No proprietary trading for banks

[Benton D Struckcheon]

Well said, Sir.

The knees of government jerk again

This is a form of the return of Glass-Steagall.
Volcker was smiling. It was hardly a knee jerk: he's spent all of his time for a year promoting a return to the restrictions of Glass-Steagall.
Personally, I hope it happens. This blowup was almost exactly the same as the one that caused the Great Depression; it was not unrelated to any that came before it.
Look up "Bank of United States", and note that its failure in 1931 and the consequences of it were eerily similar to what happened to Lehman last September.
The knees that are jerking here are the ones blaming this sell-off on Obama, by the way: even if you want to locate the cause of this sell-off in politics, of equal importance is the news that the Senate may not re-confirm Bernanke.
Two Republican senators want a bill to audit the Fed to pass first, and some Dems decided to make noise on this on Friday.
This is definitely a prime example of an old boss of mine's favorite saying: "No good deed goes unpunished."

 

[oildaytrader]

Well said, Sir.

The knees of government jerk again

Really?The same problems leading to the 1920s money supply existed in the year 2,007.
The federal reserve was created in 1913 ,it started increasing the money supply which lead to the stockmarket bubble and the 1928 crash.The same money supply problem was created by the incompetent and irresponsible federal reserve.

Austrian school of economist blamed the federal reserve for the depression in the thirties.The key cause of the Depression was the expansion of the money supply and credit expansion in the 1920s that led to an unsustainable boom. In our view, the Federal Reserve, created in 1913, and which is not a federal bank but a private club of wealthy bankers was the main cause of the depression.

http://en.wikipedia.org/wiki/Glass–Steagall_Act

http://www.aier.org/research/briefs/667-the-financial-bubble-was-created-by-central-bank-policy

Criminal Rothschilds

Most of you haven't got got the foggiest what the problem was?

 

[virtuos0]

This is a form of the return of Glass-Steagall.
Volcker was smiling. It was hardly a knee jerk: he's spent all of his time for a year promoting a return to the restrictions of Glass-Steagall.
Personally, I hope it happens. This blowup was almost exactly the same as the one that caused the Great Depression; it was not unrelated to any that came before it.
Look up "Bank of United States", and note that its failure in 1931 and the consequences of it were eerily similar to what happened to Lehman last September.
The knees that are jerking here are the ones blaming this sell-off on Obama, by the way: even if you want to locate the cause of this sell-off in politics, of equal importance is the news that the Senate may not re-confirm Bernanke.
Two Republican senators want a bill to audit the Fed to pass first, and some Dems decided to make noise on this on Friday.
This is definitely a prime example of an old boss of mine's favorite saying: "No good deed goes unpunished."

Again, any real detail is sorely lacking, but as far as I can see it's a hugely diluted Glass-Steagall. In fact it appears to be so diluted that it's akin to a homeopathic medicine!

The fact that Obama has come out in favour of Bernanke makes me suspect that he will be reconfirmed. I think Geithner will be the fall guy here, and I also suspect he was always intended to be.

Every blowup is the same as the last because our monetary system is fundamentally unsound and unsustainable! Fiat money, endless government intervention, central banks, never-ending inflation, continuously falling interest rates, massive trade imbalances, epic corruption, and so on! The more you know about the world of finance the more scared you get.

 

[virtuos0]

Really?The same problems leading to the 1920s money supply existed in the year 2,007.
The federal reserve was created in 1913 ,it started increasing the money supply which lead to the stockmarket bubble and the 1928 crash.The same money supply problem was created by the incompetent and irresponsible federal reserve.

Austrian school of economist blamed the federal reserve for the depression in the thirties.The key cause of the Depression was the expansion of the money supply and credit expansion in the 1920s that led to an unsustainable boom. In our view, the Federal Reserve, created in 1913, and which is not a federal bank but a private club of wealthy bankers was the main cause of the depression.

http://en.wikipedia.org/wiki/Glass–Steagall_Act

http://www.aier.org/research/briefs/667-the-financial-bubble-was-created-by-central-bank-policy

Criminal Rothschilds

Most of you haven't got got the foggiest what the problem was?

If you just talk about Austrian economics, and forget the Rothschild/illuminati conspiracy crap then you might be taken seriously. I assume you have actually read Mises/Rothbard? It's sad that Rothbard isn't alive today to comment on these events unfolding, would be fascinating to get his perspective.

 

[Benton D Struckcheon]

Again, any real detail is sorely lacking, but as far as I can see it's a hugely diluted Glass-Steagall. In fact it appears to be so diluted that it's akin to a homeopathic medicine!

The fact that Obama has come out in favour of Bernanke makes me suspect that he will be reconfirmed. I think Geithner will be the fall guy here, and I also suspect he was always intended to be.

