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Ratigan's Four Simple Yet Brilliant Proposals On How To Fix The System

Tyler Durden's picture





 

This must have been one of those "so simple it would never occur to any politician" epiphanies. Four great points by Dylan Ratigan that should immediately be taken up by pro-reform politicians. If Barney Frank deems these are unenforceable or not worthy of his attention, replace Barney Frank immediately.

Dylan's four (shockingly logical) proposals on how to fix the broken financial system:

  • Inject transparency, primarily to bring almost $500 trillion in swaps to the forefront.
  • Capital to back Wall Street's gambling. It is a guarantee that very few firms will have Goldman's trading pattern each and every quarter.
  • Enact a tax-code to discourage short-term profits. "Fortunes should not be made in minutes but over years through the creation of value to society."
  • Break up the Too Big To Fail banking institutions. Start with Goldman Sachs. Right Now. Christine Varney, we are still looking at you.

Full must watch clip:


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Wed, 11/04/2009 - 14:04 | Link to Comment Ben_the_Bald
Ben_the_Bald's picture

Enact a tax-code to discourage short-term profits. "Fortunes should not be made in minutes but over years through the creation of value to society."

 

Daytraders are not going to like that.

Wed, 11/04/2009 - 14:20 | Link to Comment E pluribus unum
E pluribus unum's picture

I'm sure GS will be in favor of it too.

Wed, 11/04/2009 - 15:01 | Link to Comment jdun
jdun's picture

I'm against anything that deals in more taxes. Taxes are one of the main things that is killing America.

Wed, 11/04/2009 - 15:19 | Link to Comment chumbawamba
chumbawamba's picture

That and politicians.  And stupid people, but I repeat myself (at least in the main).

I am Chumbawamba.

Wed, 11/04/2009 - 18:48 | Link to Comment You Cant Handle...
You Cant Handle the Truth's picture

Taxes are killing America?  You do realize that America has done fantastic during times of much higher taxation, don't you?  

Ignorance of history is killing America, and your comment is fine evidence of that.

Wed, 11/04/2009 - 20:10 | Link to Comment Anonymous
Thu, 11/05/2009 - 06:18 | Link to Comment TumblingDice
TumblingDice's picture

I dont know how many times this has been said, but it is worth repeating:

Federal Reserve Act: 1913

Federal Income Tax: 1913

This was not an accident. Taxes are not even the main source of revenue for the government, going into debt is the main source. Taxes are a form of control. Too many little rascals in the street? tax baby cradles, diapers and baby powder. Too many people smoking for your liking? Tax cigarettes. Too many people drinking? Tax Alcohol. Not enough people using corn (for the corn lobby's liking)? Place a quota on sugar.

Taxes are a measure to make people do what you want. It is simply a form of leverage for the government that it should not have. They also create excess burden and that drags on the economy.

http://en.wikipedia.org/wiki/Excess_burden_of_taxation

Taxes are inefficient and stupid. But I would not even mind regular taxes, as long as we did not have the hidden tax of inflation, the most regressive tax of all. If inflation is not around, the need for taxes would be smaller since debt service payments would be smaller, and government spending would not have to necessarily be wasteful in order to create a glut in the market so that new money has to be created to cover the new debt, instead of the old money disappearing into treasuries.

So I would have to disagree with Dylan's point about taxes (not a frequent act). If we just remove the hidden tax of having the Fed (and hence inflation/printing) exist, we wouldn't even need his proposed tax to counter balance the negative consequences of that tax.

Wed, 11/04/2009 - 19:03 | Link to Comment Anonymous
Thu, 11/05/2009 - 09:12 | Link to Comment blindfaith
blindfaith's picture

No, actually taxes aren't killing America..it is the people who dodge taxes that are.  Wouldn't be nice if all of us could claim our "salaries" as long term capital gains, or write off every cent "earned" as a "business expense". Get rid of income taxes and replace it with a NO exemption national sales tax is the answer.  And include a penny tax on every stock trade, and the national debt will  be gone by next week.

Wed, 11/04/2009 - 15:43 | Link to Comment Anonymous
Wed, 11/04/2009 - 17:01 | Link to Comment I am a Man I am...
I am a Man I am Forty's picture

Increasing taxes for short term investment is ridiculous.  Just another way to force you to stay in the market.  Terrible idea.  Because I can make money in a shorter period tax me more??  Nonsense.  

Wed, 11/04/2009 - 17:24 | Link to Comment Daedal
Daedal's picture

+++Indeed!

HFT/GS Manipulation aside, traders encourage price discovery and provide for liquid markets. Duration is not the issue here. Ratigan is correct about value creation for business, but this problem is spawned from government interference in capital markets, not me selling MSFT to Mr. Durden after buying it yesterday.

