Sorry, Wall Street, Santa Claus Doesn't Live Here Anymore
I'm happy to see that despite enthusiastic financial support early on in his campaign from Wall Street, Obama is indeed biting the hand that fed him. This bodes well for his political courage:
WASHINGTON — The Obama administration plans to move quickly to tighten the nation’s financial regulatory system.
Officials say they will make wide-ranging changes, including stricter federal rules for hedge funds, credit rating agencies and mortgage brokers, and greater oversight of the complex financial instruments that contributed to the economic crisis.
Broad new outlines of the administration’s agenda have begun to emerge in recent interviews with officials, in confirmation proceedings of senior appointees and in a recent report by an international committee led by Paul A. Volcker, a senior member of President Obama’s economic team.
A theme of that report, that many major companies and financial instruments now mostly unsupervised must be swept back under a larger regulatory umbrella, has been embraced as a guiding principle by the administration, officials said.
Some of these actions will require legislation, while others should be achievable through regulations adopted by several federal agencies.
Officials said they want rules to eliminate conflicts of interest at credit rating agencies that gave top investment grades to the exotic and ultimately shaky financial instruments that have been a source of market turmoil. The core problem, they said, is that the agencies are paid by companies to help them structure financial instruments, which the agencies then grade.
“Until we deal with the compensation model, we’re not going to deal with the conflict of interest, and people are not going to have confidence that the ratings are worth relying on, worth the paper they’re printed on,” Mary L. Schapiro said in testimony earlier this month before being confirmed by the Senate to head the Securities and Exchange Commission.
... turning the clock back 60 years or so, to the same kind of oversight that was enacted after the great depression.
You know, the same kind of oversight that Phil Gramm, George Bush, et al, have been de-regulating for the past couple decades.
Finally, some common sense might creep back into government.
I disagree that Obama is "biting the hand that feeds him". Quite the opposite. I believe a number of Wall Street Executives were ASKING for more government regulation to quell the wildly swinging markets.
* There are two types of Republicans: millionaires and suckers.
"Mugsy's Rap Sheet": Recording history for those who seek to rewrite it.
but considering that lack of regulation contributed to the current crisis, I think it's more likely that Obama is seeking to undo that damage rather than appease Wall Street in the short term.
http://www.msnbc.msn.com/id/28842027/
Why are the Dems talking out of both sides of their mouths?
I can't for the life of me understand why Congress can't demand accountablity for the money already given the banks before they hand out any more. Just say, "We're willing to give you more, but you have to account for any past taxpayer money you've already received as well
as any new funds." If they refuse to do it let them fail and liquidate what assets they have and put the money into infrastructure.
woodguy
That is so common sense, that I guess people are overlooking it or have more nefarious motives. Sometimes solutions are too easy for people to see. But that comment is great and to tell you the truth, I hadn't thought of it or even heard of that condition being applied to it. I just know that what is going on is disgraceful.
I just lost a lengthy post I wanted to put up but don't have the energy to reformulate it, so I'll offer a synopsis. In my opinion there are plenty of what people (who, incidently, have probably spent a great deal of their lives trying to avoid objects like...say...shovels) call 'shovel ready' projects already drawn up and ready to go. Those that aren't can emmploy thousands of civil and structural engineers, architects, surveyors and environmental impact experts. As a person with years of constuction experience, I can tell you that the dirty guys working around the clock that you actually see on a jobsite are supported by scores of support groups before, during and even after construction.
In my opinion, those who don't want to start infrastructure projects because they may not all have an immediate effect are of the same mindset of those who scoffed at Carter's call for conservation and a raising of the CAFE standards. Well, folks, it's thirty years later and we're no further now than we were then because it would have 'taken too long".
woodguy
Heres a short video that will explain everything.
http://www.youtube.com/watch?v=k9zwAibpHvw
of this barn.
Crony Capitalism
Welfare for the Rich
Let us see REAL action.
Forensic audits of the institutions receiving public money.
Disgorgement of ill gotten gains and jail time for the crooks.
statusquObama, change you can only pretend in
What do you think a forensic audit will do? Goals?
http://www.nakedcapitalism.com/2009/01/obamas...
http://www.forbes.com/2008/12/24/billionaires...
That is GREAT to hear. I hope we can turn this thing around. Luckily we are dealing with Obama and his intelligence and not the "economy is not my strong suit" McCain and the wacko Palin. We all need to push on through and make sure the likes of George W. Bush and pals never regain power or credibility in this nation again.
politicians, that know NOTHING about the economy, I think the big guns that probably have been thru some cycles, know a bit about it. Besides, they are the ones that will create a turnaround (whether we like to admit it or not) regardless how many trillions the gov't borrows.
In 1990, there was ten billion dollars in hedge funds. By '08, over 1 trillion. That is a very large percentage of the overall market to be free of regulation and oversight.
A good portion of HF are not located in the US. How do you regulate that?
Without sounding exestential, how do you regulate anything in the first place?
Laws and enforcement.
And yes, I am aware of the many ways to evade the above. But it was the simplest answer to give.
Nice talk about some regulation. Let's see action before getting too giddy.
Yes, if all they'll come up with is another Sarbanes-Oxley, do let it be. How about one rule for any economic activity: NO RIPPING OFF!
The main posting states:
The core problem, they said, is that the agencies are paid by companies to help them structure financial instruments, which the agencies then grade.
That is a significant problem. The larger problems derive from the legal barriers that make it nearly impossible to sue a rating agency and win, even where there is gross malfeasance and incompetence, due to a court developed doctrine that the rating agencies are part of the press and have first amendment rights as if they were the press.
As a result, thanks to these many decisions of conservative establishment protective judges, the rating agencies go their own way with no fear at all of being sued for their corruption. So, any meaningful legislation needs to remove this shield from the agencies - which will clean them up much much faster.
Zorter
The non-government agency, the Federal Reserve and Frank and Paulsen (!) have been chosen to oversee this "regulatory effort". Is it allowing only one bag of money out the back door at a time instead of two or three at a time?
Gads I hope I'm wrong.
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