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For All of You Guys Who Thought Goldman Was Invincible and the Administration Wouldn't Touch Them...
I have been advocating this limitation for some time.
- Banks' Size, Trading Would Be Limited in Obama Plan to Reduce
- Risk-Taking •Obama Says No Bank Should Have Proprietary Trading: Text of Announcement
- Obama Proposes New Curbs On Banks' Size, Risk-Taking
For
those that listen to CNBC pundits knocking the separation of deposit
taking entities from trading risk assuming entities, here are some
common sense rebuttals.
This proposal would not have stopped the AIG failure
No,
it would not have. It would have prevented deposit taking institutions
such as Citibank and JP Morgan from trading on a speculative basis with
AIG though. Theoretically, it would have allowed those that would have
got jerked on the AIG to have sunk or swam on their own accord. We
never had to stop AIG, we had to stop the repercussions of what an AIG
would have caused.
This proposal would harm lending and jobs. This is a bad time.
I
don't see how. The banks aren't lending now, and they have the capital.
The reason why they aren't lending is #@%$% balance sheets and credit
impaired assets.
It's unfair!
What
the hell is this? Kindergarten! You're right, it's not fair. The banks
have received more than their fair share of assistance. See 10 Ways to say No, the Banks Have Not Paid Back Their Bailout from the Taxpayer!
I am all for limiting the size and risk federally insured institutions
can take. You don't have to face limitations, just leave the insurance
program!
The big foreign banks will just come and take all of the American business if "Glass-Steagal" lite is enacted.
Bullshit!
Wall Street has been the leading financial center of the world for
many, many decades. We just repealed Glass Steagal in the Clinton
administration. Are we suffering from short-term memory-itis?
Ben Bernanke might have outperformed Wall Street on the AIG bailout. The Maiden Lane protfolio has thrown off over $6 billion of cash plus capital appreciation...
This is slightly off topic, but I must correct another CNBCism. Are you guys daft? Let's get this straight. I buy a portolio in distress and back stop the seller for $181 billion. I then take another $350 billion to artificially inflate the bid under these assets. I then sit back as some obvious "non-investor" types claim I am this expert trader that outperformed the other traders that I bailed out and gave an implicit taxpayer put option to. Can you guys even calculate that ROI?
I've
been calling for reducing risk and breaking up the big banks for some
time. It is good to see that politicos read my work :-)
-
- The Fed Believes Secrecy is in Our Best Interests. Here are Some of the Secrets
- Why Doesn't the Media Take a Truly Independent, Unbiased Look at the Big Banks in the US?
- As the markets climb on top of one big, incestuous pool of concentrated risk...
- Any objective review shows that the big banks are simply too big for the safety of this country
- The ARE trying to kick the bad mortgages down the road, here's proof!
- Why hasn't anybody questioned those rosy stress test results now that the facts have played out?
- If a Bubble Bubble Bursts Off Balance Sheet, Will Anyone Be There to Hear It?
- If a Bubble Bubble Bursts Off Balance Sheet, Will Anyone Be There to Hear It?: Pt 2 - JP Morgan
- If a Bubble Bubble Bursts Off Balance Sheet, Will Anyone Be There to Hear It?: Pt 3 - BAC (the bank
- If a Bubble Bubble Bursts Off Balance Sheet, Will Anyone Be There to Hear It? Pt 4 - Wells Fargo
- If a Bubble Bubble Bursts Off Balance Sheet, Will Anyone Be There to Hear It? Pt 5 - PNC Bank
- The Next Step in the Bank Implosion Cycle???
- A Must Read: An Independent Look into JP Morgan. This contains the "public preview" document (
JPM Public Excerpt of Forensic Analysis Subscription 2009-09-18 00:56:22 488.64 Kb), which is free to download.
btw to make those comments about aig, you must be really ignorant about finance! "expert" a%*...
You can't believe what Obama says (I and my kids, friends worked our asses off to elect this guy, with millions other suckers...we learned the hard way)
let's see what he does...
the betting is NOTHING...
just watch
That's one of the reasons I'm actually suspecting that things may be different this time. Obama's been quietly distancing himself from Geithner and the fact that Bernanke's confirmation vote is no longer on the docket would suggest that Obama's let it be known to Reid that while he won't withdraw Bernanke, he likely won't push to see him reconfirmed either.
I think the one to look most carefully at is Raum. He was instrumental in picking the current advisory staff, and was a fairly staunch DLCer back in the day. I see his hand in the selection of Geithner and in many of the bank appeasement strategies that have been followed for the last year, and I've noticed that as the outcry has increased Raum has receded from publicity (and presumably from influence).
Obama was a lawyer, not an economist or financier. He made the mistake of relying too heavily on his advisors, without necessarily fully appreciating that they may be conflicted. He's now paying the price by having a "safe" Senate seat get picked off by a conservative populist and consequently losing what little leverage he had there. I dare say that Geither is probably not getting a lot of phone calls from his boss of late.
