Fed SUPERBANK the next anathema in the USA

[bigfootzx]

So now we have deregulation and the next big thing, a super agency designed to regulate the deregulated banking industry. "One banker went so far as to say he thought the disclosure of the superbanks' idea was part of a plot by the securities industry to thwart the big banks' lobbying for expanded powers in investment banking."

Sure we can trust wall street, they only hire the honest and ethical and those who have resumes that read " I neither admit no deny any wrong doing"! Will such an an agency be able to control the banking and securities industry or will it be an albatross leading us nowhere?

http://query.nytimes.com/gst/fullpage.html?res=9B0DE2D91039F933A25755C0A9619482 60&sec=&spon=&pagewanted=1
LEAD: Bankers across the nation are upset by reports that top Treasury officials favor the creation of ''superbanks'' - conglomerates that would be made up of big commercial banks and huge industrial companies.
Bankers across the nation are upset by reports that top Treasury officials favor the creation of ''superbanks'' - conglomerates that would be made up of big commercial banks and huge industrial companies.

The bankers are unhappy for a variety of reasons. At the biggest and strongest banks, officials favor superbanks but say - refusing to be identified publicly - that they fear disclosure of the Treasury's view could backfire in Congress and whip up opposition to further deregulation of banking.

[disrupter]

Underwriting unregulated banks is giving them a blank check,

a recipe for disaster.

I have a feeling this/these proposals are going to take some serious scrutiny.
I am not sure in abstract what they are attempting, to even guess if the proposal even does a meager attempt at accomplishing it.

'risk insurance' is an oxymoron.

i guess that is what morons would seek.
it is certainly what THIS moron is seeking,
along with the fountain of youth, the goose that lays golden eggs, among other things.

I guess the question is what are we looking for?
reasonable currency stability, ie. no too rapid changes?
who or what are we trying to protect?
the bank's retail customers?
investors in banks?
the crooked CEOs who walk away with billions while their institution wobbles & collapses?

Certainly some kind of national or state standards in mortgage origination must be implemented. What some of these were creating was pure rot & putrification.
There we just have to decide if we have a national standard or perhaps some national caging of state standards.
This protects both bank investors as well as naive borrowers from the unscrupulous scoundrels that have been operating for the past 5 years or so.

[disrupter]

Certainly nothing is completely idiot proof,
but leaving bare 110 volt wires without insulation should be illegal.

[Moby]

The Neoconservatives love big government, big agencies and big business. This is the next logical step in The PNAC plan.

[disrupter]

Question: how much do we want to insulate the American banking system from global markets?

Less insulation means more risk, more potential up & down sides.
More insulation means less risk, but less potential benefits.

Maybe some graduated banking system,
where there was some gradient of risk available to investors &/or retail banking customers?

With some possible designed 'break points' where in emergency it would create a barrier between that upon which recovery was attempted and that which was left completely at the mercy of the market?

One thing that should be available to ANY taxpayer exposed bank insurance is virtual complete accounting transparency.

While we are at it, accounting transparency at the Fed would be in order too.

[bigfootzx]

The Superbank is the govt. equivalent of Homeland Security with the Fed and Treasury overseeing banks. Problem is they think these banks should operate in secrecy according to the NY Times.

Of course they'd want to be one without knowing what a superbank is!! So long as the banks get to write the rules that govern a superbank, who wouldn't want to be one. Sounds like BigBrother with a book of blank checks!!!

"Several top officials of leading New York banks said they liked the idea of superbanks. ''We would want to be one, and I'm sure many of the other New York banks would want to be a superbank, too,'' said one banker, who asked not to be identified."

[AVG_JOE]

Certainly nothing is completely idiot proof,
but leaving bare 110 volt wires without insulation should be illegal.

It's not the volts that will sting you... it's the amps!

The board of The 'Federal' Reserve is not beholding to anyone but themselves. We don't vote for them and we can't buy shares in the institution.

Now the Dems are BEGGING the Reps to give them even more control over our economy! Damn. These guys are good!

Why would they give a crap about the rest of us?

-Joe

[Bill]

Does anybody have a good sense yet of exactly what this new regulation of the finance industry will involve?

I'm usually fair at extracting the gist out of finance speak, but everything said so far seems incredibly vague.

