Financial Reform, Getting Tough on Wall Street
Posted by Ray on October 27, 2009 under Main | 
2 Comments to Read
Even though most of the failure of the last few years belongs right on the shoulders of the man orchestrating the financial reform bill, Barney Frank and his blind eye to the GSE’s, and other key Democrats who applauded the repeal of Glass-Steagall they are now going to pass financial reform. Worst of all they are putting more trust in the ultimate of failed institutions, the Federal Reserve and the FDIC, with even more power to regulate financial firms.
Essentially, anyone who encouraged, allowed and missed all the events that led up to the credit collapse of last year is now getting more power to make sure it doesn’t happen again. So much for ever going long equities in my lifetime again. The systemic risk bill would grant vast powers to a new systemic risk regulatory council, the Federal Reserve and the Federal Deposit Insurance Corp to monitor and address risks to economic stability posed by shaky financial holding companies.
Those deemed severely undercapitalized by the council could be restructured or even shut down by regulators. Managers could be dismissed, credit exposures limited, pay and bonuses restricted, acquisitions and new ventures blocked. Capitalism is now official dead and no one has been able to locate its body, but there is a toll free number to call with any tips, 1-888-ASK-4KEN.
We now know where the FDIC will get its funding from all the potential failures from in the near future as banks and other institutions are now forced to fund it themselves. Here is what the article says: “It also attempts to shift the cost of future financial stabilization efforts toward industry and away from taxpayers by forcing financial firms with more than $10 billion in assets to foot the bill for any losses from Federal Deposit Insurance Corp actions to resolve the problems of failing firms.”
Who knows what that officially means as no details are available yet as the bill just made it out of committee, I am sure more details will be available soon. Frankly, I think it is a good thing that the taxpayer will be off the hook, but I will believe it when I see it since it has been known for decades that the government will bailout banks if they get into trouble, and proven twice now. I am also pretty sure the taxpayer never asked to bailout the banks anyhow, all the people with the signs in front of Wall Street and Congress last fall should have tipped off lawmakers, but Congress did it anyhow.
What scares me the most is that Geithner is actually in favor of this reform. Why does that scare me? Geithner is not exactly the smartest guy in the room and has never been in the private sector and is a little too cozy with Wall Street. Plus, he could not figure out his own taxes, the IRS is under his direct control, so ponder that for a bit.
The really good news is that the one part of our system that was not broken, hedge funds and private equity funds, will now be forced to register with the government. These are the smartest guys in the room who actually made money last year and while they are not perfect, they did nothing wrong. What risk do they bring to the table? They had nothing to do with bringing the system to its knees unless they wrote mortgages and levered up 60-to-1 with CDO’s. It is the Lehman’s, Bear, Sterns, Merrill Lynch’s, Citi’s, Wachovia’s and the Fed that messed up, not hedge funds, but make them pay that makes sense.
Along with this bill Frank is also voting on a credit rating agency bill, consumer watch dog agency bill and bringing in the head of the CFTC apparently to tie everything together. Who knows where everything will end up as these things change a lot between committee and the actual vote in Congress. Also, Republicans and lobbyists are pushing back, but they will surely get shut out quickly. This bill will likely weigh on the markets on Wednesday as when the news hit the wires the futures went negative.
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Tags: bailouts, barney frank, financial collapse, Financial reform, obama
Johnnymustardseed said,
Ray,
I saw this and thought this as it relates to our previous discussion.
BALTIMORE — To Mitchell Goldstein, the flood of sick children seemed endless. Day after day, nearly three times as many kids as usual streamed into the rainbow-colored pediatric emergency room at Johns Hopkins Hospital, sniffling and feverish, worried parents hovering.
The press of children with swine flu was so relentless that doctors opened an annex in a hospital dining room to handle the overflow. “Our worst day” was Sunday, Oct. 11, says Goldstein, one of the ER doctors. “We had 15 to 20 patients an hour. It was 24/7. There wasn’t a lull.”
Last week, the epidemic of ailing children let up somewhat. But doctors here are expecting a new run of flu patients — the children’s parents. “What we see first in (children) we see two to three weeks later in adults,” says Trish Perl, the hospital’s director of infection control.
The scenes at Johns Hopkins are being repeated at hospitals in Denver and Duluth, Seattle and San Diego, as waves of flu patients arrive at their doors, doubling their emergency room volume. Just as significant is the effect on intensive care units: A relatively small number of flu patients are requiring intensive care, but some are so ill they will need round-the-clock care for weeks.
Doctors at Johns Hopkins and elsewhere expect the number of patients needing hospitalization and intensive care to rise. Such an influx of intensive care patients eventually could force some hospitals to cancel services such as elective surgery, they say.
“Why did President Obama declare a national emergency? Because what’s going on at Hopkins is happening across the country,” Perl says. “An infection that generally doesn’t appear to be severe is pushing hospitals to their limit.”
The White House declaration, announced Saturday, was designed to give hospitals the flexibility to move patients to satellite facilities if they are overwhelmed in dealing with an outbreak that is now widespread in 46 states and afflicting millions of people, says Reid Cherlin, an administration spokesman.
“H1N1 is moving rapidly, as expected,” Cherlin says. “By the time regions or health care systems recognize they are becoming overburdened, they need to implement disaster plans quickly.”
[...] To many analysts, swine flu appears to be two overlapping epidemics: one a cascade of mild to moderate cases that is stressing hospital emergency rooms, and the second a narrow stream of unusually young patients who need intensive care.
[...] Connie Price, chief of infectious diseases at Denver Health, the city’s public hospital, says, “I’ve been living this” since Aug. 28, when the hospital’s lab reported 12 positive tests for swine flu.
“Since then we’ve been inundated,” she says. “In a typical flu season, we may hospitalize 15 patients. With H1N1, we’ve hospitalized 10 times that many. We’re not even in flu season yet.”
Ray said,
As a bit of irony, my youngest may have had the flu, waiting on test results to determine if it was H1N1. I have to tell you, IF it was, the media is guilty of spreading fear and panic. I know it can get severe, we all know that, but our doctor said most cases are extremely mild and result in what our daughter had. She had wild high fever, but controlled withe Tylenol. extreme fatigue and tiredness and upper respiratory congestion with a nasty cough. She was out for about 2 days and then got better, well the fever broke at least.
According to our Dr., not my opinion, this is the most common type of infection, exactly what we saw. Yet, the media is hyping this thing like we are all going to die! We got people rioting to get the vaccine that will not prevent a mutated version of the virus from killing you and emergency rooms packed, because we are all going to die!! I was worried, don’t get me wrong, but she is fine, it was quick and not that bad. Now, if/when confirmed she has the antibodies and I guess we are in good shape as we got sick, but not bad.
Anyhow, I thought I would pass along my own experience about the flu. The media has to control itself and stop telling us we are going to die because if my daughter had it then she has had colds way worse than the flu. I will let you know the results and, again, I know there are different levels of severity, but this seems to be the most common form.
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