Sunday, October 25, 2009

Kill The Quants - But Don't Forget Congress & Lobbyists

Financial Regulation?
That's Truly Hilarious!

Much earlier in the year I channeled my inner Shakespeare and stated that we needed to kill all of the Quants. How silly of me to forget the real parasites.

http://tradersutra.blogspot.com/2009/03/aig-quants.html
I left out the this parasitical structure that basically screws Americans only because I did not think they had the onions to step in and fight regulation. I didn't think the Banks would have the nerve to take Tax Payer money and then demand and fight regulation tooth and nail. How naive of me. I do apologize. I have no clue what came over me. I should have known from my years of working on Wall Street what was up. At the end of the day I give Humanity too much credit.

But we need to silence K-Street. How do we do it? I say give them everything they want. Give the banks a blank check to do what ever they want to do. Lets say to them you have won. Is this blasphemy? Am I drunk from partying all Saturday night? Nope. On the contrary. This only sets up an even greater meltdown sometime next year. You see if we give the bankers and lobbyists everything they ask for, then they cant blame regulators anymore when the crap hits the fan. They cant blame home owners next time. They cant blame bad lending. Who is left to blame? You got it! The bankers and scum bag lobbyists. This is where the real revolution takes place.

http://tradersutra.blogspot.com/2009/08/meltdown-soon-social-unrestrevolution.html

This is when America takes their country back with brute force. Blood will be spilled and heads will roll.

But we cant get to this cathartic moment without giving in to the scumbags first.

The Lobbyists have already spilled their own blood to the tune of $220MM so far in 2009. Should not that money be used to recapitalize the bad bank balance sheets?

Chief Tax Payer Traitor Barney Frank of the House Financial Services Committee has already watered down much of the Derivative legislation.

The House Financial Services Committee, for instance, approved a provision on Wednesday that Mr. Frank said would exempt “the great majority” of businesses that use derivative instruments to hedge their business risks from trading such instruments through exchanges or clearinghouses.

The CTFC found this to be outright stupid. This sounds so much like 1998 with Brooksly Born. The CTFC is yelling at the top of their lungs about the lack of true effective regulation and Congress just cuts them down.

This particular exemption would create too large a loophole for financial instruments that were unregulated and played a central role in the economic crisis.

What do you think Obama thought of this? He loved it and supported it. Why wouldn't he? Obama is all about hollow regulatory promises.

What about the Consumer Protection Agency? Granted I was never a firm believer in this, but the sheer opposition by the financial sector tells me that these guys want to go back to the days of predatory lending.

The Obama Administration has proposed that the new agency protect consumers from abusive or deceptive credit cards, mortgages and other loans. But responding to the concerns that the agency could try to exert its jurisdiction over an array of other industries that lend money, like retailers and car dealers Benedict Frank has made clear his intention to exempt many other businesses from oversight as part of his effort to steer the measure through Congress.

Now some 98% of the nations banks are exempt from these new regulations that Obama has directed.

The heavily neutered Financial Protection Agency now doesn't have jurisdiction over 8000 of the roughly 8200 banks in the country. Only the large banks are subject to the agency's examiners.

Even after all of this the ABA still is not satisfied!

“We continue to have our fundamental concern that the bill will create a new agency with incredibly broad powers that will be in constant conflict” with other regulators, said Edward L. Yingling, president of the American Bankers Association."

The Derivatives bill which passed 43-26 is also heavily neutered. Its all business as usual with the same old hollow promises. Like I said. Heads need to roll for these people to realize the games they are playing with real people and real money.

The legislation’s chapter on derivatives would impose new regulations and capital requirements on dealers, and would force more trades onto exchanges or electronic platforms. But in a major concession to businesses, many trades intended to hedge risks by companies like airlines, manufacturers and energy interests would be exempt from trading through exchanges or clearinghouses. What makes you so sure that Wall Street Banks wont buy energy interests and other manufacturers that have this exemption? They will just move all of their commodity operations to the exempt energy trading unit and they are back in business.


The political obstacles to the creation of a consumer protection agency are quite formidable. In the last decade, banking and other interests that now oppose the agency’s creation contributed more than $77 million to the members of the House Financial Services Committee, according to the Center for Responsive Politics.

Two of the largest recipients of money from the financial sector over the period have been? You guessed it! Mr. Barney Frank!

The other scumbag? Representative Spencer Bachus of Alabama, the senior Republican on the committee and a leading critic of the administration’s plan.

With elected officials like these? Who needs Al-Qaeda?


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