Barney Frank

Econophile's picture

Until I began to examine the Dodd-Frank financial overhaul bill I had no idea that it would so significantly change the direction of the United States. It's scope is so vast and pervasive that it is difficult to grasp its totality. I wrote this article to try to explain this and why I believe it is so important for us to understand it. This is the final part of this four part series. I examine the consequences of Dodd-Frank.

Moody's Puts Too Big To Fail Banks On Outlook Negative Over Laughable Concerns Barney Frank May Just Let Them Fail

Ironically, Moody's whose own business model is now kaput courtesy of Donk (but managed to get a 6 month rolling SEC reprieve for the time being), has an unfavorable opinion on banks as a result of the just passed worst, and most corrupt legislature known to humankind. : "Moody's Investors Service today affirmed the long-term and short-term ratings of Bank of America (BAC), Citigroup (Citi), and Wells Fargo (WFC) while at the same time changing the outlook to negative from stable on their ratings that currently receive ratings uplift as a result of Moody's assumption of systemic support (including their senior debt and deposit ratings). The outlook change is prompted by the recent passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) -- a law that, over time, is expected to result in lower levels of government support for U.S. banks. "Since early 2009, Bank of America, Citigroup, and Wells Fargo's ratings have benefited from an unusual amount of support," said Sean Jones, Moody's Team Leader for North American Bank Ratings. This support has resulted in debt and deposit ratings that range from three to five notches higher than that indicated by the banks' unsupported, intrinsic financial strength. "The intent of Dodd-Frank is clearly to eliminate government -- i.e. taxpayer -- support to creditors," said Mr. Jones. To achieve this, the law attempts to strengthen the ability of regulators to resolve complex financial institutions, while at the same time strengthening the supervision and regulation of such institutions to reduce the likelihood that they will need to be resolved in the future."

Charlie Rangel Charged With Numerous Ethics Violations, Among Them Offshore Drilling Tax-Related Kickbacks

In the latest black eye to the democrats' midterm election chances, Charlie Rangle, the former chairman of the ways and means committee was charged with a plethora of ethics violations, confirming yet again that the phrase "honest politician" is just as oxymoronic as "Non-stripper-abusing Wall Street CEO." And while we will leave the politics aside, one of the charges is particularly interesting as it ties in closely with the recently popular topic of offshore drilling. Specifically, one of the allegations against Rangel is that he was guilty of: "Preservation of a tax shelter for an oil drilling company, Nabors Industries, which has a chief executive who donated money to the center while Rangel's committee considered the loophole legislation." It appears offshore drilling is not just a republican provenance. If NBR is about to be exposed for a kickback scheme with one of the (allegedly) most "ethically violated" politicians, one wonders just what a detailed investigation into any very probable comparable corruption schemes by BP, DO, HAL, APC and others would reveal and just how far the trail of Corexit-laden corruption would lead.

Did The Credit Agencies Just Go Extinct?

The recently passed Donk (Dodd-Frank) Finreg abomination, which nobody has yet read is finally starting to disclose some of the interesting side effects of its harried passage. Such as that the rating agencies may have suddenly become extinct. As the WSJ's Anusha Shrivastava discloses: "The nation's three dominant credit-ratings providers have made an urgent new request of their clients: Please don't use our credit ratings." The Moodies of the world suddenly have good reason to not want their name appearing next to those three A letters (at least in Goldman CDO and bankrupt sovereign cases) out there: "The new law will make ratings firms liable for the quality of their
ratings decisions, effective immediately." In other words, "advice by the services will be considered "expert" if used in formal documents filed with the Securities and Exchange Commission. That definition would make them legally liable for their work, meaning that it will be easier to sue an firm if a bond doesn't perform up to the stated rating." And since ratings are officially a part of a vast majority of Reg-S filed documentation, the response by issuers has been a complete standstill in new issuance, especially asset-backed underwriting and non-144A high yield issues, as the raters evaluate how to proceed. Alas, as there is no easy fix, underwriters' counsel and issuers will promptly uncover new loopholes and ways  to issue bonds without the rating agencies' participation. Did Moody's and S&P just become extinct?

