9/26/2012 3:19 PM ET|
How Obama failed to rein in Wall St.
Commentary: The financial sector is more influential and dangerous than ever, thanks to the president's poor choices and advisers.
If you plan to vote for President Barack Obama this fall, you have plenty of reasons: foreign policy strides, a health care overhaul, the auto industry rescue and women's rights, to name a few.
Others of a different political persuasion may not agree. They might argue the president's efforts in these areas were misguided and wrongheaded. But there's no denying the Obama administration actually did something to address each of these issues.
You don't need to ask the fact checkers, though, to know the president has done very little to rein in Wall Street. If anything, he made a bad situation worse.
Of course, that hasn't stopped the Obama campaign from claiming financial reform as one of the major accomplishments of the president's four years in office.
Asked about that claim, the president's re-election team cites some effective-sounding legislation: The Dodd-Frank Wall Street Reform and Consumer Protection Act and, as part of that law, the creation of the Consumer Financial Protection Bureau.
The CFPB may turn out to be a worthy foil to big finance, but at just a year old, the bureau doesn't have the track record to make a fair judgment.
Unlike the CFPB, it's not too early to say Dodd-Frank has turned out to be a tangled mess.
In the more than two years since it was signed into law, there have been 237 rule-making deadlines. Of those, 145 rules remained overdue as of Sept. 4, and only 33% of the law's requirements of the law have been implemented, according to law firm Davis Polk & Wardwell.
Sure, obstructionists in Congress who have held up funding and rule-making are partly to blame. But the administration should have seen this coming.
Instead of returning to the 37-page simplicity of the Glass-Steagall Act, Democratic lawmakers pushed through an 849-page measure aimed at regulating every business, every transaction on Wall Street.
Dodd-Frank has served only to fatten law firms and compliance consultants. It has created almost no effective safeguards against modern risk, such as the trading of "hedges" of the sort that cost JPMorgan Chase (JPM) more than $5 billion in losses and put taxpayers and depositors at risk.
Nor does the law offer any sort of preventative medicine against companies such as Jon Corzine's MF Global, which filed for bankruptcy 11 months ago after losing $2 billion in customer cash.
In short, Wall Street regulation has left us essentially as vulnerable as we were under any previous administration. The only difference is that the too-big-to-fail banks are bigger and more concentrated than ever.
Two institutions alone, JPMorgan and Bank of America (BAC), have swallowed four huge financial companies: Bear Stearns, Washington Mutual, Countrywide Financial and Merrill Lynch.
The only institution capable of limiting Wall Street's influence is the federal government. But the Obama administration has embraced bankers or bank-friendly officials in government.
They include William Daley, the president's chief of staff, who joined from JPMorgan. One of his first statements was to say that when it comes to pushing for jail time for Wall Street CEOs, "politicians should not get involved."
Obama also hired Lawrence Summers, whose record in the Clinton years included killing derivatives regulation, lowering capital-gains taxes and repealing Glass-Steagall.
Of course, one of Obama's first appointments was Timothy Geithner, the Treasury secretary, who had a record of spending far more time dining with Wall Street CEOs than the customers of their banks.
With a team like that, it's no wonder Obama blew a once-in-a-generation chance at strengthening the financial system.
With the pain of a stock-market plunge, double-digit unemployment and lost wealth still fresh in the American consciousness, Obama pursued his social and political agenda -- health care, Iraq, an economic stimulus bill -- and left finance to the finance guys.
Had he pushed harder to save borrowers who lost their homes to the banks -- there have been 3.4 million completed foreclosures and an additional 1.49 million in the process -- Obama might have not only won more votes, but also helped the economy.
So, if you're going to vote for Obama, don't do it because he cleaned up Wall Street. If anything, it's more influential and more dangerous than ever before.
VIDEO ON MSN MONEY
"Thanks to legislation like Glass Steagall, the depression was prolonged and prevented from clearing out all the dead wood. The right response is to LET THEM FAIL AND LIQUIDATE THE SYSTEM."
