The Dodd-Frank Wall Street Reform and Consumer Protection Act: The Triumph of Crony Capitalism (Part 1)

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Thu, 08/12/2010 - 14:36 | 518291 daneskold
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Choosing to not bail out private companies is better known as Laissez Faire Capitalism.

A new law was not needed to prohibit Congress from bailing out the banks.

And besides, if Congress changes its mind in the future to provide bailout funds, this FinReg will be no hindrance.

Stupid politicians.

Thu, 08/12/2010 - 13:11 | 518025 divide_by_zero
divide_by_zero's picture

DONK needs a flowchart similar to the Obamacare one

http://www.house.gov/brady/pdf/Obamacare_Chart.pdf  
Thu, 08/12/2010 - 12:48 | 517969 P-K4
P-K4's picture

Typo spotted in the first paragraph, " The Act marks the greatest legislative change to financial supervision since the 1930s." The correct wording should be "stupid-vision" not supervision.

Also, the law firm forgot to include the Council on Foreign Relations and Trilateral Commission as the agencies that will provide oversight.

Last, we include the addendum "There will be no more taxpayer-funded bailouts. Period." - "Unless I change my mind again or don't read the bill like my colleagues."

 

Thu, 08/12/2010 - 12:29 | 517931 tempo
tempo's picture

The most important point in the blog is that the financial crisis was caused by the insane lending to people who could never repay the loan.   This was done because there was no risk to the lender who immediately resold the mortgages to the Govt.    The inbred Washington/Wall Street insider deals have not and will not be stopped the the new "reform" laws.  IMO, it will accelerate since nearly all power, money, control is in the hands of a very few super powerful families, firms, media and politicians.  The system is similiar to those in Russia and China.   Extend and pretend.

Thu, 08/12/2010 - 11:58 | 517858 jc125d
jc125d's picture

It's all about the power. People, you have none. You are owned. And your impotence is rubbed in your face by your leaders. Where in the constitution have the powers taken by the state and used against us been granted? As Pelosi said: Are you kidding? Are you kidding? They do it because they can. They can because we let them.

Thu, 08/12/2010 - 11:54 | 517846 BigSkyBear
BigSkyBear's picture

Sadly the American people know more Season 3 American Idol contestants by name than their own elected representitives. Thanks for the breakdown on this fiasco.

 

Baaaaahhhhhhhh....

 

 

 

 

 

Thu, 08/12/2010 - 11:30 | 517794 Agent P
Agent P's picture

Well written (as always).  Thanks.

Thu, 08/12/2010 - 11:18 | 517766 hbjork1
hbjork1's picture

Econophile,

Thanks for the good work. 

Watching Dodd on C-Span during the final comments before the vote on that bill.  He was standing behind and over Blanch Lincoln jawboning her constantly as comments were being taken prior to the final vote on the bill.  She was seated and had to half turn and bend her head back to face him.  Because he went on and on and on while Barrney Frank was pontificating toward the conclusion, it certainly appeared that Dodd was trying to keep her from making comment.  Frank and Dodd teamed very effectively in bringing this monstrosity to a vote and into law. 

I concluded from that and from his nonsensical on camera remarks that Chris Dodd is one very slimey piece of work.  "The Apple doesn't fall very far from the tree."

It is one thing to operate in support of your consituants (banking interest), it is quite another to obstruct others in the legslative process.  

We have another election coming up this fall and future elections down the road.  Laws can be ammended once the public is angry enough.  Hard times that last long enough will shift public attention from "Dancing with the Stars" to what is going on in the legslative process. 

Unfortunately, it seems there will have to be some pain to create public interest in how things are being brought into law.

Thu, 08/12/2010 - 10:53 | 517712 InconvenientCou...
InconvenientCounterParty's picture

IMHO these rules sting the cash flow of the kleptocracy. You can tell by the reaction. The bankster clawback activity is picking up steam. Scurrying to buy a new U.S. regime. I imagine the deals are being sealed in the off-year, out of the limelight.

When the new regime rolls out enemy 2.0 and the fitted black leather, were officially effed. The next world war could be the rebel alliance (a.k.a the world) against the empire (U.S.)

 

 

Thu, 08/12/2010 - 10:53 | 517707 crzyhun
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Hey Admin/Dearest Leader, leave your KIDS alone!!

Thu, 08/12/2010 - 10:52 | 517706 I think I need ...
I think I need to buy a gun's picture

its a little late for any positive legislation they already took all the money and have all the physical gold cornered. Buy gold

Thu, 08/12/2010 - 10:49 | 517698 digalert
digalert's picture

CNBS Santelli: "why did they pass FINREG before the congressional study on the financial collapse concludes?"

