Dodd Bill = Useless

Question: Why did the markets rally in the afternoon yesterday and go green at the close?

Answer: Market participants realized that the Dodd Financial Regulation Bill was another useless giveaway to Wall Street. There were rumors that this bill would be Tax Payer friendly, hence the weakness in the markets earlier on, but once the secret handshake society realized that the bill was impotent it was all systems go.

It was the ultimate dog and pony show, Of course the bait and switch was just taking the place of the dog and pony.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aIYoey051ty4&pos=1

"Dodd would let the Federal Reserve force firms to divest holdings if they pose a “grave threat” to the economy, make hedge funds overseeing more than $100 million register with regulators and require central clearing for derivatives, according to a summary released today."

This is so ludicrous that its borderline insulting. Does anyone in their right minds think or believe that Bernanke and his pawns at the Fed will act on this? Does Dodd actually believe the same guy who didn't see the housing bubble or even the recession coming is suddenly going to find the sense to break up the 40 Thieves? This is beyond infuriating. Bernanke is the same guy who wants to put a floor on interest rates by paying interest to the 40 Thieves to take care of the excess reserves problem. Pay interest to Wall Street! I would have to walk the earth backwards to find someone more useless then Uncle Ben. What's worse is there is not anyone who can remotely do this nitwits job at the moment. What decent human being would want this job? This is the state of our regulatory system at the moment. If we can't find a suitable replacement for a useless moron what good is country let alone our financial system?

The systemic risk is that commercial banks borrow from the tax payer at zero interest rates and then speculate with that money. You cant get anymore systemic than that. The Fed is powerless to do anything about it because they are the first link in the problem. The balance sheets for all of the commercial banks are littered with toxic crap that is being marked to fantasy. If these were marked anywhere near the real market, they all would be insolvent. This is not news to anyone yet this is allowed to go on.

Greenspan along with the Fed failed in their duties to regulate and reign in Wall Street excess. This is the truth. Bernanke is just following Greenspans lead.

Giving the Fed more resolution authority is like housing the RICO Task force inside Sparks Steakhouse. It will gutted from the inside. The Fed has had the authority to regulate commercial banks but never did. This is why securitization went out of control. This is why Neg Am, Pay Option, and Option ARM mortgages exploded at WAMU and Wachovia. Now that Wells Fargo and JP own these entities, do you think the Fed has the onions to actually regulate these outfits?

If the Dodd bill gets passed it will do nothing. The Volcker Rule attachment does nothing if the Repo Markets are not reigned in. If Congress is really serious about reform, there would be a clear separation of powers and we would have an independent CFPA. Why do we need a regulation authority anyway? Just get rid of the unofficial TBTF mandate that the 40 Thieves currently enjoy.

The Fed will continue to do nothing because Wall Street wants it that way. The Dodd Bill make TBTF an official policy as it doesn't offer a real solution. They are just making up solutions to problems that don't exist in an attempt to avoid the challenges that Tax Payers currently face. Its a gloss over and total giveaway to Wall Street.