Glass Steagall separated banking from insurance from investment. It was passed in 1932. From 1930 to 1936, America saw 50,000 banks go out of business. Financiers jumped out windows in October 1929, but many fortunes went bust by 1937. We didn't bail any banks out and clever companies like HFC actually worked with customers and survived the ordeal better for all they did WITH people. Seems to me, the dead wood- went. Here and now, Hank Paulsen, former Secretary of Treasury and former CEO of Goldman Sachs will go down in history as the man who single-handedly made the wrong decision at the wrong time and propelled America and then the globe to an agonizing prolonged death.
I'm a lot better at reading learning and learning from history than Ben Bernanke, by a long shot.
Who the hell would vote for Obama? But then again, who the hell would vote for Romney....not much difference there as usual. Too bad most people have their heads buried in the sand and can't grasp the reality and severity of what is happening. Too bad Ron Paul didn't get more support before the powers that be "kick the can" farther down the road and threaten all of our livelihoods.
The Middle Class is dying and dying FAST! The Middle Class should be on FULL ALERT! If you are not yet rich but are interested in creating a comfortable financial security for yourself and your family then you must be ready...Ready to confront new realities...Ready to take a new level of action...The Middle Class of old was built on inspiration, financial safety and security.
Today...the Middle Class is a place of uncertainty, insecurity, fear and attempts at holding on with very little results...You must earn your way out of this..you must take the right actions...you must change your thinking NOW...It's no secret that the middle class is rapidly disappearing. NOW you get to choose which side of this massive transfer of wealth you wish to be on.
You can either complain about it or profit from it. What if you could obtain shares in start-ups like a company as big as Facebook that go IPO and/or obtain shares in companies that will be sold off for 12+ times their current valuation LONG before anyone else?
Wouldn't that be an easier way to make your millions than to slave away at a JOB for 5 or more days per week over the course of a few decades?
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I have a proprietary platform to help us make any start-up company a household name within a very short period of time (around 90 days), but I need promotion help to make that happen. In exchange, you will become an equity partner and profit accordingly. We have created this opportunity to help the average Joe retire wealthy by providing a simple, but needed service for the little guys out there....the small businesses where innovation happens.
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Qualified applicants will be able to sign a Non-Disclosure Agreement to see all the confidential details. Just thought I'd share an easier way to getting your rightful share of the pie, unless of course you think the government is going to save you.
Quick... write America a check for $800 BILLION to repay us for TARP.
You obviously have ZERO exposure or experience in credit or finance. FOR A FACT, 100% of all legislation (except the Gramm Leach Bliley Act) was written in order to stop some sort of abuse. It's our currency and the life blood of our economy. It needs to be fully segregated, fully regulated and fully supervised. yes, moron... as much government oversight as is needed. Gramm Leach Bliley gave power to the banks to make their own decisions. We are here. The nation has been destroyed by banks. Time to close the banks, flush bankers out of the country with only the clothes on their backs, change the currency and recover the nation. When we do, America will need Personal Protection Orders to keep idiots like you from getting anywhere near our recovery. You only know what crock jock radio tells you to know.
"I was approved for a loan,but i looked at the terms and figured i couldn't make the payment,While others i met accepted the loan.Even though they couldn't keep up with the payments.I worked with people that told me stories of the loan officers putting down that they made more money than they did. The prices of homes don't match wages.I don't see myself ever buying a house."
Horrific grammar-- I'm not here to fix it for you but I did. Ever since the passing of the Gramm Leach Bliley Act in 1999, loan sharking has been legal by default (the Act prohibits regulatory control in the financial sector). Nearly 100% of bank competitors in the open market were destroyed when banks pulled credit facilities in late 1998. YOU figure out what's wrong here. All these moves can be traced to Republicans. You gave the lender your verifications, it was their job to do proper diligence and offer only products the borrower has the Ability to Pay for and on.
Republicans can't handle other people's money or finance without destroying it.