I'm not a huge Obama fan - I felt at the time that he was elected that he was too young, too politically inexperienced, and too easily influenced by the need for political expediancy. He's better than Bush, who I felt was essentially just an alcoholic placeholder for Cheney, who was an unprincipled opportunist who took advantage of the situation to advance his own fortunes. Overall I think that Obama is still relatively idealistic, but he just got slapped in the face hard by the reality disconnect that occurs when living in the Bubble, and the next few months will likely see him trying to tear himself out of it, at least for a little while, as he attempts to regain the ground he lost.
On the other hand if he does manage to adhere to the spirit and not just the letter of his proposals, his life span may end up being measured in month. When trillions of dollars are at stake, those in power won't let that disappear easily, especially if the populist wrath brings the ravening hordes down on the banks' doorsteps.
You may have a point about Obama , Kennedy made a mess of the bay of pigs but matured into the job and tried to take on the hidden goverment
Of course the rest is history
what you say about aig is wrong. apart from the fact that citi was not one of the bigger aig counterparties, more importantly, buying cds on a portfolio of loans, or cdo's can be considered hedging rather than "prop trading". So, don't see how this is relevant. not that i think this type of trades will be made again...
by Anonymous
on Thu, 01/21/2010 - 16:15
#201205
Reggie Middleton - I can't believe you are allowed to post on this website.
Please, there are plently of straight up partisan conservatives that post here...but only conservatives seem to think they are the only ones that have an issue with Wall Street, progressives do to...and frankly the only thing that will get us any reform is for the Ron Pauls and Bernie Sanders to get together.
Nothing wrong with Reggie being happy about what Obama is saying and crowing he predicted Obama would come around...don't know if O will do anything, but at least politicians feel like they have to talk about it...1.5 years ago almost all of them asked how high when Wall Street said "jump".
by Anonymous
on Thu, 01/21/2010 - 15:38
#201159
Goldman Will Benefit From Obama’s Proposal, Bove Says
Goldman Sachs Group Inc. will benefit from President Barack Obama’s proposal to limit Wall Street risk because it may force deposit-taking banks to unwind trading operations, Rochdale Securities analyst Dick Bove said.
I don't care if GS makes huge money as long as they are not a protected monopoly, as long as they didn't get free money from Fed, so long as the have to compete fairly in an open market, as long as the do not trade with FDIC backed deposit...If GSacs is de-banked and becomes an giant trading and investment house that is completely private and completely detached from the taxpayer tit....I DO NOT CARE IF THEY MAKE A TRILLION DOLLARs...just as long as its in competive, free market without using my tax dollars as capital or as free insurance.
This is not about anti-wealth, its about anti-cronyism, its about fair and free, healthy fraud free markets, its about anti-insider trading, its about tax payer money never going to speculators, its about FDIC regulating anyone that wants their back stop, its about the FED not taking their ability to print our currency as means to make and break favored and un-favored businesses.
+112323
Gee Reggie, it only took you one whole year to be right. Good job man! Great call!
Hardly a moment to say see I told you so. Why don't you wait and see what the real effect is before coming across so smug.
Obama has no clue as to what is really going on. In my years, most politicians don't. They have egos, and not brains. Obama is probably one of the least experienced Presidents we've ever had, and he's being played like a violin. Moreover, his primary interest is to expand the entitlement state, and align globally.
He just wants to be liked, and build a legacy.
So he (finally) had to follow Volcker's advice.
Otherwise, more evidence of the Peter Principle forthcoming.
RM, I understand that because obama is half black you can support him, but give me an f'ing break.
Please man, you're moving off your core values. Repubs have been trying to limit the GSEs for frigging years and nothing gets done. Where's your applause there.
If you think the banks will screw us, you ain't got nothing on the GSEs.
This is all populist pandering with no real meat, just you watch.
Take a look at this.
Would you buy a Collateral Default swap from that guy behind TheBamster?
http://s.wsj.net/public/resources/MWimages/MW-AD202_obama__MD_2010012112...
a wonderful place to sell bridges here to some on zero hedge lol
We've got a long long way to go and one canned speech is nothing to get excited about.
D. Stewart Armstrong
Thanks Reggie.
pssst...sti, it's a real laugher. every sell side analyst has them losing money throughout the end of 2010 yet another 52 week high. you know their balance sheet.
today, credit suisse guy came out with outperform.
this one will be fun to watch.
Notice how Obama drags out Volcker when he wants the little people to think he is getting tough with the banks? Tomorrow, he puts Volcker back in the closet and its 'business as usual'.
When Emmanuel, Geithner, Rubins, Summers, Bernanke are ushered out the door and their replacements aren't GS retreads, he may be serious. Until then, don't hold your breath.
