Repubs want to undo Wall St. Reform

[gumOnShoe]

Source

Now, regardless of whether people stupidly requested loans they couldn't afford; it is very clear several banks stupidly granted stupid loans that wouldn't be paid back. It was mutual. There's little to no disagreement on this point. There is disagreement on regulation, but the regulation is designed to stop some of the catastrophic excesses that led to the entire fucking collapse of our economy. It is very clear that when banks are allowed to make fucking mistakes, they will fucking do so and with a fucking relish.

So, there are a couple things we can do. We can let them fail and take us all down with them or we can try to make it harder for them to do stupid things by implementing certain regulations. Some, but not enough (in my opinon) regulations were passed by Dodd-Frank.

From the above link:

In a two-pronged approach that began with starving funds from relevant federal agencies like the Treasury, Securities and Exchange Commission, and Commodity Future Trading Commission, the GOP now has launched into the symbolic phase of floating repeal legislation favored by the banking lobby.

Republicans have proposed measures that would eliminate provisions in Dodd-Frank making credit-rating agencies like Standard & Poor's or Moody's liable if their initial ratings are faulty; destroy the establishment of a derivatives "clearinghouse," through which companies using the complicated financial instruments to hedge commercial risk must exchange them; exempt private equity fund managers from having to register with the SEC; raise capital thresholds for companies needing to register with the SEC; and eliminate "burdensome" data collection requirements for publicly traded companies.

So basically, the Republicans want to go back to the wild west. Where the banks can say, fuck you all we're taking you down with us.

I hope you Republicans who voted for these dirt bags are happy. They really are doing a great job of trying to ruin this country.

[Camarohusky]

At 3/17/11 08:57 PM, gumOnShoe wrote:

Now whil I am very much a supporter of keeping Wall Street on a leash, the list of things below don't seem that dangerous to me.

Republicans have proposed measures that would eliminate provisions in Dodd-Frank making credit-rating agencies like Standard & Poor's or Moody's liable if their initial ratings are faulty;

Initial ratings only? Investing is speculative. Making a faulty rating here and there is all but inevitable. This would be a problem if they were trying to limit liability for recklessly (MPC style recklessness) keeping ratings high, such as they were with Enron the day before bankruptcy. Also, this would be bad if they were trying to remove the recent wedge placed between the rating parties and the investing parties.

destroy the establishment of a derivatives "clearinghouse," through which companies using the complicated financial instruments to hedge commercial risk must exchange them;

Nothing wrong with derivatives. They are risky, just like hedge funds, and every seasoned investor knows it. the problem with derivatives is when they are sold down the totem pole to retail investors.

exempt private equity fund managers from having to register with the SEC;

I would some more info on this, but even at the worst I don't see this as too much of an issue. I would like to see exactly what role these parties play in investing so I know where to place them in the scope of the 33 and 34 acts. Don't mistake non-registration with not being a security. All non-registration does is make it so that these parties don't have to go through the expensive process of making their info public. As long as they are securities they are subject to the most of the 33 and 34 act liability provisions.

raise capital thresholds for companies needing to register with the SEC;

Again, I would like to know exactly what is meant by this. This could mean a couple of things, but I think I know what they are getting at and I don't mind it. A rule of thumb with companies is that if you aren't going to raise 6 million at any given time, do not register as you will nto make any money due to the costs. Perhaps they are wanting to raise the cap in section 3(b) of the 1933 Act to higher than $5 million, quite small in terms of distribution standards. In that case they would need to petition the SEC to increase the $1 mil cap of Reg D Rule 504, and the $5 mil caps of Reg A and Reg D Rule 505.

Either way, these sort of ditributions are small beans when compared to the eight figure offerings of the big companies and the 9 figure offerings of behemoths like Google and Facebook (estimated).

and eliminate "burdensome" data collection requirements for publicly traded companies.

There are three categories of "publicly traded companies": unseasoned, seasoned, and WKSIs. Are they meaning all three, the top two, or just WKSIs? The top 2 file the S-3 form which allows them to refer heavily to other already filed SEC forms. Perhaps they want to streamline and allow for more cross referencing. However, the amount of information that goes out, in many cases, falls under their fiduciary duty to the shareholders and cannot be reduces at penalty of a derivative suit.

Again, I would like more info here. Either way, this would not be too harmful, as most retail invstors not only don't read the prosectus or the 8-K S-K, and alike, they wouldn't understand them if they did read them.

So basically, the Republicans want to go back to the wild west. Where the banks can say, fuck you all we're taking you down with us.

These issues you mentioned here have little to nothing to do with the recent economic crisis. Mos tof those issues lie in the anti-fraud provisions, and certain relationship provisions of various act, but not the topics you mentioned before.

