Even with lots of worthless chatter coming out of the White House in the past 24 hours, one solitary fighter for "the common man" emerges in the form of Barney Frank. Whether this is due to the Congressman not getting a thick enough envelope endorsed and signed by the Big 5 banks, or not, we don't know yet. However, courtesy of our sources on the Hill, the latest development our of Washington is that Frank is trying to generate support for a Congressional bill that would allow only retail banks with a lending function to have Fed discount window access. While this is a brilliantly simple solution to see hedge funds, and for some reason Bank and Financial Holding Companies, like Goldman Sachs finally open up some retail depository branches, the response from Wall Street would be furious. Many banks still exist only courtesy of the last recourse short-term funding option that the discount window affords them. If the Big 18 are forced to lend, which is the prima facie reason for this bill, only to be able to fund their speculative gambling courtesy of zero percent cost of capital, then all bets will surely be off. Goldman without discount window access is the most ludicrous thing imaginable.
For once, and assuming this rumor is in fact true, we agree with Barney Frank.