Moderator: Andrew
ohsherrie wrote:http://www.npr.org/blogs/thetwo-way/2010/07/26/128778100/obama-hits-republicans-for-opposing-disclose-act
Gee, I wonder why the rethugs would be so afraid of this bill? Oh yeah, that's right, swiftboating is their favorite sport.
Seven Wishes wrote:"Abysmal? He's the most proactive President since Clinton, and he's bringing much-needed change for the better to a nation that has been tyrannized by the worst President since Hoover."- 7 Wishes on Pres. Obama


How Wall Street Will Beat the New Financial Regulations
Published: Wednesday, 28 Jul 2010 | 10:15 AM ET
By: Jeff Cox
CNBC.com Staff Writer
Weep not for Wall Street: Even though the nation's big financial institutions will get hit by the new financial reform regulations, they already have begun figuring out ways around them and are setting the path for more profitability in the future.
The new law establishes tighter requirements for capital and restricts risk-taking. It also contains a significant consumer watchdog component and seeks to prohibit banks from becoming too big too fail.
But crafty financial veterans already are finding loopholes in the law and banks likely will profit both in spite of and because of the reforms.
"What the law did was force the banks to rethink their business lines, their pricing strategies, their methodology for maintaining their balance sheet," banking analyst Dick Bove of Rochdale Securities said in an interview. "When they rethink it all, they will be able to offset all of the costs of this bill."
The banks' course of action likely will break down into four strategies:
1. Outfox the foxes
A harsh critic of the law, Bove is among the analysts who nevertheless believe banks will thrive. One big reason is because he thinks industry executives will show that they're smarter than the legislators who crafted financial reform, also known as FinReg.
"If you had anyone who knew anything about the financial industry writing this law, that's one thing," said Bove, who has called the law one of the worst in US history. "But if you have a bunch of hysterics who were looking for political gain, you get something that was an abortion. All it did was increase the cost of banking in the United States relative to the cost of banking in other countries."
One of the loopholes will be challenging the government to decide what is "proprietary trading." Normally considered that trading which institutions do for their own benefit rather than their customers, observers have speculated the government will have a tough time enforcing an exact definition.
The same could go for the much-touted Volcker Rule—named after White House economic adviser and former Federal Reserve Chairman Paul Volcker—which restricts to 3 percent of Tier 1 capital the amount banks can hedge or put into private equity.
But Bove said banks like Goldman Sachs [GS 147.20 -0.03 (-0.02%) ] can sell private equity funds to a third party and then establish a management contract in which Goldman would run those funds and take a percentage of the increase in value "which presumably would be equal to the profit you were getting for holding the funds in the first place."
"Although banks will be limited in how much they can invest in the funds along side with investors, managing the fund is still expected to garner meaningful management and incentive income," analysts at Keefe, Bruyette & Woods wrote of the 3 percent restriction.
2. Going Overseas
As Bove stated, Congress enacted FinReg unilaterally—foreign banks don't have to abide by the US rules, and US banks doing business overseas also can skirt FinReg in certain instances.
"The US is the world's largest economy and has the largest and deepest capital markets. There's no way for any big bank to avoid the US," said Doug Landy, banking partner at Allen and Overy in New York. "But I think people are re-looking at what business they do here and what business they do elsewhere."
While banks will have to be cautious not to cross regulatory restrictions, Bove said there are plenty of ways for financial companies to take their business outside the US.
Under the new rules, "You run the risk of the Federal Reserve saying, 'You're interconnected, we're going to regulate you,'" he said. "Or you can do it through a consolidated subsidiary in Switzerland. Nobody sees it, so there's no regulation. So why should you do it here?"
3. Take it Out on the Customers
This is what Bove considers the most odious part of FinReg—the increased costs through regulation and restrictions will simply, he said, be passed onto customers.
Free checking will not exist anymore and customers likely will have to pay $10 to $12 a month to maintain their accounts, he said, meaning some on lower incomes may be forced to close their accounts.
He used Wells Fargo as an example of how banks will find numerous ways to pass costs onto customers.
"We have no doubt that the banks are actively looking at the best possible ways to rework their current business models to take advantage of inconsistencies in this legislation."
Doug Landy
Partner, Allen and Overy law firm
"Wells Fargo claims they have 86 specific businesses. That means there are about 80 businesses that they can increase prices and charges on, which they've already done" Bove said. "Wells Fargo has not been slow to make adjustments to its costs in order to make sure customers bear the burden of increases in regulatory costs."
A host of large banks already have warned that there earnings could be impacted by the new law.
"They're going to find more ways to make it. They're going to put more fees on customers," said Andrew Neale, partner at Fogel Neale Partners in New York. "That's obviously the first line of defense."
4. Be Big
Perhaps the great irony is that a bill designed to prevent banks from becoming too big to fail— a la Lehman Brothers and Bear Stearns—almost ensures the future of behemoth banks.
Banks that lack the capital to survive will be absorbed by their larger brethren, as has already happened 103 times in 2010. The financial crisis provided plenty of templates: JPMorgan Chase swallowed Bear Stearns and Washington Mutual; Bank of America took in Merrill Lynch; Wells Fargo ate up Wachovia.
"One unforeseen victor is banks are actually much bigger than they were five years ago. Rather than being broken apart, they're bigger and stronger," said Landy, of Allen and Overy. "What it leaves is a situation where you have six huge banks, a bunch of regional banks and thousands of small banks."
FinReg provides a resolution mechanism to seize and blow up banks that become too big to fail. But Wall Street is betting it stays at least a step ahead of the Washington regulators.
"We have no doubt that the banks are actively looking at the best possible ways to rework their current business models to take advantage of inconsistencies in this legislation," Landy said. "That's their job and that's what they're good at."

