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Jun 19 2017 09:38pm
My thoughts? Franking your dodd once or twice is fine
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Jun 20 2017 06:58am
Quote (Santara @ Jun 19 2017 10:35pm)


Regarding the first source, I know that group and they're one of the groups that got called out for saying there was too much regulation in 2007 preventing capital growth, then the blocks fell, then they backtracked and said, no no we meant that the regulations were too confusing not that there were too many, or some shit like that. So they call out regulators for protecting their turf and covering their asses, but they did the same thing. They mention derivative trading twice and they say that Dodd-Frank doesn't address derivative trading, but they do. Dodd-Frank even goes specific enough in the law to mention forms of derivative trading that need specific oversight like credit default swaps. The guy in this article gives generic answers that are just repeating "the regulations are too complex, we need to have corrected regulations to drive the economy forward, bla bla bla." However, he doesn't even give any examples of specific changes, though he can whine about how Dodd-Frank doesn't? The guy also says there are overlapping agencies, which there are, on purpose. Dodd-Frank did that because the solo agencies were either fucking up or getting paid off and needed oversight. The US trusts agencies like Moodys and S&P to give ratings, but clearly they falsified them over and over, so yeah we need overlapping institutions to blow the whistle, that's the whole point. The guy's best point is that they need to collaborate and communicate better so that everyone is speaking from 1 voice and not having 1 person say left and the other saying go right and the bank not knowing what they should do. Dodd-Frank actually does address a lot of specifics, it's just 3000 pages and complex. You have to pick, do you want a super long and complex law that addresses lots of specifics, or do you want a simpler version that leaves it open to interpretation? Can't have it both ways. Obviously, with a massive law, there are going to be tons of things that are stupid or nitpicky within it, just like Obamacare or any other major legislation. As a whole, Dodd-Frank is actually pretty good.

Regarding the Bloomberg article by Shipley, it's just so generic and wrong in a few ways. He mentions the capital requirement of $5 for every $100 in assets so they can absorb a 5% loss and says it's not enough. That is so ridiculous. Of course it isn't enough, but he fails to realize that it's a balance. If they had said $10 for every $100 in assets, the banks would've gone nuts and it probably would've held back growth. 5% is actually a lot better, so I don't get why he has his panties in a bunch over it. Regarding him saying their "early warning system" is insufficient. Yeah, probably fair, but again, it's at least better than not having one at all. You either have to pour money into the SEC and do it right and make regulations harsh, or allow for some looseness.

The government actually tried to be kinda fair and allow for some looseness so that the banks would do right by them. For the most part the banks have done better. Without a doubt, tranche funds similar to the CDOs of the mid 2000s absolutely still exist, mortgages to the poor are becoming easier, and that's frustrating. However, it's always a balance. You have to allow for some growth, it just needs to be maintained. In the mid 2000s GWB was on his "everyone should own a home" rampage, and was backed by the democrats because of course they support something that helps the poor. GWB made it so banks didn't "discriminate" against the poor (and often black) community. Sell them houses, it's the American way right? Government fucked up both from the left and the right on that one.

Anyways, that's my take. Dodd-Frank isn't great, but it doesn't suck. Changes would be good of course because it's been years and we now know where a lot of the gaps are in the law. It should definitely be reviewed and revised, but to say it's done nothing is just incorrect.
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Jun 20 2017 06:59am
They need to repeal the Financial securities and moderization act of 1999, aka GLBA.
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Jun 20 2017 07:08am
Quote (Skinned @ Jun 20 2017 07:59am)
They need to repeal the Financial securities and moderization act of 1999, aka GLBA.


I don't necessarily disagree, but why? There are hundreds of pieces in that act, which do you see the biggest problems with? I assume you mean the fact that commercial, investment, real estate, debt collectors, insurance companies, etc., were allowed to merge. Such as Citi and Travelers.

That part is tough for me because the plus is that they are less likely to fail because if one area of their business does bad, they can lean on the other. It also makes it easier for customers to just deal with 1 company to do all their investing, banking, insurance, annuities, etc.

On the other side of course, they're fucking huge and that's really dangerous. Obviously, this was taken a step further in 2008 by merging commercial and investment banks straight up.

This post was edited by AspenSniper on Jun 20 2017 07:12am
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Jun 20 2017 07:33am
Quote (AspenSniper @ Jun 20 2017 08:08am)
I don't necessarily disagree, but why? There are hundreds of pieces in that act, which do you see the biggest problems with? I assume you mean the fact that commercial, investment, real estate, debt collectors, insurance companies, etc., were allowed to merge. Such as Citi and Travelers.

That part is tough for me because the plus is that they are less likely to fail because if one area of their business does bad, they can lean on the other. It also makes it easier for customers to just deal with 1 company to do all their investing, banking, insurance, annuities, etc.

On the other side of course, they're fucking huge and that's really dangerous. Obviously, this was taken a step further in 2008 by merging commercial and investment banks straight up.


The main problem with too big to fail is that the top people on wall street know they won't ever be held accountable for potentially heinous financial decisions unless they go full Bernie Madoff.

Maybe if we actually prosecuted people on wall street for financial fraud , too big to fail wouldn't be as dangerous to collapsing the economy if people knew they be risking many years for heinous acts leading to economic collapse.
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Jun 20 2017 08:20am
Quote (sir_lance_bb @ Jun 20 2017 08:33am)
The main problem with too big to fail is that the top people on wall street know they won't ever be held accountable for potentially heinous financial decisions unless they go full Bernie Madoff.

Maybe if we actually prosecuted people on wall street for financial fraud , too big to fail wouldn't be as dangerous to collapsing the economy if people knew they be risking many years for heinous acts leading to economic collapse.


100% agree. The government played like a bunch of pussies in 2008-2009. Instead of jailing these people, we fined them and supported their banks because overall it's better for the economy in the short term to protect against a crash. That was successful, so congrats, but for the long term it's not good. Had we let the banks fail, the dow today would probably be floating under 10k instead of 20k and that's a bummer, but it'd send the RIGHT message and improve our economy moving forward.

That being said, the theory is that the government says, we're bailing you out, but we won't bail you out again so you better make sure your shit is solid. That's the theory :)
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