Since we're on the subject, you shouldn't be punished for holding any asset for x amount of time vs y amount of time -- the whole capital gains tax structure is absurd. In effect, people get punished for putting their own capital at risk if that risk pays off.  Though, the government will punish you anyways for holding on to your money via inflation. Either way .Gov confiscates our assets.

Wed, 11/04/2009 - 16:26 | Link to Comment Missing_Link
Missing_Link's picture

I generally agree.  The only question is the time frame.

Just tax any profits made in under an hour.  Normal day traders don't make their profits on that kind of a time frame anyway.  It will, however, put the brakes on HFT.

Wed, 11/04/2009 - 14:20 | Link to Comment Rainman
Rainman's picture

But...but....Dylan doesn't seem to understand that TBTF was endorsed by the very government he's asking to unwind it. Think of the millions in campaign contributions going up in smoke if the Beltway critters reinstated Glass-Steagall.

Wed, 11/04/2009 - 14:22 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

4 things that will never happen under our political system.

Wed, 11/04/2009 - 15:04 | Link to Comment MinnesotaNice
MinnesotaNice's picture

... until they Goldman sucks every last red cent out of the American public... pretty soon Bernanke won't be able to print enough money to keep up with what Goldman sucks out every day.

Wed, 11/04/2009 - 17:15 | Link to Comment Miles Kendig
Miles Kendig's picture

I think that is the situation we find ourselves in presently MnNice.

Wed, 11/04/2009 - 16:40 | Link to Comment Sancho Ponzi
Sancho Ponzi's picture

Pelosi (jointly) owns hundreds of millions of dollars worth of CRE, and Tim, Barney and Ben will use their 'You can't handle the truth' argument against transparency ad infinitum. The facts will never be divulged because they can't let them be divulged, and those in power will continue to do anything necessary to kill the dollar. The resulting lives ruined, businesses crushed, and people left homeless and unemployed are merely collateral damage. Please understand they careth not.

Wed, 11/04/2009 - 18:35 | Link to Comment snorkeler
snorkeler's picture

Then Nancy, Tim, Barney & Ben need to be replaced due to a massive conflict of interest.

Oh right, that aint gonna happen.  What then????????

Wed, 11/04/2009 - 14:27 | Link to Comment faustian bargain
faustian bargain's picture

I can't see that these 'changes' address any fundamental sources of the problem. He might call them 'Real' but I call them 'Superficial'.

Wed, 11/04/2009 - 14:31 | Link to Comment hank_rearden
hank_rearden's picture

breaking up the banks will fix the symptom, not the problem, they'll all end up creeping back together again.

also, everyone and their brother agrees we need more transparency...it's the how that's the problem.

Wed, 11/04/2009 - 14:33 | Link to Comment chumbawamba
chumbawamba's picture

Transparency is clarified at the end of a rifle barrel.  Give everyone a gun and make competence of their use mandatory for all citizens, and that will clear up a lot of problems.

I am Chumbawamba.

Wed, 11/04/2009 - 15:19 | Link to Comment Anonymous
Thu, 11/05/2009 - 09:20 | Link to Comment blindfaith
blindfaith's picture

WOW...you guys have just solved what Planned Parenthood was trying to do all alone.  If Planned Parenthood had been an extension of the NRA or GOP, we would not be having a resources problem.

Wed, 11/04/2009 - 14:27 | Link to Comment tradertim
tradertim's picture

how can BSnbc allow someone like dylan ratigan to tell it like it is? we peons don't want the truth cuz 'WE CANT HANDLE THE TRUTH'.

fire dylan immediately and replace him with dennis 'beaker' kneale and steve LIESman.

Wed, 11/04/2009 - 18:51 | Link to Comment aswipe
aswipe's picture

I represent that remark.

Wed, 11/04/2009 - 14:29 | Link to Comment richardprice9
richardprice9's picture

Until every current and former GS employee is jailed, our country and it's financial system is doomed.

Wed, 11/04/2009 - 14:31 | Link to Comment chumbawamba
chumbawamba's picture

#5: Re-establish a Constitutional metallic monetary system.

I am Chumbawamba.

Wed, 11/04/2009 - 14:45 | Link to Comment Anonymous
Wed, 11/04/2009 - 15:40 | Link to Comment faustian bargain
faustian bargain's picture

#6: End the Fed

Wed, 11/04/2009 - 17:17 | Link to Comment Miles Kendig
Miles Kendig's picture

Personally Chumb I prefer the concept behind Colonial Scrip.

Wed, 11/04/2009 - 14:33 | Link to Comment hank_rearden
hank_rearden's picture

who allowed dylan ratigan and brilliant to be that close together?

Wed, 11/04/2009 - 14:33 | Link to Comment Jay
Jay's picture

Dylan isn't getting to the heart of the problem with his proposed solutions. The heart of the problem is dishonest money and a dishonest money system via the Federal Reserve.