[RydiaLockheart]

It's not just Repubs. Since the Reagan administration, every administration has contributed to some form of deregulation. Look at how the Clinton administration threw Brooksley Born under the bus, for chrissakes.

What we really need is to reinstall the Glass-Steagall act, then most of this will stop.

[gumOnShoe]

At 3/17/11 10:44 PM, RydiaLockheart wrote: It's not just Repubs. Since the Reagan administration, every administration has contributed to some form of deregulation. Look at how the Clinton administration threw Brooksley Born under the bus, for chrissakes.

Yes, but this is the most recent regulations. The ones we just established.

What we really need is to reinstall the Glass-Steagall act, then most of this will stop.

I agree.

[SmilezRoyale]

The very thought of it makes me feel so naked and unprotected.

[Ranger2]

gumOnShoe, quit whining and saying how every single Republican is evil and how every Democrat is a knight in shining armor.

[SadisticMonkey]

At 3/17/11 08:57 PM, gumOnShoe wrote: Now, regardless of whether people stupidly requested loans they couldn't afford; it is very clear several banks stupidly granted stupid loans that wouldn't be paid back.

1. You're ignoring the fact that the government actually WANTED these loans to be made. See: Community reinvestment act, Fannie and freddie mac, et al

The government wanted as many loans being made as possible

2. The only reason they could afford (the risk) to make these laons is because the federal reserve was giving them a practically endless supply of near-free printed money.

Blaming "greed" for anything is meaningless. You can't change human nature.You CAN get rid of the federal reserve.

It was mutual. There's little to no disagreement on this point. There is disagreement on regulation, but the regulation is designed to stop some of the catastrophic excesses that led to the entire fucking collapse of our economy. It is very clear that when banks are allowed to make fucking mistakes, they will fucking do so and with a fucking relish.

bailouts make banks take less risk right

right

So basically, the Republicans want to go back to the wild west. Where the banks can say, fuck you all we're taking you down with us.

Technically the 'wild' west was far more peaceful than other US colonies.

You're acting like the housing collapse happened on a completely free market, when reality this is far from the truth.

I hope you Republicans who voted for these dirt bags are happy. They really are doing a great job of trying to ruin this country.

Hey, wait a minute. Didn't your godking president support the bailouts? Those things that helped those awful nasty banks socialise their losses?

More importantly: Those things that made those "too-big-to-fail" banks EVEN BIGGER, meaning when they inevitably crash again, they won't be able to be bailed out, and they will completely destroy the American economy?

[RydiaLockheart]

At 3/18/11 09:09 PM, SadisticMonkey wrote: Hey, wait a minute. Didn't your godking president support the bailouts? Those things that helped those awful nasty banks socialise their losses?

The bailouts went through under Bush, not Obama. But you are absolutely correct that Obama is beholden to Wall Street. He got a lot of campaign donations from them, and that "financial reform" bill is a joke. Plus, his cabinet is full of Wall Street guys.

[WolvenBear]

At 3/17/11 08:57 PM, gumOnShoe wrote: So basically, the Republicans want to go back to the wild west. Where the banks can say, fuck you all we're taking you down with us.

I hope you Republicans who voted for these dirt bags are happy. They really are doing a great job of trying to ruin this country.

Actually, if they follow through, it's great. Let people make moronic risks...and then FAIL.

No more bad risks follow. Its simple.

[WolvenBear]

At 3/17/11 10:44 PM, RydiaLockheart wrote: It's not just Repubs. Since the Reagan administration, every administration has contributed to some form of deregulation. Look at how the Clinton administration threw Brooksley Born under the bus, for chrissakes.

There hasn't been a single instance of deregulation in either of our lifetimes. The CRA was expanded greatly under Bush Sr, Clinton, and Bush Jr. People who cry "deregulation" are simply clueless.

What we really need is to reinstall the Glass-Steagall act, then most of this will stop.

Yes, institute something that never worked. That will fix the problem!

[Camarohusky]

At 3/19/11 04:59 AM, WolvenBear wrote: Actually, if they follow through, it's great. Let people make moronic risks...and then FAIL.

No more bad risks follow. Its simple.

Hmm, in that case the S&L crisis should have never happened, because of the Great Depression. And the Dot Com Crisis should have never happened. The current recession should have never happened.

Proof that the "people will fix the market" philosophy is complete and utter bullshit.

[SadisticMonkey]

At 3/19/11 12:04 PM, Camarohusky wrote: Proof that the "people will fix the market" philosophy is complete and utter bullshit.

DERP

because these all happened on a completely free market without a centrally controlled money supply, right?

[Camarohusky]

At 3/19/11 06:05 PM, SadisticMonkey wrote: because these all happened on a completely free market without a centrally controlled money supply, right?

