Wall Street Seeks to Tuck Dodd-Frank Changes in Budget Bill

yet...

Ahh... methinks you don't quite understand what part of Dodd Frank was repealed in the Cromnibus spending bill.
Look into the "Prohibition Against Federal Government Bailouts of Swaps Entities"

This regulation was put in place to prevent bailouts of too-big-too fail banks in the future. It does not allow banks to engage directly in the kind of extraordinarily risky transactions that caused the 2008 financial melt down. It requires these large entities to set up special segregated subsidiaries if they want to gamble in these risky financial instruments. This would insulate the parent bank ( government regulated, depositor financed banks ) if the bets go bad

If/when the Senate votes this provision will be gone and the rest of Dodd Frank remains.

Why? Because regulation is evil.
Apparently the FDIC protection is not evil.
Just the regulations that go along with the benefit are evil.

So which is it justlikethat?
Is regulation or tax payer supported bail out more evil to you?

You happy the cromnibus spending bill does away with this regulation?
Or, as you say, do you "not want the government bailing out private businesses in the first place?"

Not liking the portion of Dodd Frank affected by the cromnibus spending bill, but not wanting bailouts is totally contradictory.

I guess the tribal leaders have not yet communicated why one who hates bailouts should support the repeal of this portion of Dodd Frank.
Give them time. I'm sure the talking points will be on Fox News by Monday.

max

 

Dodd and Frank. Two thieves who made $$$$ off the collapse via Countrywide. What great Americans.

 

THEY CAN'T DO THAT BECAUSE THE VOLCKER RULE PROHIBITS IT, GET THIS THROUGH YOUR PARTISAN SKULL. Any condescenscion in your case is well-deserved. Saying again, I've read your posts and threads here on PF.

 

Lol! Still going to ignore the questions that I ask ? And I thought you were the expert. Lol! And, the Volker Rule is useless if a bill is introduced, which it has been, that renders it useless if finally passed with the provisions Citigroup wants. Of which, you had the chance to prove me wrong by virtue of the spending bill written by Citigroup ( OUR NEW GOVERNMENT), which you did not, while calling Warren dishonest. You haven't proven that one either. Any condescension needs to be in reverse form if you will not or cannot account for questions and proof I asked for. Just making claims about the Volker Rule and what's in it is useless talk, while Citigroup is trying to change that rule through a spending bill. How hard is that for you to get that through your PARTISAN SKULL?

 

No surprise. For it was the republicans who led to deregulating the banksters in the first place. They think that the banksters should write their own rules to obey. Which turned a sound banking system into casinos, using the public's money. The republican party concocted free trade, devastating the middle class and they deregulated banking, after those same regulations kept us from crashing for a long time. The repubs know how to crash economies, and devastate the middle class, as their rich constituents scoop up 60 percent of the middle classes income, since they came back in 1981.

That working americans and the middle class vote against their own best self interest by voting in republicans is the icing on this (*)(*)(*)(*) cake. To get a people to do that is the absurdity here, not that repubs never represented the average American. The average American is so easily fooled, and even easier than fooling the village idiot. Even the village idiot knows the difference between a round pill of rabbit dung, and a smart pill. But republican voters bought that rabbit dung and ate it, after being told it was a smart pill. The surreal absurdity of a people voting against their own best self interest is astounding.

 

This is simply not true. The Volcker Rule is about prop trading. (proprietary trading -- you should read up on that)
Think about it, if the Volcker Rule prohibited banks from swaps, why would the industry lobby so hard to remove The Prohibition Against Federal Government Bailouts of Swaps Entities.

The Volker rule does not prohibit banks from investing their depositor's $ in high risk vehicles. As I understand it, the Volcker rule prohibits banks from investing when it is not at the benefit of it's customer and specifically from acquiring or retaining any equity, partnership, or other ownership interest in or sponsor a hedge fund or a private equity fund.

Here's a link to the wording of the Volcker Rule, aka U.S. Code § 1851 - Prohibitions on proprietary trading and certain relationships with hedge funds and private equity funds

http://www.law.cornell.edu/uscode/text/12/1851

This is a very different thing than a requirement that a bank must spin off as a separate division any swap entity.

max

 

Two simple questions, could the government have decided against the bailouts in 2008, and was Dodd/Frank implemented back then?

 

How can you be so adamant, when you area so clearly wrong???

...and btw...I believe there are more than just a few of us that trust Elizabeth Warren's analysis as opposed to yours. You can understand why that would be the case, don't you?