 Good question, the report is due out in December.

Thu, 08/12/2010 - 11:45 | 517829 Ripped Chunk
Ripped Chunk's picture

Because December is after November

Thu, 08/12/2010 - 10:26 | 517618 Ripped Chunk
Ripped Chunk's picture

Dodd & Frank are filthy scumbags.  A symbol of all that is wrong with our current form of government.

Thu, 08/12/2010 - 10:28 | 517626 Widowmaker
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What's wrong with the fags of finance?

I hear they put out.

Thu, 08/12/2010 - 11:45 | 517824 Ripped Chunk
Ripped Chunk's picture

We put out with our tax dollars

They get rich.  I don't really care what their sexual orientation is. I despise crooks and assassins.

Thu, 08/12/2010 - 09:57 | 517543 Bitch Tits
Bitch Tits's picture

The financial industry has only itself to blame for this. They weren't as smart as they thought they were.

Thu, 08/12/2010 - 09:26 | 517492 Oswald Spengler
Oswald Spengler's picture

Barney's been taking it up the ass so long he wanted to extend the experience to the rest of us.

Thu, 08/12/2010 - 09:22 | 517486 Pinky
Pinky's picture

Over at my blog I titled my wrap-it-up post "It's All Over But the Whining."

This might be a little mindbending without one's first cup of coffee, but: When the private/financial sector owns the government lock-stock-barrel, aren't any surface attempts to regulate it, well, moot? The point is to regulate the competition. With this Enterprise to beat all enterprises, the private bankster/monopolist class has further entrenched itself and now is pulling up the moat. Surprise!

Oddly, given the ugly false choice I'd rather have it this way than the "other" stealth-overthrow that had been planned for us out of - ahem - Brussels/Basel. Srsly.

Thu, 08/12/2010 - 09:21 | 517481 Species8472
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Cause of housing bubble, let's not forget the favored cap gains treatment of $500k, revised upward with loosened requirements.

Thu, 08/12/2010 - 09:10 | 517461 aerojet
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"The President, like most politicians, lawyers, and economists, believes that the economic bust was caused by greed, excessive compensation, fraud, speculation, complex securities that no one understood, predatory Wall Street practices, and a lack of sufficient regulatory powers."

 

And is that, in fact, an incorrect evaluation?  I don't agree with the "lack of regulatory powers" part becuase that would mis-characterize what was really capture of regulatory powers (e.g. Madoff).

 

 

Thu, 08/12/2010 - 08:42 | 517411 RacerX
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"Atlas Shrugged" - Part 2

Thu, 08/12/2010 - 08:40 | 517406 BoeingSpaceliner797
BoeingSpaceliner797's picture

I have a question.  If the corporate/banking/oligarchal interests have coopted the US Federal government, then isn't this law really those interests taking over themselves? 

Thu, 08/12/2010 - 10:50 | 517703 Widowmaker
Widowmaker's picture

You are assuming that corporate/banking/oligarchal interests and the Federal Government aren't already one and the same to begin with.

Welcome to the matrix where the only change is more of the same.

Thu, 08/12/2010 - 21:56 | 519117 BoeingSpaceliner797
BoeingSpaceliner797's picture

Precisely.  Dem/'Pub and BigBusiness/BigGovernment being the most prominent examples of false paradigms served up for our diversion and division.

Thu, 08/12/2010 - 08:36 | 517396 newstreet
newstreet's picture

My understanding is OTC forex is history.

Thu, 08/12/2010 - 08:31 | 517388 The Rock
The Rock's picture

Please refer to it as the "Frodd" Act.

Thu, 08/12/2010 - 18:22 | 518817 Econophile
Econophile's picture

You are one clever dude. I like it. 

Thu, 08/12/2010 - 10:48 | 517669 Widowmaker
Widowmaker's picture

It's simply the fag act - for fags by fags.

Consumer protection is merely a cheap legislative prophalactic.   Wake me when fraud enforcement is discussed, otherwise all this nonsense called "re-form" is a distraction to continue ramming fraud up the people's asses.

Had enough of the thugs in charge?

 

Thu, 08/12/2010 - 10:00 | 517561 still kicking
still kicking's picture

I still think DONK is appropriate

Thu, 08/12/2010 - 10:28 | 517630 Lord Blankcheck
Lord Blankcheck's picture

D-ank

Thu, 08/12/2010 - 08:25 | 517379 Chunkton
Chunkton's picture

The bill was edited by some very smart people so that it seems that regulation has tightened and yet for the banksters it is business as usual, even the Fed escaped an audit and was given extra power.