Where on Earth did you get that stupidity from? One guy is lending money, one guy wants to borrow it. You are saying the guy with the money should just hand it over and if the other guy doesn't pay it back- we should spend money to go after him? I think the 99% of the people worldwide want to test your theory. Let's line up all the wealthy people in the world, have them write checks to the rest of us, then they can come after us to get it back. You never use your head before you post.
"Look this problem was caused by excessive speculation in Real Estate. Borrowed money is always involved in speculation. If you want to fix the problem, I can give you a simple rule that will fix it... Wait for it.... No BANK can make a mortgage loan without 25% down. NO exceptions."
"Excessive speculation in Real Estate" can be directly traced to the Tax Reform Act of 1986, again written by Republicans and passed during a Republican majority in Congress. The next day after it passed our homes became investment vessels and hyper-appreciation began. FACTUAL (not Mirage Guy facts) DATA can demonstrate a specific timeline validation for hyper and a straight line stable appreciation before it.
The threshold for Private Mortgage Insurance is 20% down, not 25%, insurance can cover that 25% in higher risk scenarios. There are actually all kinds of ways to get around it and many are solid and stable... unless banks are doing them, then they will be exploited and deviated until they become volatile. A reminder that major banks failed and were bailed FIVE TIMES during the 20th Century alone.
The lender need only try to manage his risk adjusted return. If he wants to take on big risks, then he should be allowed to fail when it goes belly up.
BUT NO --- Idiots are calling for more government protection of the lenders. AND THAT IS EXACTLY WHAT YOU DO WITH THE FDIC. The depositors are the lenders. If they are protected, management is protected. DO YOU GET IT YET ? !!
"Instead of returning to the 37-page simplicity of the , Democratic lawmakers pushed through an 849-page measure aimed at regulating every business, every transaction on Wall Street." Glass-Steagall served us well for more than 60 years. If it had not been repealed and if regulators had just done their jobs, there would have been no financial meltdown in 2008. Look for another major crisis if the TBTF banks are not broken up. Greed has no party affiliation."
Not sure what 849 page "Democrat-written" measure you are referring to. Glass Steagall was suppressed down by the Gramm Leach Bliley Act in 1999. the piece of garbage legislation was slipped into another Bill to get passed. All the authors of it are Republicans. Phil Gramm, the primary author- was hired by UBS Bank after his term. When asked about how his Act had been a major factor in the collapse of America... Phil Gramm called us all "whiners".
Phil Gramm and all Republicans are anti-Americans. It's time to fight to restore our nation from these terrorists.
So what you are saying is-- the people who signed the paper are crooks, but the people who made the paper and had the money and had the opportunity to make sure the signer could afford the loan is- not the crook? You are an idiot.
Our government has been taken over and the globalist using the Zealous governing bodies in our government as puppets assisted by the media controlled outlets is to mold a global collapse (FROM KAOS THEIR WILL BE ORDER) The new world order creed.......But first start the Kaos by destabilizing: Europe, Africa, the entire Middle East and the United States of America which is now a PUPPET STATE under those FRONT MEN'S control....Israeli Government officials and those strung out throughout Europe and the USA are at the heart of the demonic possession......while 40 % of Israelis want the OCCUPATION OF PALESTINE TO END .......You will not see that in the media.....They know that Iran , Syria Lebanon ,Egypt , Lybia , Tunisia, Sudan, and Hamas have to be under control or defeated in order to get to Iran and to Russia and China.....By in sighting internal conflict and false flag events as they are doing so in the United States by using KAOS, FEAR and EXTERMINATION is the name of the game as they institute regime change......by arming so called insurgents first ..killing millions creating new daily body counts that has now surpass the european HOLOCAUST of all faiths in WW2 all innocent people that just wanted to live freely. To many of our brother and sisters have died and will continue to die.....Until we say NO MORE.... and stand up to these ZAELOUS thugs and their Globalist human hating and control agendas....!!!
Of course it is... The imbecile '57 States' and his donkeys are clueless...