Barney Frank Removes Bank Fee Provision From FinReg To Weasel Enough Votes

Surprised? Don't be. The congressman from Fannie Mae is only doing what is in his best interest. Not in that of America, mind you. But his own? Absolutely. Presumably the bill will now have enough votes to pass. Barney also saying TARP funds, so generously provided originally by taxpayers, will be used to fill funding holes instead. End result: B.F. and Wall Street 1; America, and highly intelligent electorate who votes Frank into office year after year 0.

Barney Frank Brings Additional Unclarity On The FinReg Scam, Punts Again On All Fannie/Freddie Questions

In case you just can't get enough of of Barney Frank simply oozing truth, integrity and unbribable honesty (in other words, everything that defines the American Congressional way) in every interview he does, this Bloomberg TV clip is for you. It is also for everyone else who would rather not read the 2,000 pages of FinReg reform yet wants to get some sense if they will be sued next Monday for lifting a 5MM offer of UK CDS. Overall, Barney mumbles about this and that, discusses whether the bill will make banks less profitable (it won't), clarifies the 3% loophole for JPMorgan's investment in Highbridge,  notes the surprising $19 billion bank levy, yet runs like a scolded schoolgirl the second Fannie and Freddie (also known as the one biggest disaster of his career, and the only thing he will be remembered for) are mentioned. "My Republican colleagues like to forget the fact that during the 12 years they controlled Congress, they did nothing about Fannie Mae and Freddie Mac. When the Democrats took power in 2007, we passed a bill that gave them the power to put them into conservatorship. Fannie Mae and Freddie Mac today are not what they were, thanks to a bill passed by a Democratic congress…They are in conservatorship. The notion that we haven't done anything is a lie, and they know that." The more important thing Barney, is that the American are fully aware that any pretense of reform coming from you is a lie, and they most certainly know that.

Finally The Farce That Is Fin Reg Reform Passes And Wall Street Can Resume Its Rapid March To Financial Armageddon

As if anyone thought otherwise, the final shape of finreg has now been formalized and as Shahien Nasiripour at the Huffington Post notes, "many of the measures that offered the greatest chances to fundamentally reshape how the Street conducts business have been struck out, weakened, or rendered irrelevant." Congrats, middle class, once again you get raped by Wall Street, which is off to the races to yet again rapidly blow itself up courtesy of 30x leverage, unlimited discount window usage, trillions in excess reserves, quadrillions in unregulated derivatives, a TBTF framework that has been untouched and will need a rescue in under a year, non-existent accounting rules, a culture of unmitigated greed, and all of Congress and Senate on its payroll. And, sorry, you can't even vote some of the idiots that passed this garbage out: after all there is a retiring lame duck in charge of it all. We can only hope his annual Wall Street (i.e. taxpayer funded) annuity will satisfy his conscience for destroying any hope America could have of a credible financial system.

Barney Frank Wants To Have Banks And Hedge Funds Pay For Assistance For Homeless Jobless; Fund Next Stimulus

Just out from Reuters: Barney Frank has introduced the Frank Bank Levy Proposal, which would tax banks with more than $50 billion in assets, and hedge funds with more than $10 billion, and use the money to fund $4 billion for neighborhood assistance and foreclosure help for the jobless with good credit. In other words, big banks and hedge funds will be funding Obama's next stimulus for his core constituency.

Watch Barney Frank's Conference To Preserve Fed Secrecy, Live And Lobby-Free Here

Members of the
House-Senate Conference Committee on financial regulation are meeting
for a third day of deliberations on the Restoring American Financial
Stability Act of 2010. As part of the offered modification language which we discussed yesterday, the Committee today will focus to do all it can to eliminate any and every Fed-unwelcome initiative as part of the audit the Fed provision in the Congressional version of the Fin Reg bill. All those who want to see how corrupt politicians destroy any chance of fair and effective financial regulation are encouraged to tune in and focus their attention on Barney Frank.

C-Span Link Here