Every blowup is the same as the last because our monetary system is fundamentally unsound and unsustainable! Fiat money, endless government intervention, central banks, never-ending inflation, continuously falling interest rates, massive trade imbalances, epic corruption, and so on! The more you know about the world of finance the more scared you get.

Nah, James Grant has it right on this: there's really nothing new in the world of finance, and all that happens is that folks get overconfident, fall for some "new new" thing, and get fleeced. Been happening since the Dutch tulip mania, at least.
I'm sure you've read "Extraordinary Popular Delusions and the Madness of Crowds"? The only difference between the bubbles described there and the ones we just went through were the get rich quick schemes being flogged, although the funniest page in that book describes the first blind pool ever foisted on an unsuspecting world, and that one just keeps coming back every time folks let their guard down. Then, just like now, the really big bubbles wound up seducing everyone.

 

[montmorencyt2w]

"A fool and his money are soon parted"

"You cant cheat an honest man"

.....etc.

*sigh*

 

[Benton D Struckcheon]

Also, thinking about the "homeopathic" part, I think people are grossly underestimating the impact, not on banks, but on the market.
A large part of what has gone wrong in the last 20 or maybe even 30 years is the growth of leveraged buyouts, which is what "private equity" is all about. I've never seen the logic of this kind of thing, and anything that restricts it is a good thing, in my opinion. LBOs, like blind pools, tend to get done later in the cycle, when people start getting overconfident. Then when the cycle turns down, these things go sour, and folks get thrown out of work because all of a sudden we see that these companies can't carry the debt load that the LBOs done on them put on their backs.
Federally subsidized banks should certainly not be in this so-called "business".

 

[oildaytrader]

Also, thinking about the "homeopathic" part, I think people are grossly underestimating the impact, not on banks, but on the market.
A large part of what has gone wrong in the last 20 or maybe even 30 years is the growth of leveraged buyouts, which is what "private equity" is all about. I've never seen the logic of this kind of thing, and anything that restricts it is a good thing, in my opinion. LBOs, like blind pools, tend to get done later in the cycle, when people start getting overconfident. Then when the cycle turns down, these things go sour, and folks get thrown out of work because all of a sudden we see that these companies can't carry the debt load that the LBOs done on them put on their backs.
Federally subsidized banks should certainly not be in this so-called "business".

The mergers and acquisitions over the last 30 years have had no overall benefits,they were designed for wealth creation for a few,none other than investment bankers and their bonuses.

 

[oildaytrader]

If you just talk about Austrian economics, and forget the Rothschild/illuminati conspiracy crap then you might be taken seriously. I assume you have actually read Mises/Rothbard? It's sad that Rothbard isn't alive today to comment on these events unfolding, would be fascinating to get his perspective.

The problem is the money supply.Here is a great article.

Hardly any economists in America anticipated that price-level stabilization during the 1920s would lead to the economic depression that began in October 1929. One of the few who saw a danger in this policy of the Federal Reserve System was Benjamin M. Anderson. As the senior economist for the Chase National Bank of New York City throughout this period, Dr. Anderson authored The Chase Economic Bulletin, which was usually published four to five times every year. He offered detailed analyses of the economic currents in the United States, with special attention to monetary and banking policy and its likely effects on general market conditions. He also often critically evaluated the theories underlying Federal Reserve policy, most particularly the notion of stabilizing the price level as a guide for economic stability.

More.....

http://www.fff.org/freedom/0497b.asp

 

[chilltrader]

This proposal would prohibit banks from running proprietary trading operations solely for their own profit and sponsoring hedge funds and private equity funds. How this will change the trading enviroment in the future ?

http://www.bloomberg.com/apps/news?p...d=aGwoMdcKbVFk

http://en.wikipedia.org/wiki/Proprietary_trading

Excellent news!

There will be a lot protests from w@nkers who promote so much self-importance about things which are in effect really useless for overall society....

Mostly w@nkers and hedges crying out that the worst will happen! "If we don't do business our way the world will fall apart, the sky will surely fall !!"

It will be nice to see that it didn't really matter after all

 

[oildaytrader]

the funniest page in that book describes the first blind pool ever foisted on an unsuspecting world, and that one just keeps coming back every time folks let their guard down. Then, just like now, the really big bubbles wound up seducing everyone.

Isn't this " pools of capital" Goldman Sachs refer to, and the ones the receivers blame the rating agencies for ,the very same rating agencies they bribe on their payrolls to give triple aaa ratings to junk bonds?

The institutions gave money to these blind pools on Wall street.

45 percent of world's wealth destroyed: Blackstone CEO

http://www.reuters.com/article/idUSTRE52966Z20090311

 

[robster970]

Call me cynical but the only things I can predict with some certainty are:

Politicians will always make public declarations and policy based upon keeping them in power, whether than power is derived from the public, the wealthy or both. Right now the public view prevails.

Capitalism will morph in the way that it has done for many years to fit in with socio-political environment and continue to find ways to make the wealthy more wealthy in a 'socially acceptable' way. This is why Capitalism survives and Socialism does not. Socialism as an ideology cannot adapt.

