More BuShit and DC Economic Toxic Trash!

Today the US Government dumped some more toxic diversionary smoke screen trash on America.

What has been proposed is a worthless compilation of 218 pages pre-crisis working paper dealing with consolidation of regulatory agencies, having nothing to do with increased regulation and more stringent oversight. It is a jump ball in a game that will be played by the next Congress, the next administration, and even if it were adopted immediately it would do nothing to solve this nation’s current crisis. It would simply consolidate power under the watchful eyes of fewer eyes….BIG EYES!

It was an attempt to serve up some public economic Valium, create some confidence that someone “important” was doing something “significant” to help the average American facing foreclosure , drowning in credit card debt, depositing their first born at the gas pump as payment, torn between buying frozen meals and paying for medications. Hell when are we going to get real about solving real problems with real solutions instead of attempting to stop arterial hemorrhaging with Johnson’s Band-Aids, smoke and mirrors, posturing and pretense?

Treasury spells out regulatory overhaul plan

Treasury Secretary Henry Paulson revealed sweeping plans on Monday for streamlining a hodgepodge of regulations that are blamed for allowing the U.S. mortgage crisis to balloon into a full-blown economic threat.

The proposals, in the form of a 218-page "blueprint" that was started before markets unraveled in August, offer no quick fix for the credit contraction that threatens to tip the U.S. economy into recession.

Under the proposals, the current patchwork of as many as seven federal regulators would be consolidated under three agencies: the U.S. Federal Reserve, a newly created financial regulator and a third agency for consumer protection and business practices.

Paulson acknowledged that most of the proposals would not be enacted until after the current troubles had passed, perhaps long after President George W. Bush leaves office in January.

The regulatory blueprint proposes eventually vesting new powers in the Federal Reserve as a "market stability regulator" -- effectively formalizing a role the central bank already has adopted recently by expanding the list of financial firms which can borrow directly.

It would give the Fed authority to demand that all financial system participants supply it with full information on their activities and grant the Fed a right to collaborate with other regulators in setting rules for their behavior.

The Bush administration has faced political pressure from critics who blame lax regulatory oversight for the mortgage mess. Paulson, a 30-year Wall Street veteran, stressed that regulation must be light enough to keep markets innovative, and said those who tried to label the blueprint as advocating more or less regulation were "oversimplifying."

"I am not suggesting that more regulation is the answer, or even that more effective regulation can prevent the periods of financial market stress that seem to occur every five to 10 years," he said.

A Nervous Wall St. Seems Unsure What's Next

Treasury Secretary Paulson urges more power for Federal Reserve

By MARTIN CRUTSINGER, AP Economics Writer 1 hour, 4 minutes ago

WASHINGTON - The Bush administration Monday proposed the most far-ranging overhaul of the financial regulatory system since the stock market crash of 1929 and the ensuing Great Depression.

The plan would change how the government regulates thousands of businesses from the nation's biggest banks and investment houses down to the local insurance agent and mortgage broker.

Treasury Secretary Henry Paulson unveiled the 218-page plan in a speech in Treasury's ornate Cash Room, declaring, "A strong financial system is vitally important — not for Wall Street, not for bankers, but for working Americans."

The administration's plan drew criticism, however, from Democrats who said it did not go far enough to deal with abuses in mortgage lending and securities trading that were exposed by the current credit crisis. Some state officials criticized what they saw as unwanted federal intrusion on their turf.

Massachusetts Secretary of the Commonwealth William F. Galvin blasted Paulson's approach as "a disastrous backward step that would put the investor in jeopardy" because it would pre-empt state regulation of securities and insurance.

The administration said that it planned to work with Congress to have constructive conversations, but officials would not predict when any aspects of the proposal could be enacted into law.

Asked if Bush's goal was to get the overhaul approved before he leaves office, presidential press secretary Dana Perino told reporters aboard Air Force One, "We'll have to see. It is a big attempt."

The plan, which would require congressional approval for its biggest changes, seeks to trim a hodge-podge collection of overlapping jurisdictions that date back to the Civil War.

It would give the Federal Reserve more power to protect the stability of the entire financial system while merging day-to-day bank supervision into one agency, down from five at present.

It also would create one super agency in charge of business conduct and consumer protection, performing many of the functions of the current Securities and Exchange Commission.

It would propose eliminating the Office of Thrift Supervision and the Commodity Futures Trading Commission, merging their functions into other agencies.

It would ask Congress to establish a federal Mortgage Origination Commission to set recommended minimum licensing standards for mortgage brokers, many of whom now operate outside of federal regulation, and it would also take a first step toward federal regulation of the insurance industry by asking Congress to establish an Office of Insurance Oversight inside the Treasury Department.

Paulson acknowledged in his remarks that most of the changes will not occur until after a lengthy debate in Congress, leaving it to the next administration to deal with the biggest changes proposed by the report. He also said the Bush administration's focus would remain on getting through the current severe credit crisis, which has roiled financial markets since last August.

Paulson rejected Democratic charges that it was lax regulation of mortgage brokers and the financial industry that had led to the current problems.

"I do not believe it is fair or accurate to blame our regulatory structure for the current market turmoil," he said. "I am not suggesting that more regulation is the answer or even that more effective regulation can prevent the periods of financial market stress that seem to occur every five to 10 years."