 

Legislative changes 1992[edit]
Although minor amendments were made directly to the Community Reinvestment Act concerning the consideration of minority and female owned institutions & partnerships during evaluations first established in 1991, other portions of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 indirectly affected the CRA practices at the time in requiring Fannie Mae and Freddie Mac, the two government sponsored enterprises that purchase and securitize mortgages, to devote a percentage of their lending to support affordable housing.

Regulatory changes 1995[edit]
In July 1993, President Bill Clinton asked regulators to reform the CRA in order to make examinations more consistent, clarify performance standards, and reduce cost and compliance burden.[51] Robert Rubin, the Assistant to the President for Economic Policy, under President Clinton, explained that this was in line with President Clinton's strategy to "deal with the problems of the inner city and distressed rural communities". Discussing the reasons for the Clinton administration's proposal to strengthen the CRA and further reduce red-lining, Lloyd Bentsen, Secretary of the Treasury at that time, affirmed his belief that availability of credit should not depend on where a person lives, "The only thing that ought to matter on a loan application is whether or not you can pay it back, not where you live." Bentsen said that the proposed changes would "make it easier for lenders to show how they're complying with the Community Reinvestment Act", and "cut back a lot of the paperwork and the cost on small business loans".[36]

By early 1995, the proposed CRA regulations were substantially revised to address criticisms that the regulations, and the agencies' implementation of them through the examination process to date, were too process-oriented, burdensome, and not sufficiently focused on actual results.[52] The CRA examination process itself was reformed to incorporate the pending changes.[40] Information about banking institutions' CRA ratings was made available via web page for public review as well.[36] The Office of the Comptroller of the Currency (OCC) also moved to revise its regulation structure allowing lenders subject to the CRA to claim community development loan credits for loans made to help finance the environmental cleanup or redevelopment of industrial sites when it was part of an effort to revitalize the low- and moderate-income community where the site was located.[53]

During one of the Congressional hearings addressing the proposed changes in 1995, William A. Niskanen, chair of the Cato Institute, criticized both the 1993 and 1994 sets of proposals for political favoritism in allocating credit, for micromanagement by regulators and for the lack of assurances that banks would not be expected to operate at a loss to achieve CRA compliance. He predicted the proposed changes would be very costly to the economy and the banking system in general. Niskanen believed that the primary long term effect would be an artificial contraction of the banking system. Niskanen recommended Congress repeal the Act.


I can't believe you would call someone ignorant and at the same time claim the ACA was never changed or that it didn't affect lenders by forcing them to sell sub-prime paper.

Open mouth insert foot.

 

Lol! You never read the whole link I posted. Freddie and Fannie had a very small part in the overall collapse. It wasn't until 2006 when they eventually had a small stake in the game. Which by that time it was too late. So posting up minor amendments back in the 90's, never figured in to having any significance in the overall collapse of 2008. You are short on gathering information that has any relevance during the time frame when it really matterd.

 

The problem is not in your facts, but in your faith in Wall Street abiding by the rules. With all of your blustering about how The Volker Rule would prevent what the repealed provision in Dodd/Frank is/was implemented to do, you really never questioned how snake-like Wall Street is apt to be and how they have more often than not, slithered around rules and regulations. You should have poked around a bit more before having such blind faith in the gamblers of OPM....

http://www.forbes.com/sites/stevedenning/2013/12/13/the-volcker-rule-makes-us-safer-but-not-safe/

http://dealbook.nytimes.com/2013/12...ss-to-ban-a-single-wall-street-activity/?_r=0

 

Doncha love it when their own links... that they obviously didn't take the time to read carefully, say things like this:

The regulatory fallacy
If we dig deeper into what’s going wrong here, we can see an illusory faith in regulations to solve these kinds of problems. As analyst Lance Brofman wrote in September 2013:
“To determine if someone is an adherent of the regulatory fallacy, ask this question: … was there any type of regulatory policy which would have prevented the financial crisis and subsequent depression? If they answer yes, they are adherents to the regulatory fallacy.”

Um, the Forbes writer wasn't suggesting that more regulations are needed to make us safe. Quaint that you just read the title and thought that.

As usual, the NYT bias is palpable in their hideously spun Deal Book Article.