Wed, 11/04/2009 - 14:44 | Link to Comment Anonymous
Wed, 11/04/2009 - 14:45 | Link to Comment Anonymous
Wed, 11/04/2009 - 14:49 | Link to Comment Jeff Lebowski
Jeff Lebowski's picture

Credit where credit is due.  Kudos to Dylan Ratigan.

Doing the right thing and doing the easy thing are very rarely the same path.

Wed, 11/04/2009 - 14:56 | Link to Comment Anonymous
Wed, 11/04/2009 - 14:58 | Link to Comment Anonymous
Wed, 11/04/2009 - 14:58 | Link to Comment Hephasteus
Hephasteus's picture

It's all in the roots of the trees. Anything that doesn't support you and asks you to support it is not worth your time or effort. The banks are not supporting america, wall street is not giving them the gains they need to cover the losses they get to retire and they threaten to crash the entire system if they don't get the support they need to be self destructive and socially destructive.

Wed, 11/04/2009 - 14:59 | Link to Comment buzzsaw99
buzzsaw99's picture

F$ck the system, let it fail.

Wed, 11/04/2009 - 15:21 | Link to Comment chumbawamba
chumbawamba's picture

Seconded.

I am Chumbawamba.

Wed, 11/04/2009 - 17:03 | Link to Comment economessed
economessed's picture

Thirded.  <TRIFECTA!>

And daytraders -- just what value are you adding?  I have no problem with your choice of livelihood, but face it:  you're like realtors -- you accumulate money by extracting it from the system, rather than producing something of value.

If we lost 20% of our farmers, everyone would suffer.  If we lost 30% of the daytraders, how would we be any worse off?

Hypocrite alert:  I spent 10 years writing bond trading algo's.  Flame on.

Wed, 11/04/2009 - 17:19 | Link to Comment Miles Kendig
Miles Kendig's picture

Cheers.

Wed, 11/04/2009 - 18:40 | Link to Comment snorkeler
snorkeler's picture

But then you saw the light!

 

 

Wed, 11/04/2009 - 14:59 | Link to Comment Anonymous
Wed, 11/04/2009 - 18:16 | Link to Comment Hephasteus
Hephasteus's picture

Ya there's super people who can do things much quicker than normal people. I heard Bill Gates can lift a tree off a child in a disaster area just by rebooting it. And oprah can cook enough food for 10 million starving babies in 38.9 seconds. These people are doing it all by themselves they got no spotters. I mean when you make 35 million dollars in a minute you could easily produce those relevant things in the real world. It's not like you are going to spend the money slobbering over 2 mllion dollar super cars because you care about the people you interact with.

But you see you would have to face that fact that your the fucktard trying to create the fucktard reality. Which is fine. But you are going to need alot of fucktard assistance to make that fucktard instant money mean a fucktard thing. So go fucktard yourself till you can figure out how to do it all by yourself like our fine bill gates and oprah can.

Thu, 11/05/2009 - 01:12 | Link to Comment agrotera
agrotera's picture

ROFL Hephasteus !

and now, for something completely different:

http://www.rofl.name/asciiart/

 

Wed, 11/04/2009 - 15:00 | Link to Comment Anonymous
Thu, 11/05/2009 - 12:04 | Link to Comment geopol
geopol's picture

No flaws in that comment...

Wed, 11/04/2009 - 15:00 | Link to Comment Anonymous
Wed, 11/04/2009 - 15:05 | Link to Comment Anonymous
Wed, 11/04/2009 - 15:12 | Link to Comment agrotera
agrotera's picture

Dylan is my hero!

Wed, 11/04/2009 - 15:14 | Link to Comment Anonymous
Wed, 11/04/2009 - 15:35 | Link to Comment iconoclast63
iconoclast63's picture

I agree with another poster who correctly said that breaking them up without taking away their access to the Fed and the fractional reserve banking process would simply allow them to creep back together again. Why should banks be allowed to create money out of thin air and loan it at a profit? Josiah Stamp explained it brilliantly in a speech at the Univ. of Texas in the 20's., " .... if you want to remain slaves to the bankers allow them to continue to create deposits.." (paraphrasing)

Wed, 11/04/2009 - 15:37 | Link to Comment Anonymous
Wed, 11/04/2009 - 15:50 | Link to Comment bugs_
bugs_'s picture

Let it burn.

Wed, 11/04/2009 - 15:59 | Link to Comment Anonymous
Wed, 11/04/2009 - 16:01 | Link to Comment Anonymous
Wed, 11/04/2009 - 16:12 | Link to Comment Anonymous
Wed, 11/04/2009 - 18:34 | Link to Comment Anonymous
Wed, 11/04/2009 - 16:24 | Link to Comment Anonymous
Wed, 11/04/2009 - 16:25 | Link to Comment Froggy
Froggy's picture

Is it me, or is Dylan sporting a Fauxhawk?

