The new 2200 PAGE bill designed to STOP RISKY BEHAVIOR on Wall St. (CAN WE HAVE ONE TO STOP RISKY BEHAVIOR IN WASHINGTON???????????!!!!!!!!!) got final approval from the Senate last week and was signed by the President. Since it is so long (AGAIN), we are still awaiting the tasty little tidbits that will fall out of the 2200 pages that are not necessarily about Wall St.
The new bill is supposed to bring a new era of consumer protections and focuses on banking restrictions. Of course, we need more Government regulators, a council to lookout for risks in the financial system and guards for consumers in financial transactions. (SARCASM just in case you think I mean it!) More rules, more paper, more frustration, and probably even LESS effectiveness.
So called Shadow financial markets (THOSE WHICH ESCAPED THE OVERSIGHT OF REGULATORS?????????????? I THOUGHT THEY ALL DID) are now under scrutiny and (GET THIS ONE) it gives the GOVERNMENT more Power to break up companies that THEY claim threaten the economy. If you cannot think of a dozen ways that politicians can misuse that one then you are not really trying.
Large, failing companies would be liquidated or broken up with the costs assessed to surviving peers (NOW WHAT EXACTLY THAT MEANS WILL GIVE THE LAWYERS A FEW DAYS IN COURT). Hidden fees and unreasonable terms on loans will be controlled and ability of the borrower to repay will be established. (Believe it or not BANKERS USED to MAKE LOANS based on whether YOU COULD PAY THEM BACK!!!!!!!mind boggling, isn't it??)
Unfortunately, the Federal Reserve gets some more power in all this but with Congressional oversight. (uh huh, uh, huh we've played that game before-FEDS PLAY CONGRESS-FEDS WIN 10-0). PLUEEZE!
Many of the provisions of the new law won't go into effect until 2011 plus since regulators have to write new rules and then figure out how to enforce the new rules. (YOU KNOW THE SAME WAY THEY ENFORCE OUR IMMIGRATION LAWS!!!!!!!)
Among the outcomes of this bill is an immense new power over private business. There will be a DIRECTOR of the INDEPENDENT CONSUMER PROTECTION BUREAU. This agency replaces the protection powers of current banking regulators. The Bureau of Consumer Financial Protection is a big expansion of Government power over individual private businesses and banking, cornerstones of our FREE ECONOMY. This was bitterly fought by large banking institutions and the Chamber of Commerce in a losing battle because it will regulate mortgages, credit cards, and simple payday loans as well as all forms of finance.
At least an exception for businesses considered too small to be a risk to the financial system was included! (WHATEVER MOM AND POP BUSINESSES THAT HAVE BEEN ABLE TO SURVIVE ARE NOT CONSIDERED A THREAT. BRILLIANT!!!!!!)
There will also be a Financial Services Oversight Council composed of the Treasury secretary, the Federal Reserve Chairman and the heads of regulatory agencies that will monitor financial markets and looking for potential threats to the nation's financial system. (GOOD LUCK WITH THAT!PERHAPS THEY'D BETTER START WITH GOVERNMENT SPENDING OF 12.5 TRILLION DOLLARS!!!!!!!!)
The bill does force credit rating firms NOT TO ALLOW RATINGS to issuers of debt-backed securities in public sale documents (like hedge funds of commercial risk) by threat of lawsuit. So that folks will know they are buying SCUM at their own risk.
The President promised that "the American people will never be asked again to foot the bill for Wall Street's mistakes" However, the Government's mistakes with Freddie Mac and Fannie Mae that helped to prime the pump that caused the meltdown of the economy remain on the taxpayer's bill!!!!!!!!!!
Unfortunately traditional banks that held to reasonable rules and good loans will be penalized by the bill as well with additional costs. (EVIDENTLY WE HAVE REACHED A PERIOD IN HISTORY WHEN ONE SHOE FITS ALL AND EXCEPTIONS CANNOT BE CONSIDERED!!!!!!!)
In a nutshell "the bill targets potentially lucrative trading in risky over-the-counter derivatives and aims to force certain banks to end trading for their own profits." Good, but unfortunately, Congress cannot put things in the "nutshell" as 2200 pages attests.
The bill also dictates how much reserve (money held in a sort of escrow) companies now require and establishes resolution funds (held aside) that would cover the costs of their dismantling as a potential threat to our society????????? The government could dismantle even healthy firms they considered a grave risk?????to the economy. WHO ARE THESE GENIUS THAT HAVE STAYED HIDDEN DURING IN ALL THIS TURMOIL??????????IF THEY CAN DETERMINE SUCH THINGS--LET THEM STEP FORWARD AND SPEAK TO US!!!!!!!!!! What potential for abuse.
Federal Deposit Insurance Corp will be allowed to borrow TAXPAYER MONEY from the Treasury temporarily to help cover costs of winding down a large firm and is to be repaid by other large banks over time??????????(Excuse me????IS THIS A 'I AM MY BROTHER'S KEEPER' KIND OF DEBT?I can't explain this one to you) and I cannot not understand why this is not a bail out? What if no one repays???
The Federal Reserve for its obvious lack of oversight in last year's crisis will lose some former power and limits will be set on the Fed's unilateral ability to inject large amounts of money into financial institutions. The bill will also take away the Federal Reserves consumer regulation authority and subject the Federal Reserve to a broad audit by Congress' investigative functionaries. (AH YES--UH HUH)
Shareholders of companies acquire in the bill a NON-BINDING vote on top executive pay. Federal banking regulators have right to approve the compensation practices but not the pay of banks and bank holding companies.
But still no broad controls of Fannie Mae and Freddy Mac??????Are they in there????????Did I miss them???????? BETTER QUESTION: Did CONGRESS MISS THEM??????????
The bill also requires 68 studies of various complex and interconnected fields because of its sweeping reforms. The health bill, we are now finding out, had 40 studies which leaves a lot of information of be presented on both bills. Evidently the thorny issue of Freddie Mac and Fanny Mae fell into this category of STUDY FOR FUTURE REFORM!!!!!!!!! (KICK THE DIRT UNDER THE RUG--MAYBE WE'LL NEVER HAVE TO SWEEP IT UP?????) Cost to taxpayers for all these studies???They must be free because the cost was never figured. (JEEZ)
Some of the studies like MORTGAGE FORECLOSURE SCAMS have no deadline or follow-up rules. Others like FINANCIAL LITERACY AMONG INVESTORS have deadlines but require no action. The study on hedge funds and trades on the various banks' accounts has a deadline and mandate for action. What about the two FF's or is it (F...up again?????)
Regulators have up to two years to write many new required regulations which prolongs uncertainty and there will be a lot of lobbying going on in that time.
Certainly reform of some kind was needed as we've explored in these blogs previously. But why not let WALL STREET CLEAN UP ITS OWN MESS with Government oversight?????Why more new bills costing taxpayers "mucho dinero" and more useless agencies?? Why not let Congress take care of the concerns brought on by previous bills that activated things like Fannie Mae and Freddie Mac???????? Because it's the political fodder (the old feed bag) that counts here!!!!!!!!!!!!!!!!Making politicians look good to a public who thinks Big Government is the solution to all of life's problems.
CHEERS, CONNIE
No comments:
Post a Comment