[unlawflcombatnt]

So now we have deregulation and the next big thing, a super agency designed to regulate the deregulated banking industry. "One banker went so far as to say he thought the disclosure of the superbanks' idea was part of a plot by the securities industry to thwart the big banks' lobbying for expanded powers in investment banking."
http://query.nytimes.com/gst/fullpage.html?res=9B0DE2D91039F933A25755C0A9619482 60&sec=&spon=&pagewanted=1

This article is from 1987. Is there something similar going on in 2008?

[bigfootzx]

This article is from 1987. Is there something similar going on in 2008?

Yes, good catch, two dates and this is not the first talk of superbanks.

http://www.wtopnews.com/index.php?nid=116&sid=1378141

[bigfootzx]

Does anybody have a good sense yet of exactly what this new regulation of the finance industry will involve?

I'm usually fair at extracting the gist out of finance speak, but everything said so far seems incredibly vague.

3 super agencies to regulate the financial industry, all talk is vague so far. Bernake said today he thought the Bears Sterns bailout is a good idea even though he admitted he did not know the specifics of the bailout, lol. So it sounds like a good idea why, maybe Ben heard someone on TV saying it was a good idea.

Superbank will end up being another layer of government, it will work for the corporations but will it protect the people and economy from the wreckless masterminds who game the system to their advantage? Ironically, Bush has said he thinks Bernake is doing good job managing the crisis so far. What a dope!!


http://www.livemint.com/2008/04/01001838/US-credit-crisis-Dilbert-stra.html
Anyone who has worked in a large organization — or, for that matter, reads comic strip “Dilbert” — is familiar with the “org chart” strategy. To hide their lack of any actual ideas about what to do, managers sometimes make a big show of rearranging the boxes and lines that say who reports to whom.
You now understand the principle behind the Bush administration’s new proposal for financial reform, which will be formally announced on Monday: It’s all about creating the appearance of responding to the current crisis, without actually doing anything substantive

[Moby]

What's interesting is that Paulson has spent over a year writing these new regulations. It was just a few months ago when Bush and Paulson was telling the American people that things were fine. People actually believed them.

If things were fine then why was Paulson working on these regulations?

[bigfootzx]

Paulson needs to resign, we need someone who actually understands how to solve the problem. No more band aid fixes. Bankers are going to jail, I wouldn't mind seeing some lobbiests in cuffs too.

[bigfootzx]

http://mobile.sun-sentinel.com/detail.jsp?key=23811&rc=bu&full=1
Critics, including many Democrats, contend that a Republican administration tilted too far in drawing up the plan toward deregulation and failed to do enough to crack down on serious abuses.

While Wall Street investment firms are generally happy with Paulson's ideas, groups representing small and medium-size banks, thrift institutions and credit unions were not, complaining about the provision to consolidate several federal bank regulatory agencies into one super bank regulator.

"This plan is very Wall Street-centered. It has very little understanding of what goes on in community banks on Main Street every day," said Camden Fine, president of the Independent Community Bankers of America, the lobbying group for 5,000 community banks located across the country.

Fine said his group, which has members in every congressional district, is firmly opposed to the Paulson approach and planned to make sure members of Congress knew of their unhappiness.

State officials who see the Paulson approach as a power-grab in such areas as insurance regulation also complained. "I will strongly fight any effort to pre-empt or reduce state authority," Connecticut Attorney General Richard Blumenthal said. The federal agencies that would be revamped can also be expected to weigh in.

Even the Federal Reserve, which would win broad powers to oversee the entire financial system with the new designation of "market stability regulator," would see its day-to-day supervisory power over bank holding companies taken away. Fed Chairman Ben Bernanke
has argued in speeches that the Fed needs this power to give it the information it needs to conduct monetary policy.

Online What affect would the U.S. financial system overhaul have on you? Go to Sun-Sentinel.com/business for a Q&A to find out.

[Moby]

[QUOTE=bigfootzx"This plan is very Wall Street-centered. It has very little understanding of what goes on in community banks on Main Street every day,"[/QUOTE]
We have to protect Paulson's $100,000,000 worth of Goldman Sachs http://dcjunkies.com/showthread.php?t=3709

[AVG_JOE]

Can anyone out there post a list of politicians who have some sense concerning the hiring of bureaucrats who know what the #&*% they're doing and are not just good on their knees?