Notice how Obama drags out Volcker when he wants the little people to think he is getting tough with the banks? Tomorrow, he puts Volcker back in the closet and its 'business as usual'.
When Emmanuel, Geithner, Rubins, Summers, Bernanke are ushered out the door and their replacements aren't GS retreads, he may be serious. Until then, don't hold your breath.
malfunction of the edit button lol
obama should just outlaw the debt lol
obama should just outlaw the debt lol
obama should just outlaw the debt lol
how to delete lol
obama should just outlaw the debt lol
eratta
obama should just outlaw the debt lol
Agree with the author completely. This law will effect Goldman more than anyone else. And while it is fun keeping up the grouchiness by saying the timing is suspect, this did not happen overnight. Just look at all the material behind it and everyone they've gotten on board with it, its been in the works for months. To those who wanted Obama to come in and clean out Wall Street right after the last administration gave them a trillion dollar bailout and the economy was in tatters be realistic. There was more important business to tend to before going to "war" with Wall Street. Now that they are back on their feet thanks to the trillions of tax dollars the Bush administration gave them, its time to start changing the way they do business so they don't put the entire system at risk again. But I'll leave it to the 80-year-old grouches to just keep on crying about everything regardless of how much they contradict themselves.
white wash city
the same old same old under a different rug ,
Reggie Middleton - I can't believe you are allowed to post on this website.
Nothing is actually going to happen and if it does, it will be watered down badly before it passes Congress. Barney Frank already saying implement Obama plan sloooowly. This will be buried in the lobbying maze and no one will remember it.
So, it took a year for The Anointed One to notice the tall guy (elephant) in the room. As the Church Lady would say..."Isn't that special".
I guess we'll see if it's more BS or if Obama really can get pissed off. The problem for DC Dems is they got smacked with a message from Mass. and now those that are going to run for Nov. are scared stiff. They might just have to start disappointing the graft if they want to keep their jobs. People are paying attention.
On the other side, Obama can read the writing on the wall. He's F'd if he does and he's F'd if he doesn't. Now we may really get to see what his core principles are and how well he can fight. I hope I'm surprised.
The Senate Dems have been playing with the 60-vote supermajority for a year in order to fleece more $$$ out of WS and the healthcare industry. They never had 60 with Leiberman - it was a sham. Now that they really don't have it there's no reason to maintain the pretense. (Reconciliation here we come?) Should be real interesting to see what happens. I think it's open season.
Lots of Kabuki Theater in store for us now folks!
Break out your kimonos and buy that company that sells that white makeup.
Goldman Will Benefit From Obama’s Proposal, Bove Says
Goldman Sachs Group Inc. will benefit from President Barack Obama’s proposal to limit Wall Street risk because it may force deposit-taking banks to unwind trading operations, Rochdale Securities analyst Dick Bove said.
http://www.bloomberg.com/apps/news?pid=20601087&sid=anWa3pOh_gIs&pos=3
I think Buffett is absolutely right on this:
“There ought to be a huge downside,” said Buffett, whose Berkshire Hathaway Inc. is the largest shareholder in Wells Fargo & Co. “Make it so that the CEO of an institution that fails, or goes to the government and needs help, really gets destroyed himself financially. Why should he come out any better than somebody that gets laid off as an auto worker at General Motors?”
Buffett, who collects a $100,000 salary as Omaha, Nebraska- based Berkshire’s leader, said CEOs must act as the “chief risk officer” of their companies. He has repeatedly criticized bankers for failing to realize that housing prices could fall and said they exacerbated their mistakes by borrowing to increase the size of their failed bets.
“I think you have to change the incentives,” Buffett said on the cable news channel. “It’s nice to have carrots but you need sticks. The idea that some guy is worth $500 million and leaves and only has $50 million, that’s not much of a stick. There ought to be a huge downside.”
AMEN!!!!!
"The World Bank said that even with the recovery, 64 million more people will be living in extreme poverty in 2010 than would have been the case had the crisis not occurred."
Yet Lloyd (Lord?) Blankfein continues his $68M struggle each and every day ... doing God's work!
But hallelujah ... today his former partner at the collection plate, 'ol Hope & Change himself, has suddenly gotten religion, and along with former sinners Geithner, Summers, and Barney Frank took the stage to share their born again status with the plebians.”
I will believe it when I see it. I think we will get some watered down version that really doesn't reign these crooks in at all - Obama is in bed with them just like Bush was - look who he has at Treasury.
Who is going to enforce the regulations the Keystone Kops? AKA
S.E.C.? They are eating donuts in the GS comissary gameroom.
Obama has to get back some of his support from the public or he won't get re-elected and the tide is turning against the DEMs. He went along with the strategy of geitner, big banks, and the fed, and it didn't work now there will probably be a battle between the banks and Obama via the stock market and we will see who is boss.
