"The Senate version of financial regulation hits Wall Street harder than expected"

[ProSense]

The two measures, included in the Senate bill passed last week, take direct aim at some of the more risky -- and profitable -- parts of banks' business.

One proposal would require financial firms to spin off their trading desks that deal in derivatives.

The other -- dubbed the Volcker Rule for its proponent, former Federal Reserve Chairman Paul Volcker -- would ban banks from wagering with the firm's own money, what the industry calls "proprietary trading." Firms would also be restricted from investing in or sponsoring private-equity funds or hedge funds.

The restrictions, if included in the final bill, would hit bank profits.

link

The Senate version of financial regulation hits Wall Street harder than expected, with some analysts estimating it could cut the profits of major financial institutions by roughly 20%.

Critics of a comparable bill that passed the House in December said the Senate version has fewer escape routes and exceptions that leave room for Wall Street firms to work around new restrictions on their riskiest activities.

link

[Cha]

1. Not gonna like it. They were whining

before.

[ProSense]

2. Who?

Wall Street or the people who seem to be afraid of this information?

[Cha]

3. I meant Wall Street but

I can see why there would be that question.

[ProSense]

4. I figured that.

Still, one has to wonder why any progressive would be uncomfortable with this information?

[Teaser]

14. that's a pick'em

.

[jenmito]

5. Well, then, OBVIOUSLY Obama would veto the bill if it came out of conference this tough

since he's a CORPORATIST!!!!111!!1!11

[msongs]

6. it will most likely be weakened or watered down by the aim low and settle for even less dems

that seem to get their paws on all legislation that could be fabulous.

Or as a famous democrat says, "don't let the good get in the way of the barely adequate" lol.

Msongs

[ProSense]

7. Well, people should be fighting to ensure that it doesn't get watered down. n/t

[donco6]

8. But the article pretty much says the two biggest pieces will be stripped out.

"Experts believe that the amendment aimed at regulating derivatives proposed by Sen. Blanche Lincoln, D-Ark., will be left on the cutting-room floor or watered down substantially."

And the Volcker piece looks just as iffy, if not more so.

[ProSense]

9. "Experts believe..."

Experts can speculate all they want to. It passed the Senate and it's still in the bill.

[donco6]

10. I guess we'll just have to wait and see. n/t

[jeanpalmer]

29. According to Matt Taibbi

the Lincoln Amendment has already been gutted.

Then reform advocates started reading the fine print of the Lincoln deal, and realized that all those Wall Street lobbyists had really been earning their money.

That same day the GOP amendment failed, the derivatives expert Adam White was at his home in Georgia, poring over a "redline" version of the Lincoln amendment, in which changes to the bill are tracked in bold. When he came to a key passage on page 570, he saw that it had a single line through it, meaning it had been removed. The line read, "Except as provided in paragraph (3), it shall be unlawful to enter into a swap that is required to be cleared unless such swap shall be submitted for clearing."

Translation: It was no longer illegal to trade many uncleared swaps. Wall Street would be free to go on trading these monstrosities by the gazillions, largely in the dark. "Regulators can't say any longer if you don't clear it, it's illegal," says White.

Once he noticed that giant loophole, White went back and found a host of other curlicues in the text that collectively cut the balls out of the Lincoln amendment.

http://www.rollingstone.com/politics/news/;kw=<36899,157778>?RS_show_page=5

[donco6]

11. Odd. The Young Turks think just the opposite:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=385x468308

"Wall Street is laughing at us."

[ProSense]

13. Wait, the bill includes this provision and the impact is not in question

and Younk Turks is supposed to negate this?

[donco6]

15. It was a pretty good clip. You should watch it. n/t

[phleshdef]

21. I like Cenk, but sometimes he talks a lot of shit without really knowing much about it.

[ProSense]

27. The trick is

to ignore facts in favor of hyperbole.

[hulka38]

12. Robert Reich (thanks for the link ProSense) whom I trust more than Wall Street

Journal's Randall Smith on economic/financial matters and everything else for that matter wrote a short and informative article on the subject of the Senate's version of financial regulation versus structural reform here: http://robertreich.org/post/628324698/obamas-regulatory-brain

Robert Reich thinks that the Senate's version of financial regulation is the weaker, non-effective approach when what's needed is real structural reform.

Here's a snip

Here, too, the bill takes a regulatory approach instead. It includes a provision barring banks from “proprietary trading,” or making market bets with their own capital. Even if this regulation were tough enough (and the current Senate bill requires various delays and studies before it’s applied), it would not erode the giant banks’ monopoly over derivatives trading, adding to their power and inevitable “too big to fail” status.

Robert Reich is a man of integrity, keen intellect, independent thought and is a good progressive.

[ProSense]

16. "Robert Reich is a man of integrity, keen intellect, independent thought and is a good progressive."