 

It is true. Proprietary trading doesn't mean what you and the source you claimed as your own knowledge does. Proprietary trading is everything other than hedging and market making for customers or speculating for customers, in other words ALL speculative trading by a FDIC bank. The Volcker Rule also has a treasury trading carveout. I can't keep track of all these threads, but read the following if I haven't linked it in this one:

http://bipartisanpolicy.org/press-r...s-alternative-plan-implementing-volcker-rule/

Here's your position, or rather someone else's position that you posted pieces of here as your own, with which I disagree:

http://www.nextnewdeal.net/rortybom...g-lincoln-amendment-critical-financial-reform

you should read up on that indeed.

 

Another hilarious thing, sorry if it has already been mentioned, further research uncovers that this very bill that Fauxcahontas is making a row over passed the financial services committee by a vote of 53-6 in 2013... 27 Democrats are on the committee, lol. Obviously this is all just smoke signals and mirrors from ignorant Fauxca.

https://www.congress.gov/113/crpt/hrpt229/CRPT-113hrpt229-pt1.pdf

 

No, the government could not have decided against bailout back then.
You call it a bail out, but there's this thing called the FDIC. It insured depositer's money. Up to $100,000 per despositer
Do you get how many banks failed between 2007 and 2009?
This is why Dodd Frank came to be. So no, it wasn't around.
How does this answer my questions?

Bail out is this really powerful word to the right.
Apparently regulation is even worse.

Well I got news for you.
If we're going to insure deposits up to $100,000 than you are going to play by some rules.

But again.... You didn't answer my questions.
I answered both of yours. ^^

Are you happy the Cromnibus eliminated the portion of Dodd Frank the separated swaps entities from banking deposits.
Why?
And how is this consistent with your mantra of bail outs are bad when a thing called the FDIC is in place.

Please explain.

max

 

Proprietary trading is trading that occurs with a firm's own money, not deposits of the commercial bank.
It deals with a completely different aspect of trading than the prohibition of Swaps Entity bailouts.

Come back when you can talk about it rather than post links you don't understand.

max

 

No, he's got plenty of problems with fact, too. For one, he doesn't understand the Volcker Rule.
max

 

I was being diplomatic based upon assuming that the poster actually believed that the Volcker Rule would negate the necessity of keeping Dodd/Frank intact. When all is said and done, I cannot for the life of me understand why some of these naysayers have a deep-seated need to discredit Warren, who knows a helluva lot more on the issue than anyone else, as if she was one of the bad guys.

 

You are the one who doesn't understand, went out and found a link to a blog and then repeated it here without citation as your own thinking, that was transparent. Read the GD Bipartisan Report for an accurate definition of proprietary trading.

 

Look, I can tell you aren't used to running up against people who actually know this stuff enough to explain it in their own words. Which is what I've done. I've explained, without link, why you are full of (*)(*)(*)(*). You want to comeback at that, then explain how the Volcker rule negates the need for the prohibition against Swaps Entity bailouts. Again -- in your own words -- no links. Anything less than that and your just trying to save face.

I said it when I meant it. Come back when you actually understand what you are trying to moan about.

max

 

Thank you! That has been the point all along. But they choose to hide behind rules and amendments in the present tense, as if those things will continue to save the day and never change. What a joke. They have a Republican controlled Congress and a Republican controlled Senate that will be in charge in January. That's when the Easter Bunny will never be seen again by those who believe in it. All it takes is a little time, and everything that was accomplished will be gutted once again, for the sake of big money.

 

The right only blames the least weathly for being "lazy" instead of getting a bailout and keeping their bonuses.

 

Oh yes, that is all the right does

 

They seemed to have lost the ability to come up with better solutions at lower cost; i sometimes start to wonder if it is a form of reverse-evolution.

 

It's about perpetuating a govt-edu-union-contractor-grantee-MSM complex lie narrative on the mortgage collapse of 2008 and rabble rousing with that lie narrative, nothing more. Proprietary trading, derivatives, credit rating agencies, securitization, replacement of Glass Steagall by Gramm Leech Bliley, greedy Wall Street itself... none of these were material factors in the mortgage collapse of 2008 ("MC"). So what -were- the causes?