Read the The Presidents populist proposal for the banks at http://politicsandfinance.blogspot.com. This proposal is a way for Obama to try and save his political ass.
I would suggest term premium just jumped, if we take this at face value regardless of motive, I think bubble blowing just came out of fashion. Bernanke reappointment ?? Volatility just arrived be ready LOL
"I don't see how. The banks aren't lending now, and they have the capital. The reason why they aren't lending is #@%$% balance sheets and credit impaired assets."
I both agree and disagree with this statement
1. The banks may have capital but they do not have enough if they mark to market
2. I agree that banks should not lend until they enough capital and are healthy again
but at the risk of repeating myself on these pages I fail to see how taxpayers money should be transferred to both equity and bondholders.
This is the most important point - recapitalisation of banks do not require the risk capital to be subsidised by the taxpayer.
Once the banks are recapitalised agents can have the option of providing risk capital at a higher return if they wish and subsequently they will take much more interest in the lending policy of their banks
I believe the legislature has something to say about what, if anything, will pass into law.
By the time the Finance committees are lobbied into submission, or wined, dined and fucked into acquiescence by
nubile Eurasian wimmen (and some boys for Frank), senility will have robbed you and you won't remember a word of TheBamster's speechifying.
YEAH !!!!!!!!!
GO VOLKER OBAMA.....
YEAH !!!!!!!!!!!!!!!
Reggie - my thought exactly.
I'm a progressive and a populist and I say Bless you Senator Brown...if Kennedy was still around, the Dems congress and admin would not been afraid for their livelihood, they would have take til Nov for them to even start thinking about turning on Wall Street.
Clinton/Bush/Obama admins and corrupt Dem and Repub congress 1996-2009 bowing to Wall Street made me sick.
While the rest have to sink or swim, while the rest of have compete with others based on our merits, while the rest of us have to obey laws against fraud, theft, insider trading, conspiracy, while the rest of us have to pay taxes, while the rest of us can suffer bankuptcy if we get sick or make a bad business bet, while the rest of can only expect govt help if were are in most disabled state and even then social spending is decline, they were given essentially diplomatic immunity to committ any crime with noinvestigations or arrest, the goverment wil take care of them no matter how poorly they perform, the government will take care of them even tho they have no need and have more money for the 30 or so years of their lives already than many of will have in whole cities, the government will give them monopolistic positions and take down their competitors, a they govt will pay them our tax money and let them hide their income and pay lower taxes on their income they we have to pay on our honest wages..Hmmm kinda like John Edwards two Americas...but its no longer poor and middle class, is the poor so-called middle class and a tiny tiny elite that live in two seperate and unequal worlds...
If you get "almost free" money from Fed, if you get backed stopped by FDIC, if you get monopolisitic and favored/protected positions, you get regulated.
Hedge funds and financial wholesalers/retailers should all be private entities, have at it take risks, buy faux insurance to cover it, crash and burn or make your clients fabously wealthy, just don't involve the taxpayer.
Deposit banks with acces to Fed money and FDIC back stop should simply be regulated credit utilities, end of story.
Brown, you made this progressive happen, not that it really has anything to do with your message, but a year and half after us screaming our lungs out at Congress the might actually listen to us instead of Wall Street
these proposals are bandaids for treating symptoms....the most powerful elixir in the world is moral hazard and that simply does not exist anywhere in any way shape or form...
i would have let aig go belly up the first time....and i would not have given a rat's ass about the financial fall out...send out fema to form tent cities and soup lines until the crisis passede.
i am favor of resurrecting glass-steagal...and then smashing the fire companies down to size by raising capital gains and reducing employee taxes....
the even better solution is to abolish the fed, establish gold as money, abolish the federal income tax ( and i am an opponent of the (un)fair tax), and abolish 70% of the government including the bloated blood thirsty military...
well Leo step up aand buy the dip.
Shhhhhh! I am quietly buying this dip...LOL!
Are you invested up to your eyeballs in SolarCity's lease program, Leo?
$105 million in 2008 from USBankcorp and another $90 million in Dec. 09 to meet demand. PG&E is forced to pay excess power in cash as of 2010 instead of just credit on your bill.
Very attractive to Calif homeowners... Lowe's is selling solar panels off of the shelf. Yes Calif has a lot of foreclosures but they have a lot of solvent home owner as well... ready to buy Leo's solar investment company products...
How'd a guy from cold cloudy Canada figure that one out?
This is smoke, just to make every PEASANT think they are after the banksters.
A real change would be reinstall all the FASB rules to prevent mark to robbery and off balance fraud.
Gov is just pretending they care.
BUBBLEAMERICA STILL BUSINESS AS USUAL.
what obama does at this point is irrelevant. the banksters have already looted our country and paid themselves obscene bonuses.
But... isn't this unfair for the banks?