 

Oh, I and he's correct IMHO.  The tax change that would help would be one where the current short term cap gains stays where it is, and the tax itself is phased out completely over time.  Maybe at 5 years there is no cap gains tax.  That wouldn't do any damage to the day trader types and would hugely incentivize long term investments and carefully managed ones as well. 

Wed, 11/04/2009 - 17:00 | Link to Comment Miles Kendig
Miles Kendig's picture

Dylan has a good list here folks.  From my perspective it is missing a little.  Rather than saying; "weak", "bull shit" or "great" I will toss out my brief list to get hammered by all so I may have additional fodder for my considerations.

  1. That the rule of law be applied with equality to all and with preference to none governed by the concepts of transparency, fidelity and accountability that can be easily discerned. That individuals are held to account before the bar of justice for their individual actions and decisions.
  2. That no private, semi-private or public organization gathers unto itself such power at as to be able to hold the citizens of society hostage to its failure or ill health.
  3. That the agents of government are held to a strict and transparent interpretation as to what constitutes actions covered under the color of official capacity using the standards for personal & institutional responsibility to standards for transparency, accountability & fidelity.

There is more waiting to be discovered or defined.  I am not sure how to address the issues surrounding trading vs investing and how to control the rise of the machines and the algos that govern them and their operators.  I will, for the moment defer to the ideas that transparency, personal responsibility and the rule of law should most likely be used as a deterrent force.  The reason I think Dylan goes to taxes is simply because that is an easier and quicker pathway to follow.  However, any system that does not support the primacy of the rule of law as the protection form abuse cannot but fail in a society that purports to sustain individual freedom.

Wed, 11/04/2009 - 21:44 | Link to Comment Apocalypse Now
Apocalypse Now's picture

Miles- Great points on the rule of law, selective enforcement, and regulatory capture.

A few of my thoughts:

Transparency: The system has become so corrupted through regulatory and representative capture that politician campaign contributions & portfolio positions should be transparent (along with key regulatory government workers).  Also, all ownership positions in the debt or equity of a company above 5% should be public information (all ownership must be able to be drilled into for an ultimate individual not just a trust/company/corporate/sovereign wealth country level).Pierce the corporate veil!  In addition to transparency on the 500 trillion of derivatives, they need to be standardized and exchange traded.

The other point is that ownership must be known, must be mutually exclusive per share, and should be published (no multiple votes for the same underlying stok) and that naked shorting without locating shares should be impossible (applied to TBTFs in equities, bonds, and commodities including precious metals) just as infinite longs with no collateral/capital should be illegal.  Without these changes the fed and TBTFs can literally make the price of a stock anything they want it to be.  Spreadsheets on ownership would point out conflicts of interest and timing issues from insider information.

Thu, 11/05/2009 - 01:18 | Link to Comment Miles Kendig
Miles Kendig's picture

We are singing from the same hymnal.

Wed, 11/04/2009 - 17:10 | Link to Comment Anonymous
Wed, 11/04/2009 - 18:02 | Link to Comment MarketWizard
MarketWizard's picture

Wow such brilliance coming from a guy who used to host "Fast Money" ..Somewhat contradictory with his #3 suggestion!!

Wed, 11/04/2009 - 22:15 | Link to Comment Rainman
Rainman's picture

Yup.....but even Bubba Bill Clinton was reformed to live a monogamus lifestyle.

Wed, 11/04/2009 - 18:49 | Link to Comment KidDynamite
KidDynamite's picture

why why why do people still say that GS needs to be broken up before C and BAC, not to mention WFC??!?!?

 

Wed, 11/04/2009 - 18:58 | Link to Comment aswipe
aswipe's picture

Whether he is qualified or not does not matter. He speaks the truth for real solutions to our corrupt system. No one on MSM comes close to rattling the establishment like this. It is quite refreshing.

Wed, 11/04/2009 - 20:34 | Link to Comment Anonymous
Wed, 11/04/2009 - 21:20 | Link to Comment vachon
vachon's picture

I'm a far left-wing democrat and even I don't think we need more taxes.  Just a redisrtibution of where current taxes are going now.  Nix #3. 

Ratigan rocks.

Thu, 11/05/2009 - 01:22 | Link to Comment Miles Kendig
Miles Kendig's picture

Good to see you post.  I look forward to reading more of your work.

All The Best

Wed, 11/04/2009 - 21:44 | Link to Comment phaesed
phaesed's picture

He's kinda reminding me of Howard Beale in a Backstreet Boy kinda way....

Wed, 11/04/2009 - 22:58 | Link to Comment Anonymous
Thu, 11/05/2009 - 01:19 | Link to Comment Anonymous
Thu, 11/05/2009 - 01:22 | Link to Comment Anonymous
Thu, 11/05/2009 - 01:09 | Link to Comment Anonymous
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