This is a yet another huge win for the completely corrupt finacial industry from the completely currupt congress, life just keeps getting better. So a few bloggers and the peasant class complain, who cares as who owns the media? Whiners piss off, this is the change you suckers can believe in.

Thu, 08/12/2010 - 08:13 | 517366 Sean7k
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It was inevitable, that once bankers had raped and placed every developing country under their control, they would come after the developed economies as well.

Every US president has been a traitor to the "natural rights of man". Every congress has passed legislation that seeks to destroy liberty. Every supreme court has been a legitimizer of tyranny.

You have to give then credit though, they know and understand the weakness of populations and the best methods of managing them. We are beasts of burden, milked of our productivity until slaughtered for our final value.

Dark? History is a story replete with all the examples necessary to teach us the workings of the elite- both sophisticated and violent. This is the nature of humans. Those that commit violence, those that receive violence and those that die under violence. 

 

Thu, 08/12/2010 - 09:12 | 517465 aerojet
aerojet's picture

That's pretty close to how I explain our lives to people whom I talk to.  I try (in vain) to convince them that voting is a waste of time.  You're a farm animal, your vote is an illusion. 

Thu, 08/12/2010 - 11:02 | 517733 Blankman
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It always strikes me as funny when you start talking politics with people and voting for the president comes up.  Very few people even understand that no their vote does not count, it is the electoral college who votes yeah or nay on the seat of the president, not the hoi polloy.  I have been reading that several states are trying to abolish the electoral college and just use the popularity vote.     

Thu, 08/12/2010 - 08:27 | 517382 The Rock
The Rock's picture

Long live the House of Ruthlesschild and the Frauderal Reserve!!

Thu, 08/12/2010 - 08:01 | 517355 zobes
zobes's picture

"The American people will never again be asked to foot the bill for Wall Street's mistakes," Mr. Obama said.

When were we asked? The Federal kleptocrats just did like the elitist ruling classes have always done - they just went right ahead and spent the money that they have yet to collect from us. This is the "Change We Can Expect".

Thu, 08/12/2010 - 10:55 | 517716 Conchy Joe
Conchy Joe's picture

Were the American People ever asked?.... The Government "volunteered" that on our behalf.

 

Thu, 08/12/2010 - 08:55 | 517418 Translational Lift
Translational Lift's picture

"The American people will never again be asked to foot the bill for Wall Street's mistakes," Mr. Obama said.

Correct....They WILL NOT ask us....they will just continue to spend/print like it grows on trees.  Come to think of it......that's where it does come from!!  Do any of these azzholes have any idea what a Trillion $ is or how much energy/work/time is required to generate a Trillion $??

SICK  SICK  SICK

http://www.pagetutor.com/trillion/index.html

Thu, 08/12/2010 - 08:13 | 517367 breezer1
breezer1's picture

obama is an idiot. perfect for the role.

Thu, 08/12/2010 - 07:56 | 517352 tmftdoyle
tmftdoyle's picture

why even read it, we know that two of the longest serving, most corrupt members of congress wrote it. why would one expect anything but a power grap for the dynamic duo's fan club.

Thu, 08/12/2010 - 07:55 | 517351 tmftdoyle
tmftdoyle's picture

why even read it, we know that two of the longest serving, most corrupt members of congress wrote it. why would one expect anything but a power grap for the dynamic duo's fan club.

Thu, 08/12/2010 - 07:52 | 517350 AnAnonymous
AnAnonymous's picture

unregulated “laissez-faire” capitalism. They ignore the fact that the financial industry is one of the most regulated sectors of our economy. When they say “laissez-faire” what they really mean is that they want to completely control the financial sector.

 

Well, well, how is that measured? By the weight of legislation texts books? The number of rules enacted and enforced? How?

What are the other most regulated sectors of the economy? What are the least?

I dont know if that act is that important to understand but working on such premise, where is the difference with the 'other side'(Obama, Bernanke etc)?

Thu, 08/12/2010 - 10:10 | 517566 Mercury
Mercury's picture

Well, well, how is that measured? By the weight of legislation texts books? The number of rules enacted and enforced? How?

Yes, that would be a good place to start.  The U.S. residential mortgage market has been the most regulated and meddled with financial market on the planet for a long time and yet it was at the very root of one of the biggest financial disasters of the modern era.  See if you can connect the dots.