Seven Wishes wrote:"Abysmal? He's the most proactive President since Clinton, and he's bringing much-needed change for the better to a nation that has been tyrannized by the worst President since Hoover."- 7 Wishes on Pres. Obama

RedWingFan wrote:Obama's "woe as me" example of someone who's unemployment is about to run out is invited to the White House.
Turns out she's got a record and drug charges!
I swear I would love Obama if he didn't have the power to destroy the nation.
When asked whether there was a background check before her White House appearance, Gibbs said, "I don't know the specifics. Again, it's safe to say that had we known it, she wouldn't have been on stage."
The Secret Service suggested Macko was subjected to a background check but declined to offer specifics.
"We do not comment or confirm the existence of anyone's criminal history or lack thereof," agency spokesman Malcom Wiley said in a written statement. "Anyone who is granted access to the White House or any venue that we protect does so only after an assessment of dangerousness is made."

donnaplease wrote:
It looks like someone is lying. Either the SS didn't do a background check, or the Obummer administration did know about the convictions.
I can't believe the repeated blunders by this bunch. They are making the office of the presidency look like a running joke. It's so sad.

Rockindeano wrote:donnaplease wrote:
It looks like someone is lying. Either the SS didn't do a background check, or the Obummer administration did know about the convictions.
I thought Conservatives were above name calling?
Rockindeano wrote:donnaplease wrote: I can't believe the repeated blunders by this bunch. They are making the office of the presidency look like a running joke. It's so sad.
Fair enough. They have definitely made their fair share of blunders and there is no defending it nor should there even be an attempt at it. However, isn't also fair to say that the Bush Administration had it's share of blunders, yet I never heard this type of comment from you while they were in the White House.Care to comment? The really sad thing is Obama is still learning the intracacies of presidential politics, and should get better as time goes on. What was Bush's excuse, eight years into the game, he was still making a complete ass of himself and his administration was the ultimate description of "Joke."
I'll do you a favor and change the topic ever so slightly. Blunders aside, what is your game plan now that the economy has grown by. 2.4% for the 2nd Q, and is slowly strengthening overall, without zero help from YOUR party. Granted, 2.4% is below predictions, but it is still positive. What kind of tactic will the GOP try to employ to slow down the economy enough so they may get the House back? And if they don't, and I now don't think they will, what will the plan be for the next two years until 2012? Say 'no' again and again? Block more unemployment benefits legislation? Block the jobs bill again? What if Reid keeps them in Congress to get the Jobs bill done? What will the conservatives do? I mentioned to TNC a couple of weeks ago that why do the republicans even bother to show up to the Senate? They just vote no anyway. If Reid keeps them in DC, I can see republicans just leaving and going home to campaign. I am telling you, if the GOP was in the Dems shoes right now, they would kick ass. They would drive bills trough with or without the Dems help. The Dems need a backbone. If they ever develop one, the GOP is really going to be screwed.
I am interested in your comments donna.