My opinions and factual analysis on this issue come from being a stockbroker with the most prestigious firm in the country selling various mortgage based securities in the mid 80s-mid 90s, a banker at one of the largest banks in the country mid-late 90s, and a financial lawyer working for an elite Wall Street firm in the early 2000s that was the top securitization law firm at the time, in solo practice in business and transactional law today. The actual causes of the MC are:

1. Government meddling in the mortgage markets for decades, most of the 20th century, by way of insurance, interest deductions, other policy and loan programs, FHA, HUD, quasi federal entities FNMA, FMAC, etc. The government has NO PLACE AT ALL in the mortgage market, but politicians, like flies to honey, can't help themselves. The window dressing is "everyone should own a home, it's the American Dream! so we will make it easier." The actuality is "False stimulus of the housing market, which ties into almost every consumer market in the US, gives the illusion of a naturally growing economy that keeps ME in office." This factor alone would have dictated a blowoff top and crash in the mortgage markets. This happens whenever a market is falsely stimulated and bolstered over time, severe crash is inevitable. History is replete with examples. The government was like a crack dealer for 80 years and the economy the addict. It took decades for the crash to come, but when it did, it was big. EVERY OTHER FACTOR IN THE MC WAS A MINOR, TANGENTIAL ONE, oily rags to this factor's gasoline and matches. This one is the biggie.

2. Unwise consolidation of the financial industry at all levels during the Reagan through Obama administrations, but MOSTLY in the Clinton Administration, the flouting of our basic antitrust laws. As an aside here to all the lefties who think regulations are panaceas, they AREN'T, and have ANY EFFECT only to the extent that they are ENFORCED. These are the laws that break up monopolies, oversee mergers, penalize unfair trade practices due to being big. THESE ARE THE LAWS THAT WARREN SAYS SHOULD BREAK UP CITIGROUP, yet the memory is so short SHE DOESN'T KNOW WHY CITIGROUP IS SO LARGE, and how HER party and HER government allowed that to happen.

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

Yet these are the laws that were FLOUTED by Clinton and others, allowed the unwise consolidation of banks in the late 80s-2000s. Guess what? The Clintons are stinking rich today. Guess why? speaking fees and book sales. Guess who pays most of those? THE F-ING FINANCIAL INDUSTRY. Quid Pro Quo? Who knows? The "Complex" doesn't seem to care much about brown bags like that, wonder why? As those banks consolidated into megabanks, several things occured, for our purposes the centralization of credit committees as opposed to local, becoming too big to fail, and the conversion of many FIDUCIARY type local banks into parts of a PROFIT DRIVEN behemoth are most important. Young, freshly minted MBAs replaced old local grayhairs. The MBAs were profit driven, the old gray hairs knew they shouldn't loan to Lester despite his high credit score because he's a degenerate gambler.

http://en.wikipedia.org/wiki/First_Union_Corporation (80-90 Mergers?!?)

http://en.wikipedia.org/wiki/NationsBank (I don't see a number here, but likely not much less than First Union, so 150+ mergers?! Just in these two banks?)

Let's be crystal, crystal clear here. The REGULATIONS that could have prevented this unwise consolidation WEREN'T "DEREGULATED," THEY SIMPLY WEREN'T ENFORCED as a function of executive branch discretion, not the GOP or Democrats, but OUR GOVERNMENT selling graft and suspending perfectly good regulations. LOOKING THE OTHER WAY. Also, don't believe any partisan spin on this either. It did happen mostly in the Clinton Admin, but Govt at large at all levels was benefitting and in on it.

Also of note is that at this time, a meaningful tangent for this thread topic, but not the MC, Brooksley Born almost BEGGED to regulate the derivatives market under the CFTC. SHE WAS DENIED:

http://en.wikipedia.org/wiki/Brooksley_Born (use this link to get the facts only, as many wiki pages are, this one is highly left biased in several ways... it was GOVT making shady money off of being lax on regulations, not the GOP or Democrats, free marketeers v keynesians, but Government at large) The upshot on this aside is that while the left is always talking about utterly irrelevant Glass Steagall, it's own administrations were getting RICH by not putting regulations in place WHEN THEY MIGHT HAVE HELPED SOME.

3. The government began expanding prior legislation into bully pulpits and threats on "equality in lending" during the Clinton Administration. The EEOC was in its irrational, overbearing heyday, and the Clinton Administration began brandishing CRA like a club. "Here's your CRA quota or you will be investigated, prevented from any further mergers, SHUT DOWN, FINED IN THE BILLIONS.

http://en.wikipedia.org/wiki/Community_Reinvestment_Act (once again, use wiki articles for the facts and facts alone, there is lots of slant in them, usually leftist, sometimes RW).