Look this problem was caused by excessive speculation in Real Estate. Borrowed money is always involved in speculation. If you want to fix the problem, I can give you a simple rule that will fix it...
Wait for it....
No BANK can make a mortgage loan without 25% down. NO exceptions.
Like the stock market market rule of 50% ended the potential for collapse. Had this rule been in place we would never have had a real estate bubble or melt down. FDR put the stock market margin rule in place to insure no future meltdowns. Of course the liberals oppose this. So Dodd/Frank does nothing to prevent future meltdowns. It also does nothing to prevent financial swindlers from serving no time, Jon Corzine is a perfect example. A guy who authorized the looting of customer accounts, and because he is a democrat and Obama supporter he is free...
Sorry, but if you want to rein in Wall Street, start with Margin requirements. And on commodities too...
November cannot get here soon enough.... Our current President, is Lazy, Corrupt, and Stupid...
"Instead of returning to the 37-page simplicity of the , Democratic lawmakers pushed through an 849-page measure aimed at regulating every business, every transaction on Wall Street."
Glass-Steagall served us well for more than 60 years. If it had not been repealed and if regulators had just done their jobs, there would have been no financial meltdown in 2008. Look for another major crisis if the TBTF banks are not broken up. Greed has no party affiliation.
"J.P. Morgan holds over 70 TRILLION dollars worth of derivatives and as they lose these bets, they simply get more free money from the Fed (see QE-1,2, & 3). These banksters then kick back to the politicians in the form of "campaign contributions". What it is, is a criminal operation, is BO involved..."
Thank you for referring to them as banksters. It's the truth. Obama isn't involved he's the opposite. They control too much and the majority was put in place long before Obama got elected. The Gramm Leach Bliley Act and Tax Reform Act- both authored by GOP, fully work to give banks a de-regulated irresponsible legalized collusion advantage over the rest of us. If it took decades of corruption to build this machine, how did you expect ONE MAN in FOUR YEARS with massive opposition to-- fix it?
The change is going to hurt people like you the most. You failed to learn anything and believe people you listen to on the radio. Who do you think sponsored them? It isn't Obama but it very well could be Romney. He donated millions to 501(c)(4) charities-- that turn out to be shill shells owned by the Koches and Karl Rove.
Indeed, QE hasn't worked. The Boards of Directors for the Federal Reserve are the likes of Jamie Dimon... he's the CEO of JPM Chase! Know who the REAL enemy is. It isn't President Obama. Never was. But if you have zillions stolen from the economy and a knack for corruption, you can easily mesmerize the dim-witted to believe he's the Devil.
BTW... the total global currencies including derivative contracts (a JPM Chase invention) comes to at least $1 quadrillion. As for graft and kick backs going to Congress, a Democrat named Levin had to draft legislation to rein in 'extraordinary gains' by GOP in Congress using Insider Information to bolster their own wealth. Haley Barbour has already admitted that extreme wealth gave each GOP member in an elected Office $5 million in an offshore account for their "loyalty". You are mighty far from knowing who the enemy is, my friend... but if you look in the mirror you'll know him right away.
"Start of the end - Ending of GLASS-STEAGALL Act in 1999 started in 1933. Does anyone see the reason for this in 1933? Go back and read history."
Glass Steagall didn't END. It was suppressed by the Gramm Leach Bliley Act. All we need is to effectively RESTORE Glass Steagall without the Party of NO to interfere and force language in it that weakens it's great strength. Say what you will about divide in Congress, but no group has been as lethal to ALL Americans as the fully funded by corruption- GOP. No Tea and no Republican need re-apply for their roles. If either of these two parties wishes a future voice in America, it needs to take down it's own bad characters NOW by voting them OUT. I truly believe there are people with better ethics and the heartful desire to help America. THESE need to be in Office, not those who sell their souls for the MILLIONS in now takes just to compete and campaign.
Start of the end -
Ending of GLASS-STEGALL Act in 1999 started in 1933.
Does anyone see the reason for this in 1933?
Go back and read history.
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