Hey look! A red herring! No! Really! Over there!

Wolven's point was that people learn from their mistakes. And the three most recent major recessions, all largely created by reckless and shady investing, are pretty damn good evidence to the contrary. What the Federal government did in any of these sitautions is 100% irrelevant.

[WolvenBear]

At 3/19/11 12:04 PM, Camarohusky wrote: Hmm, in that case the S&L crisis should have never happened, because of the Great Depression. And the Dot Com Crisis should have never happened. The current recession should have never happened.

But did those people actually suffer? No? The government bailed them out?

Well, then you don't really have a point huh?

Proof that the "people will fix the market" philosophy is complete and utter bullshit.

No, it's unrefutable truth.

[Camarohusky]

At 3/22/11 04:13 PM, WolvenBear wrote: But did those people actually suffer? No? The government bailed them out?

Ummm... Yes they did. The entire market of S&Ls disappeared. Major Texas law firms were toppled. The damage from the S&L crisis was so broad that an entirely new form of business structure was created (after only two forms had existed from the beginning of the concept of entity organization).

The biggest accounting firm collapsed after the dotcom bust. Major firms like Worldcom and Enron disappeared and their jobs went with them.

Currently, while many firms have been bailed out, a ton of businesses have collapsed.

In all of these crisises major players in the respective messes were jailed.

Hard to say that there were no consequences.

No, it's unrefutable truth.

I assume you mean irrefutable, but either way you're wrong. Firms lost upwards of 8 figures of dollars because of the fallout from all three recessions. Even firms that were hands off in these recessions were hit dramatically because of the collapse created by bad actors. Not a single firm, save those who luckily bet against the economy, would say they are better off now than before.

The collapses are bad for those at the top. The promise of wealth without consequences in not why people do these bad and risky acts. Greed, an undending part of human nature, is the common bond here.

[WolvenBear]

At 3/22/11 04:29 PM, Camarohusky wrote: Ummm... Yes they did. The entire market of S&Ls disappeared. Major Texas law firms were toppled. The damage from the S&L crisis was so broad that an entirely new form of business structure was created (after only two forms had existed from the beginning of the concept of entity organization).

Well, that's a neat line, but it belies reality:

http://en.wikipedia.org/wiki/Savings_and _Loan_Crisis#Causes

The damage to S&L operations led Congress to act, passing the Economic Recovery Tax Act of 1981 (ERTA) in August 1981 and initiating the regulatory changes by the Federal Home Loan Bank Board allowing S&Ls to sell their mortgage loans and use the cash generated to seek better returns soon after enactment;[7] the losses created by the sales were to be amortized over the life of the loan, and any losses could also be offset against taxes paid over the preceding 10 years.[8] This all made S&Ls eager to sell their loans. The buyers-major Wall Street firms-were quick to take advantage of the S&Ls' lack of expertise, buying at 60%-90% of value and then transforming the loans by bundling them as, effectively, government-backed bonds (by virtue of Ginnie Mae, Freddie Mac, or Fannie Mae guarantees). S&Ls were one group buying these bonds, holding $150 billion by 1986, and being charged substantial fees for the transactions.

Selling bad equity for nearly full value isn't "suffering". But nice try.

The biggest accounting firm collapsed after the dotcom bust. Major firms like Worldcom and Enron disappeared and their jobs went with them.

Two firms? Holy crap!

Did either of them have anything to do with the bust? Well, no. But it sounds good on paper!

Currently, while many firms have been bailed out, a ton of businesses have collapsed.

In all of these crisises major players in the respective messes were jailed.

Hard to say that there were no consequences.

Jail isn't punishment? Wait, I'm confused! No consequences...except life in jail.

Well that's better than a fine!

I assume you mean irrefutable, but either way you're wrong. Firms lost upwards of 8 figures of dollars because of the fallout from all three recessions. Even firms that were hands off in these recessions were hit dramatically because of the collapse created by bad actors. Not a single firm, save those who luckily bet against the economy, would say they are better off now than before.

The collapses are bad for those at the top. The promise of wealth without consequences in not why people do these bad and risky acts. Greed, an undending part of human nature, is the common bond here.

Yet, for many of these firms, they not only saw billions in government rescue, but they were guaranteed FULL financial backing. That hurts your REALLY cherry picked theory.

[aviewaskewed]

At 3/18/11 08:34 PM, Ranger2 wrote: gumOnShoe, quit whining and saying how every single Republican is evil and how every Democrat is a knight in shining armor.

Except that's not exactly what he said. Or has ever said actually. I've seen him be quite critical of our current DEMOCRAT President.

So do me a favor and quit whining about people whining and then attributing stuff to them they never actually said. Kthx.