Today is the big day! The Prez will sign the new and improved FinReg bill into law….and it is everything they wanted….by they I mean Wall Street…..Obama has said….
“Because of this reform, the American people will never again be asked to foot the bill for Wall Street’s mistakes. There will be no more taxpayer-funded bailouts—period.”
The GOP immediately sent out their Agent Orange, Rep. Boehner, to condemn the bill and its passage (go figure)….which to me is astonishing because Wall Street made out like a bandit and the GOP should be pleased that the bill was so watered down…..or is it just a political tactic?
The bill authorizes the allocation of pubic funds to pay for the operation, without congressional approval, with the proviso that the major banks would subsequently be taxed to defer some of the cost.
This amounts to the institutionalization of financial rescue operations, instead of the ad hoc methods employed in the fall of 2008. The procedure is being put into place precisely because the regulatory overhaul fails to impose any real restrictions on the speculative activities of the banks.
It does not restore the legal wall between commercial banking and investment banking, a central reform carried out during the Depression of the 1930s to prevent deposit-taking commercial banks from engaging in the high-risk speculation that is the bread and butter of investment banks and brokerages. The weakening and final removal of this wall in 1999 during the Clinton administration encouraged the wave of speculation and swindling that led to the collapse in September 2008.
It does not cap executive compensation.
It does not eliminate or seriously limit trading in derivatives, the complex and opaque financial instruments that played a central role in the collapse of American International Group (AIG) and threatened to topple the entire banking system.
Instead, the bill sets up what some have called a Potemkin village of regulatory structures with little real substance, which Wall Street banks will have little difficulty manipulating and gaming. For the most part, the details concerning how much capital banks must hold in reserve, what percentage of their capital they can invest in hedge funds, which types of derivatives will be forced onto clearinghouses and exchanges and which will continue to be traded in the “shadow banking system,” etc. will be determined by the various regulatory agencies. It will grow the bureaucracy but will not cease the gambling by the Banksters with taxpayer money.
Once again the paid agents of Wall Street have successfully set the stage for another economic meltdown…….sooner rather than later……the only good thing is that youtube is up and alive and everything anyone has ever said about FinReg has been recorded and it will come back to them in the near future…….the American people are getting their Christmas goose early…..sorry to be a buzz kill!