Everyone knows about The Community Reinvestment Act of 1977 but that's just the tip of the iceberg.  Check out some of the mortgage market regulatory highlights from 1989-1990 alone:

The HUD Reform Act of 1989, The Homebuyers and Renters Relief Act of 1989, The Housing Opportunity Zones Act of 1990, The Department of Housing and Urban Development Accountability Act of 1989, The Community Housing Investment Partnership Act, The Recycling of Existing Assets for Cost-Effective Housing Act of 1989, The Low-Income Housing Credit Act of 1989, The Low Income Housing Preservation Act of 1989, The Housing Affordability Act, Homeownership and Opportunity for People Everywhere Act of 1990, Fair Lending Enforcement Act of 1990, The Housing and Community Development Act of 1989, The Housing and Community Development Act of 1990, The Community Housing Investment Partnership Act, The Homeownership Assistance Act of 1989, The Home Mortgage Overcharge Prevention Act of 1989, he Neighborhood Mortgage Lenders Accountability Act, he First-Time Homebuyers Assistance Act of 1989, The Homeownership Through Sweat Equity Act of 1989 and The Fair Lending Oversight and Enforcement Act of 1989. (hat tip: ep http://equityprivate.typepad.com/ep/2009/02/dare-ye-inquire-concerning-s...)

Does that look like laissez faire?

Add to that the fact that FNM and FRE, with their lower cost of capital,  were able to pick off most of the low hanging, good credit borrowers from the marketplace and that, late in the game, the government would simply just sue or legally harass banks if their loan portfolios didn't "look like America" and you end up with guys like Angelo Mozillo who gave the government the results they wanted: lots and lots of loans.

I guess we need even more cowbell.

Fri, 08/13/2010 - 10:21 | 519763 AnAnonymous
AnAnonymous's picture

It looks as it looks.

Measurement is always done relatively to other things.

It might measure activity per year for law producing institutions.

But it gives no hint on the financial sector being one of the most regulated sectors.

What about other sectors?

Thu, 08/12/2010 - 13:29 | 518075 Zeus Gekko
Zeus Gekko's picture

 

That's because the myth of homeownership is one of the biggest scams going. It was the ultimate perpetual bubble, or so they thought, but no one bothered to tell them that there is no such thing thing as perpetual growth. $400,000 dollar homes being purchased by people making $40,000 per year... yeah right.

Everyone from the FED on down were actively promoting this disaster that could only end one way - and that was badly. Sir Alan Greenscam himself was the biggest cheerleader for ARMs and he knew full well what the out come would be, as did the banksters that assembled and packaged the trash because they had no skin in the game and took out derivatives to clean up after the meltdown. This was planned and executed and by both DC and Wall Street. It was a TEAM effort.

 

Thu, 08/12/2010 - 14:36 | 518274 Mercury
Mercury's picture

I actually think a lot of otherwise smart and thoughtful people arrived at the home ownership = wealth creation vehicle honestly.  For decades one Great Society type program after another failed to help alleviate multi-generational poverty or near poverty in any significant way.  The data showed however that people who bought and owned their own home built far more wealth over their lifetimes than those who didn't.

Bingo. Silver bullet - expand homeownership and you have a viable means of solving one of the most intractable social problems of the post WW II era. Let's make us some 'Acts' to make that happen! The problem is not all real estate is created equal and not every potential mortgage holder is of uniform credit risk.  At one point there were X number of otherwise creditworthy people who were being refused mortgages based on their skin color or ethnicity but not nearly as many as we've been led to believe.

The only way to fulfill the mission then was to loosen standards. More loans were then made which created more demand for housing stock.  Wall Street was able to resell the mortgage debt to yield hungry asset managers through a combination of financial alchemy and an appeal to the fact that US residential mortgage defaults had been historically very rare (mostly because of higher lending standards and different demographics).

Amazingly, even with all this chicanery, the U.S. home ownership rate was only juiced a few percentage points: http://2.bp.blogspot.com/_aGvk7g9hxtg/TFHZy-uL_mI/AAAAAAAACrM/A7FLJGnAd1...

That's all it took to blow the whole system sky high.

Thu, 08/12/2010 - 13:06 | 518009 sbenard
sbenard's picture

What a great post! Very informative! Thanks for that!

Might I add just one word? Near the very end, where you wrote, "...you end up with guys like Angelo Mozillo who gave the government the results they wanted: lots and lots of loans."

I would like to change it to, "you end up with guys like Angelo Mozillo who gave the government the results they wanted: lots and lots of /BAD/ loans."

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