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Time For Tim Geithner's Annual Top-Ticking Op-Ed, In Which We Learn That It Is Time To Panic About America's Banks
- Bank of America
- Bank of America
- Barney Frank
- Chris Dodd
- Commodity Futures Trading Commission
- Consumer protection
- Elizabeth Warren
- Fail
- Fannie Mae
- Federal Deposit Insurance Corporation
- Freddie Mac
- Great Depression
- Gross Domestic Product
- House Financial Services Committee
- Ohio
- recovery
- Richard Cordray
- Securities and Exchange Commission
- Tim Geithner
- Transparency
- White House
When just under a year ago, Tim Geithner penned "Welcome to the Recovery" he top ticked the zenith of the business cycle to the day if not the hour, with the economy finding itself in a straight line contraction ever since then, blissfully delayed by a 9 month QE2 detour. Now that the QE2 is no longer a factor, we are already seeing economists everywhere cut their Q2 GDP forecasts to sub 2%, an effective stall speed for the economy in real terms, and reducing their full year economic forecasts. Which is why we were delighted to learn that today Geithner has just released his latest iteration of a top-ticking missive, this one titled inappropriately enough "Dodd-Frank Has Made Our Banks Stronger" which is supremely ironic because not only has Dodd-Frank not made anything stronger as it has not even been remotely implemented, but as Bank of America, Goldman and Citi's Q2 results have just confirmed, the US bank sector is now the weakest it has been in years. Thus, when accentuated with a Geithner adminition to not panic our only advice is to do precisely the opposite. Oh yes, it took precisely 25 days between Geithner's heartfelt appeal to America's idiot class last year and Bernanke's Jackson Hole appearance. We wonder if this year it will be shorter.
From The WSJ:
Dodd-Frank Has Made Our Banks Stronger
By Tim Geithner
Two and a half years ago, with our country on the edge of a second Great Depression, we met with the president in the White House to discuss whether to move in those first months of his administration to legislate fundamental reform of the financial system -- or wait until we had put the crisis behind us.
The president made two key decisions. First, he chose to move forward, knowing that the forces of opposition to reform would grow stronger as the memory of the crisis receded. And second, he asked us to write draft legislation rather than propose broad principles. The president did not want the new rules to end up being written by those who brought us to the edge of catastrophic financial failure.
In June 2009, the administration submitted to Congress a proposal that would fundamentally reshape the financial system. It was designed to lay a stronger foundation for innovation, economic growth and job creation with robust protections for consumers and investors and tough constraints on risk-taking. We drew on ideas and insights from reform-oriented thinkers across the political spectrum.
As the Democratic Chairmen of the Senate Banking Committee and the House Financial Services Committee Chris Dodd and Barney Frank initiated negotiations on the bill, we expected backing from both sides of the aisle. Even after that proved impossible in the House, where reform passed initially without a single Republican vote, we remained hopeful that common-sense efforts would garner bipartisan backing. But senior Republican negotiators on the Senate Banking Committee were unable or unwilling to define a core set of reforms they could support. Ultimately, Dodd-Frank passed with only six Republican votes.
Where are we today, a year since the Wall Street Reform and Consumer Protection Act was signed into law?
By almost any measure, the U.S. financial system is in much stronger shape, not just relative to the depth of the crisis but also relative to conditions that prevailed before it hit.
We have recovered most of the investments the government made to put out the fires and avert disaster. While many misperceive the investment made in banks under the Troubled Asset Relief Program as an unfair and unjust gift to the financial sector, we have already turned a profit on these investments, and we may do so on all the government intervention programs. Moreover, these actions have helped to restart economic growth, increase the value of American families' savings by trillions of dollars, make it possible for businesses to borrow again, and prevent a second Great Depression.
All financial crises are caused by too much leverage, and by reducing leverage, we have taken the most important step toward diminishing the risk of future crises. We have forced the largest financial institutions to take less risk and to hold much stronger financial cushions against the commitments they make. Our banking regulators have reached global agreement on new capital standards that require the world's largest financial firms to hold roughly three times more capital relative to risk than before the crisis.
And for the first time, we have the ability to extend these types of limits on risk-taking to firms that may not call themselves banks but could still pose catastrophic risk to the economy were they to fail.
The Securities and Exchange Commission, the Commodity Futures Trading Commission and the banking regulators have outlined the major elements of reforms to bring oversight, transparency and greater stability to the $600 trillion derivatives market.
The Federal Deposit Insurance Corporation has developed new tools to safely unwind or break up large nonbank institutions that fail in the future, without exposing the taxpayer to any risk of loss. This framework, together with the tougher capital requirements, derivatives reforms, and the limits in the law on future bailouts will make our system more resilient in crisis. They will also help curb the expectation that taxpayers will in the future step in to save the financial industry from its mistakes.
The Consumer Financial Protection Bureau has already proposed new ways to simplify disclosure of mortgage and credit-card loans so that consumers can shop for the best terms and be protected from abusive and predatory practices. And the president has selected former Ohio Attorney General Richard Cordray to serve as the bureau's first director, building upon the powerful legacy that Prof. Elizabeth Warren has established in setting up the agency.
Finally, we have started the process of winding down Fannie Mae and Freddie Mac and reforming the overall mortgage market.