Now, to preempt, the rate of default of CRA loans, or other outcome statistics of CRA itself, have NOTHING to do with how CRA affected the mortgage markets and credit policies, nothing whatsoever. (some lefty will probably post a bunch of irrelevant union label hogwash on this anyway) In combination with factor 2, unwise banking consolidation above, a) CRA + b) centralized profit driven, inexperienced credit committees + c) federal insurance and FNMAFMAC quotas on CRA loans + d) threats and out and out jawboning = a diminished credit quality climate throughout ALL consumer banking, banks, mortgage companies, etc. In essence, "loan to anyone, it's federally insured, THAT'S the new credit standard, not the careful fiduciary standards of the past." AND LO AND BEHOLD... the SUBPRIME INDUSTRY EMERGETH.

4. Lots of greedy street level Americans borrowed more than they could repay, there is fault on the banks here for lending it ( as explained in factors 2 and 3), but we have become such a nanny state that this factor is always ignored. IF YOU BORROWED MORE THAN YOU COULD AFFORD TO REPAY JUST BECAUSE YOU COULD GET IT, YOU ARE PART AND BLAMEWORTHY OF THE MC.

5. SO, there it is, government meddling in mortgages for 80+ years, unwise banking consolidation allowed by government in graft-flouting of antitrust laws leading to central consumer banking and more profit driven behemoth banks, resulting weakened credit standards across the board created by government jawboning, government quotas, bald government threats. THOSE are the primary causes of the MC. Everything else was just tangential oily rags. Not "derivatives," not "credit rating agencies," not "proprietary trading," not "Wall Street," not "securitizations," but GOVERNMENT generally.

Why MUST they preach and propagate this lie narrative? BECAUSE HALF THE GOVERNMENT, including ALL members of the finance and banking related committees, the Clinton and other administrations, and lots of the gov-edu-union-contractor-grantee-MSM complex should be IN JAIL over the mortgage collapse, and if the American people ever figure out the real truth, there will be a MASSIVE taxpayer revolt. They LINED THEIR POCKETS with YOUR losses, with YOUR savings, and the whole complex is DESPERATE that you never understand what really occured.

So with that long prelude, how does that affect this topic? The repeal of the duplicative amendment to Dodd Frank? It's just another piece of the lie narrative, getting you to believe that things you don't understand like derivatives and sophisticated trading caused that crash, and that regulating that will prevent another one. It won't:

http://www.forbes.com/sites/frances...nks-is-pointless-but-it-will-go-ahead-anyway/

That's right, the collapse was caused by easy to see RISKY LENDING, and GOVERNMENT'S ROLE IN THAT, which is NOT addressed by Dodd Frank, and has been curiously allowed to proceed BUSINESS AS USUAL since the crash. The crash didn't come from derivatives, or all the other hard to understand boogey men the COMPLEX preaches to you, it came from BAD loans, jawboned and mandated by GOVERNMENT, that allowed the UNWISE CONSOLIDATION of our financial industry QUID PRO QUO. NOTHING is being done on that, and while Fauxcahontas rails about Citigroup and "rolling the dice," the REAL DICE ARE BEING ROLLED right under your nose, just like they were pre 2008.

As previously cited, the Finance Committee, including all but 6 of 50 something members, including 21 Democrats voted OVERWHELMINGLY to repeal the Lincoln Amendment because it is BAD LAW... LAST YEAR. Read the analysis in the Bipartisan Report and the BILL ITSELF previously linked. This isn't something that Citigroup "slid into" the budget, it is a reasonable policy initiative aimed at a BAD REGULATION. Don't let Warren, Pelosi and others LIE to you in perpetuation of a gigantic blame-deflecting FRAUD on you by government. And don't take my word for it. READ the Bipartisan Report, read the actual linked bill, especially read the Forbes article by Ms. Coppola linked above. Then read these and whatever other educated sources you care to that aren't pure partisan rabble-rousing bullsh-t:

http://www.forbes.com/sites/georgel...-to-others-the-housing-bubble-and-dodd-frank/

http://imprimis.hillsdale.edu/file/archives/pdf/2013_11_Imprimis.pdf

http://www.aei.org/wp-content/uploa...h&utm_medium=paramount&utm_campaign=fha-watch

Read SOMETHING, but whatever you do, don't allow the latest leftist sewer pipe distortions du jour to frighten, manipulate or fool you. The repeal of the Lincoln Amendment to Dodd Frank is simply not a big deal, and has 0 chance of allowing banks to shuffle risking trading losses onto the taxpayer via bailout or otherwise. Stop being gullible and engaging in "regulation fallacies" and ignorant knee-jerk responses.