It has to be a short list... but one with value!

Another good list to see is politicians who oppose corporate lobbying and / or favor term limits.

Even for state & local races... If I could find candidates who was on the record for curbing political favors, I wouldn't care if they were democrat, republican, libertarian or what - I'd not only vote for him / her, I'd consider sending cash!

-Joe

[bigfootzx]

Can anyone out there post a list of politicians who have some sense concerning the hiring of bureaucrats who know what the #&*% they're doing and are not just good on their knees?

It has to be a short list... but one with value!

Another good list to see is politicians who oppose corporate lobbying and / or favor term limits.

Even for state & local races... If I could find candidates who was on the record for curbing political favors, I wouldn't care if they were democrat, republican, libertarian or what - I'd not only vote for him / her, I'd consider sending cash!

-Joe

Most political appointees have personal relationships with the president and/or various cabinet members and even congressmen. The good ole boys network seems to hire the good, the bad and the duschebags!!

The irony is the most powerful politicians in all parties have one thing in common, they all graduated from Ivy League schools and they hire Ivy League bureaucrats as if they are our salvation. Maybe that is one of the problems??

I've met many smart graduates from non-ivy league schools and I've met a few duschebags ivy league types who were quick to let me know where they went to school a if I should be impressed. While Havard an dYale do turn out some impressive grads, I've seen equal men and women who could hold their own with the ivy crowd.

No politician I can think of is in favor of term limits, but we need it to weed out the dead wood in the legislature!! Corporations would lose their grip of power in D.C.

[bigfootzx]

This article came in todays email, they love to breakdown all political actions into the basics and how the change will affect taxpayers and investors. Isn't it great that Hank Paulson is a real estate perma-bull!

http://www.wealthdaily.com/newsletter.php?date=2008-04-04
How To Put the Screws to Wall Street's Overhaul
By Ian Cooper | Friday, April 4th, 2008

Wall Street doesn't care about you.It's too busy fighting for its life. Big Wall Street firms have taken the U.S. economy to the threshold of the abyss, a cataclysmic vortex of wealth destruction not seen since the Great Depression.

We're about to watch the Fed sink its claws into Wall Street, forever changing the game, says Brian Hicks.

We're also watching as the Bush Administration introduces the Wall Street "overhaul," the broadest plan of financial oversight since the Great Depression, which could change the way the government regulates thousands of businesses.

Not to worry, though. It's unlikely we'll see it in action any time soon. Former housing bull and "at or near bottom" pontificator Hank Paulson assures us that the changes are intended for longer-term problems, than serve as a quick fix.

Though, if all goes according to plan, the regulatory web created in the 1930 would become wider, with power concentrated in fewer agencies. One of the recommendations is to merge the SEC with the Commodity Futures Trading Commission.

But you can't move boxes around and expect a long-term solution. The Reality Behind the Wall Street Overhaul. What the plan would do is hand new authority to the Federal Reserve, an idea that makes no sense. The Fed was responsible for overseeing our current meltdown. It was Greenspan who used to praise derivatives market growth as a boon for market stability, while ignoring calls for the regulation of the mortgage market, says The New York Times.

So, who does the overhaul plan really help?

According to the Times, "If adopted, the sweeping overhaul of the system overseeing the American financial system proposed by Treasury Secretary Henry M. Paulson Jr. on Monday could hand Wall Street investment banks a major victory in their years of effort to streamline regulation.

One change Wall Street wants is for regulators to shift from policing the industry with hard and fast rules - do this, don't do that - to using looser "principles" that might be open to interpretation. Another is to modernize the hodgepodge of state and federal regulators that sometimes overlap and compete with one another."

From what I've seen, there's nothing "in it" for the public, meaning we're the low man/woman on the totem pole. What makes the situation sadder is the assertion of timeliness. Years after allowing floods of poorly documented loans to feed the housing bubble, which has since dragged us into recession territory, we're told the plan is timely.