As long as humans exist, greed will prevail.

As long as power structures such as democracy exist, power will corrupt and absolute power will corrupt, absolutely.

Banks/HF's will find other ways to generate 'obscene profits'.

Plus ça change, plus c’est la même chose.

 

[Splitlink]

Aren't the banks shareholders of most of our PLCs?

If that is the case, I fail to see whether that fact will continue if they are unable to hedge their investments at times.

This Obama plan is fraught with dangers and needs a lot of fine tuning..

He is catering to popular opinion. His phrase " if they want a fight, they'll get one" proves that.

 

[virtuos0]

Also, thinking about the "homeopathic" part, I think people are grossly underestimating the impact, not on banks, but on the market.
A large part of what has gone wrong in the last 20 or maybe even 30 years is the growth of leveraged buyouts, which is what "private equity" is all about. I've never seen the logic of this kind of thing, and anything that restricts it is a good thing, in my opinion. LBOs, like blind pools, tend to get done later in the cycle, when people start getting overconfident. Then when the cycle turns down, these things go sour, and folks get thrown out of work because all of a sudden we see that these companies can't carry the debt load that the LBOs done on them put on their backs.
Federally subsidized banks should certainly not be in this so-called "business".

I think where we differ is that I don't have faith in the current US administration, and in fact I have no faith in government in general. I actually happen to think that banks should essentially be no more than 'money warehouses' where the commodity of money is simply stored, and a fee charged for that storage. Then there is nothing stopping other separate institutions from being 'loan companies' or 'speculation companies'. This would only really be achieved by doing away with central banking and fractional reserve banking as a whole. Anything that stops short of the complete destruction of he fractional reserve concept and central banks is just papering over the cracks.

 

[virtuos0]

Call me cynical but the only things I can predict with some certainty are:

Politicians will always make public declarations and policy based upon keeping them in power, whether than power is derived from the public, the wealthy or both. Right now the public view prevails.

Capitalism will morph in the way that it has done for many years to fit in with socio-political environment and continue to find ways to make the wealthy more wealthy in a 'socially acceptable' way. This is why Capitalism survives and Socialism does not. Socialism as an ideology cannot adapt.

As long as humans exist, greed will prevail.

As long as power structures such as democracy exist, power will corrupt and absolute power will corrupt, absolutely.

Banks/HF's will find other ways to generate 'obscene profits'.

Plus ça change, plus c’est la même chose.

Couldn't agree more! Inflation seems to be the main scheme to achieve this transfer of wealth, I wonder how many people actually have a clue that they are getting bent over and f*cked by inflationary government policy?

 

[robster970]

Couldn't agree more! Inflation seems to be the main scheme to achieve this transfer of wealth, I wonder how many people actually have a clue that they are getting bent over and f*cked by inflationary government policy?

It's incredible how most people don't realise this isn't it.

 

[barjon]

Also, thinking about the "homeopathic" part, I think people are grossly underestimating the impact, not on banks, but on the market.
A large part of what has gone wrong in the last 20 or maybe even 30 years is the growth of leveraged buyouts, which is what "private equity" is all about. I've never seen the logic of this kind of thing, and anything that restricts it is a good thing, in my opinion. LBOs, like blind pools, tend to get done later in the cycle, when people start getting overconfident. Then when the cycle turns down, these things go sour, and folks get thrown out of work because all of a sudden we see that these companies can't carry the debt load that the LBOs done on them put on their backs.
Federally subsidized banks should certainly not be in this so-called "business".

Yes, I've never really been able to get my head round the concept of effectively buying a company with its own money,

Take Manchester United as an example. How a couple of guys can breeze in, buy the club and lay the debt on the club is beyond me. If ManU sink under the weight of that debt (do I hear some cheers ) the Glazers will be unscathed and walk away with the millions they have taken out of the club - mmmm.

cheers

jon

 

[Splitlink]

what is worse, or better for them, is that they will not have to face British public opinion. Maybe we should try to buy the Yankees. I'll bet that that would never happen.

 

[oildaytrader]

Couldn't agree more! Inflation seems to be the main scheme to achieve this transfer of wealth, I wonder how many people actually have a clue that they are getting bent over and f*cked by inflationary government policy?

Could you please elaborate the mechanism being used to transfer the wealth.

How come house prices are 30 times hat they were 30 years ago, yet there is no inflation in the system?

We are getting f*tcked on state pensions.We were a promised a means tested pension , equivalent to £15,000 a year today(we get £5,000), my son is getting into debt at university (fees used to come out of my taxes),unemployment benefits are now means/savings tested (they were an entitlement as long as you paid N I),Dentists bills were paid from N I contributions and school dinners were free(the only things were going to school for).

 

[Splitlink]

Yes, advice to a son should be "For God's sake, don't save your money in a bank account".