Who makes the OP's point:

<...>

Case in point: The measure in the banking bill that would force banks to push their derivative trading into separate units rather than rely on tax-payer subsidized insured deposits. For reasons I’ve already stated, the measure is common sensical.

Wall Street hates it because it would cost it billions.

Already New York Representative Michael McMahon says he’ll work to remove it from the bill. Yesterday, New York Representative Gary Ackerman, also a member of the finance committee, told his staff to circulate a draft letter yesterday to House members seeking their opposition to it.

Watch who signs Ackerman’s letter. Listen for the positions of members of the conference committee. Vote accordingly next fall.

link

[hulka38]

17. As you know, the Wall Street Journal and CNBC want to give the impression

that this regulatory bill (which Obama backs) is really, really tough on Wall Street, whereas Reich, the good, honest progressive is saying the bill is weak and what's needed is structural reform (which Obama is not in favor of).

[ProSense]

18. Reich: "Wall Street hates it because it would cost it billions."

Do you dispute that statement, and the details in the OP?

[hulka38]

19. Here's Reich from Monday on the provision in the bill that he refers to in your quote above

"This measure is still in the bill, but is on life-support after Paul Volcker, Tim Geithner, and Fed chair Ben Bernanke came out against it. Republicans hate it. The biggest banks detest it. Virtually every major Wall Street and business lobbyist has its guns trained on it. Almost no one in Washington believes it will survive the upcoming conference committee."

Again, "This measure is still in the bill, but is on life-support after Paul Volcker, Tim Geithner, and Fed chair Ben Bernanke came out against it...Almost no one in Washington believes it will survive the upcoming conference committee."

Do the articles from the Wall Street Journal or CNBC mention that the one tooth in this rough, tough regulation bill is about to be knocked down it's throat by the bank lobbyists?

And why did Obama's Wall Street Boyz come out against it?

[ProSense]

20. Reich today: "Wall Street hates it because it would cost it billions."

Case in point: The measure in the banking bill that would force banks to push their derivative trading into separate units rather than rely on tax-payer subsidized insured deposits. For reasons I’ve already stated, the measure is common sensical.

Wall Street hates it because it would cost it billions.

link

Do you dispute his comments, and the details in the OP?

[hulka38]

22. I just quoted it myself. Reich said the exact same thing on Monday.

Here's what you leave out in your OP - this thing that Wall Street hates that is in the bill now won't be there for long. It's about to be removed due to lobbyist pressure. This bill that is so tough on Wall Street is about to become toothless. If you read Reich, and I know you did, how could you have possibly left that key point out unless you have an agenda? That omission changes everything. Let's stop pretending.

[ProSense]

23. "this thing that Wall Street hates that is in the bill now won't be there for long"

Wow, you can predict the future.

So your point is that the bill isn't strong enough because the thing that currently makes it strong is likely to be removed?

Ludicrous.

[hulka38]

25. Robert Reich is predicting that, not me.

Reich: "This measure is still in the bill, but is on life-support after Paul Volcker, Tim Geithner, and Fed chair Ben Bernanke came out against it...Almost no one in Washington believes it will survive the upcoming conference committee."

What do your sources say?

"So your point is that the bill isn't strong enough because the thing that currently makes it strong is likely to be removed?"

Reich: "Wall Street’s lobbyists have fought tooth and nail against these three ideas because all would change the structure of America’s biggest banks. The lobbyists won on the first two, and the Street has signalled its willingness to accept the Dodd bill, without Lincoln’s measure."

So he's saying that Wall Street banks have already knocked out two of the three teeth in this bill and are going to get the third any day now. What's ludicrous about what Reich is saying?

[ProSense]

26. "Wall Street banks have already knocked out two of the three teeth" The two teeth are in the bill

see the OP. The measures that failed were not the strongest in the bill. Walll Street lost on those measures in the bill.

Predictions being what they are, anything is possible. At least one Senator believes the bill might become even stronger.

The fact is that it is a strong bill that cuts into Wall Streets profits significantly. Stronger would be better, but pretending that Wall Street is happy is ridiculous.

[ShortnFiery]

24. No worries, the banksters and ruling corporate moneyed elite will take it out of our hide.

Sooner rather than later, we, the unwashed masses will pay "the man."

http://www.youtube.com/watch?v=1fuDDqU6n4o

Captain, Road Prison 36: You gonna get used to wearin' them chains afer a while, Luke. Don't you never stop listenin' to them clinking. 'Cause they gonna remind you of what I been saying. For your own good.

Luke: Wish you'd stop bein' so good to me, cap'n.

[G_j]

28. just a note, I think it's annoying when

one has to go to the link to know the source of posted information. In this case, I had to go through two links.

[ProSense]

30. Sorry, but that's

how it is when you link to a blog that links to other articles that also include links.

[rocktivity]

31. Doesn't it have to go back to the House one more time?

:headbang:
rocktivity