We are implementing reform quickly but carefully, and we are taking public input at each step of the way. Because this is complicated work, and because it entails extensive coordination with multiple agencies around the world, some rules are being written more quickly than others. Where we need more time to get the substance right, we will take the time we need.
There is still a great deal of work to do to repair the damage caused by the crisis, and to implement the full framework of reforms. Ultimately, success will depend on making sure that we can write sensible rules that promote the health of the broader economy instead of the interests of individual firms -- and that those charged with enforcing these rules have the resources and the talented people they need to do their job.
As we move forward, however, many of those who fought reform during the legislative process are now trying to slow down and weaken rules, starve regulatory agencies of resources, and block nominations so that they can ultimately kill reform.
We will not let that happen. Too many Americans are still suffering from the pain of the financial crisis. We owe them a financial system with better protections against abuse and catastrophic risk. As secretary of the Treasury, I will recommend that the president veto any legislation passed by Congress that would undermine these vital financial protections.
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Boy will he ever eat those words one day very soon.
I couldn't believe trav777 couldn't believe you're really who you claim to be; dude's got no imagination?
i respect Trav and have enjoyed reading his insightful comments over the past year+.
Don't understand why some think I am a fraud (and really don't care).I try to be as straight forward and sincere in all of my commentary as possible.
I credit my older brother. If it were not for him, I would have never understood or give a damn about any of this stuff.
wasn't so much as a "fraud"... just couldn't get his head around the reality of a 20-yr-old female "silver stacker" lulz
not exactly par for the course.
I've known several extremely bright young Women who don't have their head in the clouds.
Keep it up; hat tip to your Brother.
Blythe... Are you going to pursue a career in ( Law, Finance, Medicine? ) Are you prepared for your Masters/Pre- Med/Law School? Your older Brother sounds like a GROUNDING influence in your life... Good on him!!!
Hopefully EVEN better on you!!! YEN
Never doubted her age or her gender.
From her comments you can clearly see that this is a young person speaking (no offense). And from the underlying emotions - there is a high probability that this is a young women.
It does not necessarily mean everything is true what she is posting here. Or that her avatar is a real image.
But why should it? I mean look around...
If you see what kind of reaction or posts are following her. Most comments are very insensitive. Nothing unusual though. Blythe is not here to meet her future husband or anything like that. Ha! That would be funny. The first ZH marriage...lol. She attracts those kind of comments of course. This is not necessarily her fault. A young woman, appearing to be good looking, speaking of serious things, stacking silver, knowing how to use a gun, not fearing to fulfill her duty.
She likes to have a tough appearance and seriousness in her comments and is not afraid to take a hit or two here. But there is also an underlying bitterness which is mixed with sadness or even resignation (desperation). This is also nothing special here on ZH. Wether you are from India, Germany or the United States...In a way we are all in the same boat. Corrupt, incompetent leaders...like Geithner (as a German it is sometimes funny to read those names - like Nancy Pfotenhauer)...
If you want to know more - ask Brothe....I mean Dr. Cog. ;-)
you're creeping me out with your attempts at cybering with some middle aged fat dude living in his mom's trailer.
Pfffff.... :P
you're creepin' me out with the concept.... hit my paranoia button. oh shit, could it be?? I've heard recently of creeps impersonating young women on blogs, etc., but surely not on ZH... or why not? whatever is the most unlikely scenario must be true? Or maybe...Or....NOT. Total FAIL jomama.
ps WTF are you.....really?
pps if I read right above re trav7777 "not par for the course" you mean he can't be fooled? Really smart guy, but so what...got his own prejudicial filters, too
[now, really...c'mon, you were just havin' a little fun with PY-129, right?]
dup....fuckin' server
Cisco to lay off 6500, due to growth miscalculation.
You may want to re-check those calculations. You are far too generous!!!
Timmay Jeethner Has the REVERSE Midas Touch
Everything Timmay touches... turns to shit...
The sure sign of a Rubinite protege...
Atta boy Timmay...
southwestern half is called Mexica
yeah the US is f&cked.....
"Dodd-Frank Has Made our Banks Stronger"
ROFLMAO!
"Dr. Timmy's Magical Snake Oil - Heals Bursitis, Consumption, and Impotence!"
Keep trying Timmy...
I think it's {HIGH TIME} Timmah and Ben hop on those two (single hulled ) CRUDE...
Tankers down yonder, Mexican Style....
One Man Raft O' Charts (times are tough guys/girls, no more boatloads for now)
Set your alerts tonight! DGII
If it breaks out (esp. if on good volume)I will go long. Good volume today, very good sign.
I'll be watching this one closely though, only 100k shares on average day, smaller than my preferred 400k volume preference.
Nice chart for a long.
http://oahutrading.blogspot.com/2011/07/trade-idea-dgii.html
As if increasing the reporting requirements for derivatives is going to make the system safer. Or pushing them all to exchange instead of OTC will somehow change them from being giant sinkholes of cash flow. At least insiders close to the CFTC will be able to insider trade off the information!
Yea I caught that B.S. regarding otc currency trading... Good luck FrankenDodd... 4trillion and growing...
Dodd-Frank is meaningless if it's not implemented. TG can brag about how great it is but he knows it's not being implemented on the TBTF banks, just the little fish.
He also knows the '00 decade was the biggest Fed pump-&-dump operation in history. It's so clear looking back how the Fed pumped and dumped the economy.
We're in the next pump-&-dump operation now. The pump phase.
People never learn.