Says the Federal Reserve:

"The Treasury's report presents a timely and thoughtful analysis and is an important first step in the complex task of modernizing our financial and regulatory architecture. We look forward to working with the Congress and others to help develop a policy framework that will enhance financial and economic stability." But it's anything but timely:

Banks are falling.
Unemployment is rising.
People are walking away from homes.
Credit delinquency and foreclosure rates are rising.
Commercial real estate is set to plunge.
And my favorite, SEC Openly Invites Corporations to Lie.
Nice, huh?

And the daily spew of ridiculousness continues. The Fed is spending billions of taxpayer dollars to bail out banks. Banking CEOs are telling us their liquidity positions are solid, only to fall apart, needing Fed bailouts to stay afloat days later. We saw it happen at Countrywide in 2007. And we saw it again at Bear Stearns in 2008.

We have a Fed chief that believes "a recession is possible," with a belief that the $168 billion stimulus package will limit economic damage. But it's tough to save us from a recession we're already knee deep in.

Truth told, Wall Street could care less about you.

Banks and Wall Street firms are more important than you. Brokers care more about saving commissions and keeping their jobs than guiding you through tough economic times. And the Fed is busy saving billionaire banking CEOs who drive Maseratis through foreclosure-torn neighborhoods even after losing billions in market cap. Even the credit agencies could care less.
It was March 13, 2008 when Standard & Poor's believed that subprime writedowns will total close to $285 billion when the crisis is over, putting us "past the halfway mark."

"Standard & Poor's Ratings Services believes that the bulk of the write-downs of subprime securities may be behind the banks and brokers that have already announced their results for full-year 2007. There may be some additional marks to market as market indicators have shown deterioration in the first quarter. However, when we dissect the percentage of write-downs taken against various types of exposures, in our opinion the magnitude of some write-downs is greater than any reasonable estimate of ultimate losses..."

They knew the crisis wasn't over. Do you think they were shocked on this news? "UBS doubled its writedowns from the subprime crisis on Tuesday, dumped its chairman and sought more emergency capital in a second attempt to reverse its fortunes. Its shares climbed 7.5 percent as investors hoped the move marked a turning point for the firm that now leads the global list of banks hit hardest by the credit crisis.

UBS wrote down an additional $19 billion in ailing assets, bringing to $37 billion the damage wrought by the subprime crisis and causing a net loss of 12 billion Swiss francs ($12.03 billion) in the first quarter.It pushes UBS, Switzerland's flagship bank and financial fortress for rich investors, past Merrill Lynch to the top of the league of writedown shame."

All the while:

Record numbers of Americans are receiving food stamps, which could reach an all-time high of 28 million by year end.
Gas prices are likely to reach $4 as we near summer driving season.
Milk, eggs, and bread costs are through the roof.
The average number of Americans filing for unemployment benefits hit a two-year high of 2.824 million.
Construction spending fell for the fifth month.
Manufacturing activity dropped 0.3% in February, reflecting weakness in home building and non-residential activity.
Consumer spending ticked up a scant 0.1%. Remove inflation and the numbers were flat.
And there are still economists that believe we can avoid a recession. But what do they know?

Three months into the last recession, not one economist accurately predicted a recession in a survey. Unfortunately for their credibility, later evidence pointed out that a recession had begun at the time of the survey.

But it's tough to argue against recession when: Well Fargo CEO John Stumpf says, "It is now clear that the U.S. and global financial markets are experiencing their worst financial crisis since the Great Depression."

And when the Oracle of Omaha, the chairman and CEO of Caterpillar, and even George Soros says this is the "worst market crisis in 60 years..."
While it'd be nice if the $168 billion economic stimulus plan saved the economy, chances are slim if taxpayers use it to pay down debt or save it.

[bigfootzx]

The International Monetary Fund said total losses due to the financial market turmoil may grow to $945 billion. This is a substantial increase from the current write-down total of $232 billion, according to Bloomberg.com. They may as well round up the number to one trillion.

The Fed released its March 18 FOMC minutes. Garnering the most attention was word that many Fed officials felt that an economic contraction was "likely." This should not come as too much of a shock, as Bernanke noted in his testimony before Congress last week that the economy "could" contract. Admittedly, "likely" is a sterner word than "could", but the market has feared a contraction long before this release. So much for strong words from Uncle Benny's Pawn and Loan!!