donnaplease wrote:
I can't speak to specific blunders nor how/why I did or didn't respond though, because I can't really recall anything like this happening.
And honestly, it doesn't really mean a whole lot in the grand scheme of things, it's just another indicator to ME that this guy has character issues, something I have said repeatedly since he began his presidential campaign.
Your comment about Obummer 'still learning the intracacies of presidential politics' both makes me chuckle and scares me at the same time. While no one can know exactly what is expected of a president until they put on those shoes, these are issues that you or I should know... don't parade someone out into public and use them to gain political points if they have anything in their background that could come back to bite you. That has to be in politics 101.
I have no game plan, Dean. I don't have the least idea what to suggest, I'm not a politican or an economist.
The dems in Congress don't need a backbone, they have no problem standing up for their perspective, and calling out whoever is standing in their way. What they need is courage of their convictions. I don't believe they will 'grow' a backbone because they spend so much time attacking their opponents that that's all they know how to do.
Obummer only knows how to campaign, and that's all he's done since January, 2009. He is no leader. He's a community organizer, a little boy wearing his daddy's shoes and playing grown up. Every day he's proving that he is just that little boy, though, and not prepared for the real world.
Now, let me ask you something... How do YOU defend the idea that July is now known as the deadliest month in the history of the Afghanistan War? Even worse than all those months when Bush "took his eye off the main prize" and ignored the 'legitimate' war. A few months ago we heard a similar thing about the casualties. Perhaps our commander in chief should worry more about that than his trips to The View to chat with Joy Behar.![]()
One more thought... I have determined that Obummer's contention that he has "created or saved" jobs is pretty much equivalent to Bush saying "What do you mean I didn't do more to prevent 9/11? My actions prevented or saved thousands more from being killed. It could've been worse." Maybe he should just take credit for the plane going in Pennsylvania too. Never mind that it had nothing to do with him but instead those great heroes that actually did it, he should just take credit for it anyway.Created or saved my ass...

Rockindeano wrote:Blah, blah, blah...

donnaplease wrote:Rockindeano wrote:Blah, blah, blah...
What else you got? Nanny-nanny boo-boo...?
I know who Valerie Plame is, and I remember some of what happened.
Seven Wishes wrote:"Abysmal? He's the most proactive President since Clinton, and he's bringing much-needed change for the better to a nation that has been tyrannized by the worst President since Hoover."- 7 Wishes on Pres. Obama

donnaplease wrote:You of all people have no room to talk about anything regarding convictions. You have repeatedly said here that the democratic congress should just "ram it through" and not try to have bipartisanship in passing legislation.
Rockindeano wrote:Whatever it takes. It's a bloody game. Turn about is fair play. You had 8 of the most corrupt years ever. Now you get to watch as karma comes back to bite your asses. Pelosi will get her votes.
conversationpc wrote:donnaplease wrote:You of all people have no room to talk about anything regarding convictions. You have repeatedly said here that the democratic congress should just "ram it through" and not try to have bipartisanship in passing legislation.
Reminds me of what he said to me back in March of this year...Rockindeano wrote:Whatever it takes. It's a bloody game. Turn about is fair play. You had 8 of the most corrupt years ever. Now you get to watch as karma comes back to bite your asses. Pelosi will get her votes.
I don't EVER want legislation to be passed in this manner. If it can't be passed legitimately, it shouldn't be passed at all. Typically, that means it probably wasn't all that good a bill in the first place. It doesn't matter to me if the Repubs or Dems do it. See, the problem is, when the party in power does business this way, they end up getting bitten in the ass because the other party will inevitably come to power again and do the exact same thing in return. It's a vicious cycle that needs to be broken. When the Repubs take power back in November or whenever it happens, I don't want to hear the libs who've been cheering the Dems on crying about it unless they had the cojones to stand against it now.


Rockindeano wrote:I stand firmly behind the Healthcare bill and how it was passed. Ram it through. Hey, the Dems tried, and tried, and tried to get GOP interest and input, but when all they heard was 'no' no and no, it became clear that they couldn't be counted on, except the two Maine republicans(Susan Collins and Olympia Snowe). The GOP has NO intention of ever joining in on bi partisan legislation. Hell, they can't wait to repeal everything. So, screw you. Elections have consequences.
...Please Dave, explain to me how legislation passed in the H/C bill was in a manner you don't see as legit? Scoreboard. You lost, get over it.
By the way Dave, LOL, you aren't getting power back anytime soon. There's no way the GOP can win 38-39 seats back in order to take back the House. Good luck with that.
conversationpc wrote:BTW...What numbskull is causing the page to stretch? I really hate having to use a scrollbar to read a post.

Rockindeano wrote:2- I think it is your avatar that is causing the stretch. Delete it and see if it fixes itself.
Rockindeano wrote:No seriously, it is the biggest one here..has to be yours.
conversationpc wrote:Rockindeano wrote:No seriously, it is the biggest one here..has to be yours.
It was Slucero's chart. Actually, AlteredDNA's av is wider than mine.

donnaplease wrote:conversationpc wrote:Rockindeano wrote:No seriously, it is the biggest one here..has to be yours.
It was Slucero's chart. Actually, AlteredDNA's av is wider than mine.
Oh my, here we go...
"Mine is bigger than yours is..."
conversationpc wrote:donnaplease wrote:conversationpc wrote:Rockindeano wrote:No seriously, it is the biggest one here..has to be yours.
It was Slucero's chart. Actually, AlteredDNA's av is wider than mine.
Oh my, here we go...
"Mine is bigger than yours is..."
Bah, that doesn't matter to me. I don't have to argue...I already KNOW mine is bigger.

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