROTEST IN PERSON DEMANDING ALL OF THE ABOVE HAPPEN RIGHT NOW - OR SHUT THE HELL UP NOW AND FOREVER MORE ABOUT THE ECONOMY SUCKING!
(Excerpt) Read more at market-ticker.denninger.net ...
[I only agree that any bank that engages in risky investments should either lose its government insurance or pay a much higher premium. ]
How about just let them fail, like the good Lord intended.
You have it. What he says is always a lie to cover what he is doing. I have no faith that he is anything short of a ideologue and that he intends to make this nation a third world country.
His actions will be what I believe.
“He is trying like hell to change the subject.”
I agree, we hear one thing then he turns around and does another. We won’t be fooled anymore.
If the Obumbler wants to clean up the banking sector, he has to start with Fannie/Freddie, not the private banks.
Indeed. I usually like Denninger's analyes but this one isn't right.
Two wrongs do not make a right. This will always be true.
These actually sound like common sense proposals to me, despite the fact they are coming from the Obama Administration.
Which also tells me they are not populist enough to have the desired effect of firing-up his base. That is gonna take something like a national cap on credit card interest (rolling back to before Congress passed their regulations) and a ban on ATM fees. They are gonna get a lot of heat from Progressives to do something that average people will actually notice.
“No business, regardless of the industry, should be allowed to become SO big that government is FORCED to bail them out or risk a global financial catastrophe.”
No business, regardless of the industry, should be bailed out. Period. Keep government out of it. If you fail, then suffer the consequences.
No, we should not.
It all sounds so good....right? All this populist nonsense is just that. It was not banks that caused the banks to have problems. It was the government securities relating to mortgages that they traditionally invest in for safety reasons that caused the mess!
Banks for the most part, did not need money until their investors, as in the case of the investment banks, withdrew their funds all at once during the crash in 07-08. Some of the biggest did not need money but were forced to take it by the government. The government promised to get out of their faces after the crisis and they lied. Obama is using the crisis to further regulate the profits of investment banks and this is not good for the markets or the economy.
Regular banks where one gets loans and saves money were deregulated some years back so they could expand what they do to include selling insurance and securities. The Glass Spiegel bill had ties their hands and was modified under republican congressional control to release the stranglehold government had previously had over them. This did not cause the problems but the left needs a bogeyman!
The real source of the problems were Fanny Mae and Freddie Mac and Sallie mae which are government highly regulated and secured so called private institutions. Various groups and cabals in the congress forced rules on them for lending that made it possible for any idiot to borrow money from them. These government sponsored lending institutions must in turn sell these loans to private investment banks to keep the pot of money fresh so they can continue lending to idiots which they did.
The investment banks then do what they are designed to do and package these loans, now called securities into all sorts of financial products that are sold worldwide but they don't keep much of it as that is not what they do. This is how Goldman Sachs, who lost billions in other investments, was not hammered as bad as some others who invested in this crap. Goldman was lucky but other investment houses with different investment strategies were not.
These securities which were originally based on mortgages and home improvement loans come in all sorts of flavors for the markets. The more these things were broken up, the wider area the risks associated with them was spread. This is a normal aspect of lending and the banks only did what they are designed to do. But when the original loans were not paid, the entire system began to break down. The banks who purchased these highly rated securities thought they were safe. But many insured themselves against loss by buying a form of insurance called a credit default swap. As it turned out, the bulk of these default insurance securities were sold by AIG. That is how they got caught up in this mess and by no fault of their own because the ratings companies mis-rated the risks largely due to the governments implies backing of the original loans.
So you see.......we once again are back to the government, time and time again as we follow the money.
To sum up, because I could go on all day with this crap. The Congress of the United States of America used their regulatory power to force lenders they regulated, Fanny ad Freddie, the biggest of them all, to lend to unqualified borrowers. They in turn could not pay the money back and never could have done so even in good times. This rippled through the system causing untold damages still to this day. The system did what it was supposed to do. A time-bomb of sorts was inserted into the system by the government!!!! Bush warned about this multiple times as president but Barney Frank told him to go to hell.(in so many words)
So.......the answer is more government regulation????????More government meddling into private transactions??????A Bank Tax???????
NO! Not over my broke and dying body.
Nope! Just switching to Plan B
They did not have to bail out anyone. The market cleans up it's own mess.
The problem here is that the government has not cleaned up it's mess which caused all this to begin with.
The FDIC was put in place to handle regular banks and it worked just fine. CITI bank scared them out of their shorts because of the huge size of a international bank, but CITI only needed money because it was being asked to buy another bank by the government. In fact the government cause all of this to happen.
No doubt, that one or two huge international banks can be a issue if the government is asked to do something with them, but that is no reason to screw with all the banks and remake the industry.
All the changes deemed necessary can be done under existing regulation authority.
Obama needs to use the so called crisis to do something. He wants complete control of the banks. he will use the populist notion that the banks are responsible for the bad economy to do what he wants. Hugo Chavez wanted and got the same thing Venezuela for the same reasons
.
This entire administration needs to go, and go now. They are reckless and dangerous, and if we don't wake up and smell the coffee soon, we will collapse financially, socially and morally.
The posting of this thread tells me we are not smelling the coffee. We are ignorant and still asleep.
That’s essentially what I was proposing.
Did The President FINALLY Wake Up? NO same plan just new speeches.
That said, it won't have much of an impact on our economy.
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