Sen. Charles Schumer, D-N.Y., said he strongly disagreed with Paulson. "The unregulated corners of our economy did much to contribute to the meltdown in our housing market and the accompanying spillover to our financial markets," Schumer said in a statement. "The administration's 'deregulation-above-all-else' attitude helped cause the problems we now face."

Banking groups raised strong objections to the plan while other groups expressed approval.

"Dismantling the thrift charter and crippling state banking charters will weaken banking in America," said Edward Yingling, president of the American Bankers Association.

Tim Ryan, head of the Securities Industry and Financial Markets Association, which represents more than 650 securities firms, banks and asset managers, praised the overhaul proposal and said there was widespread agreement on the need for modernization in an era "where billions of dollars race across the globe with the click of a mouse."

In Congress, House Financial Services Committee Chairman Barney Frank, who is working on his own regulatory revamp, called Paulson's proposal a "constructive step forward" but said it wouldn't give the Federal Reserve enough authority to carry out its expanded job to police the stability of the entire financial system.

Many Democrats said that Congress' first priority should be to deal with the current mortgage crisis that is threatening millions of Americans with the loss of their homes and that an extensive debate on a regulatory overhaul should not occur until a new president is in office next year.

Senate Banking Committee Chairman Christopher Dodd, D-Conn., told reporters that he viewed the administration's plan as a "wild pitch — it's not even close to the strike zone" of what is needed to help the country get through the current mortgage crisis. He said the real problem was not the need for new regulations but "the failure of this administration to utilize the tools they've been given over the years to deal with the very practices that caused this problem."

The proposed overhaul would be the most extensive since the current regulatory system was created in response to the 1929 stock market crash and the Great Depression.

It comes at a time when the financial system faces its most severe credit crisis in two decades, one that has resulted in billions of dollars of losses for big banks and investment houses and the near-collapse of Bear Stearns, the country's fifth-largest investment bank.

The rising tide of bad debt has made it harder for consumers and businesses to get credit, further weighing on an economy struggling with a prolonged housing slump and soaring energy prices. Many economists believe the country is already in a recession.

WASHINGTON (Reuters) - The Democratic chairman of the U.S. Senate Banking Committee on Monday called the Treasury Department's plan to overhaul financial regulation "a wild pitch ... It's not even close to the strike zone."

Sen. Christopher Dodd of Connecticut said he welcomed the plan put forward by Treasury Secretary Henry Paulson but questioned its relevance in addressing the immediate housing market crisis threatening to tip the economy into recession.

"To talk about overhauling the regulatory system is a wonderful idea. But frankly it doesn't relate to the issues we're grappling with," Dodd told reporters on a conference call. "I would call this a wild pitch," he said. "It's not even close to the strike zone."

Could the Bush Recession Turn Into the Bush Depression?

I don't know anyone who thinks we're not in a recession and I don't know anyone who says we're on the brink of a Depression. Most people have no reason to think we won't have a Depression; they just think "it can't happen here" or "now" or "to me." It shouldn't either. Nor should have George Bush. The most unlikely of morons to assume the presidency he's done everything that anyone could do to bring on a financial calamity. This morning's Paul Krugman column, Partying Like It's 1929, gets right to the point: right wing ideology is toxic. The "banking crisis of the 1930s showed that unregulated, unsupervised financial markets can all too easily suffer catastrophic failure." Krugman claims the hard-learned lessons were "forgotten" as the decades passed. I'm less generous. (MORE HERE)

A plan to be unveiled Monday would give the Fed new power and fold oversight authority now shared by many agencies into three.

By Maura Reynolds, Los Angeles Times Staff Writer March 29, 2008

WASHINGTON -- The Bush administration is proposing a sweeping overhaul of the nation's financial regulatory system, combining what is now an alphabet soup of government agencies into three streamlined regulators.

The proposal is the result of a year of study by Treasury Secretary Henry M. Paulson Jr. and has the support of the president, according to Treasury officials who spoke on condition of anonymity Friday.

Under the administration's plan, which will be released in detail Monday, the Federal Reserve would get expanded power to promote stability in financial markets.

The Securities and Exchange Commission and a handful of other federal agencies -- all formed in the Great Depression or earlier -- would be restructured and have their responsibilities redefined.

Oversight of the mortgage industry would be stepped up, and states could lose some of their authority to regulate banks.

The aim of the realignment is to better oversee the financial markets and the banking system as they have evolved since the 1930s -- and avoid the kind of upheaval seen in recent months.

An outline of the proposal, first reported by the New York Times late Friday and confirmed by Treasury officials, includes short-, intermediate- and long-term changes in the country's regulatory structure.

Paulson's review began before the sub-prime mortgage crisis and subsequent financial market turmoil, but it was given new import by the near-collapse of investment house Bear Stearns Cos. and the Federal Reserve's decision two weeks ago to temporarily extend its lending to include investment firms as well as banks.

Many if not most of the changes would need congressional approval, which is far from certain. Both houses of Congress are controlled by Democrats, and this is a presidential election year, so any changes could take years.

Still, at least one Democratic leader expressed support for the administration's goals, if not necessarily its specific proposals.

"In broad outlines, we agree with large parts of Secretary Paulson's plan," said Sen. Charles E. Schumer (D-N.Y.), a member of the Senate leadership who is also chairman of Congress' Joint Economic Committee. "He is on the money when he calls for a more unified regulatory structure, although we would prefer a single regulator to the three he proposes."

Schumer also complained that the administration proposal did not appear to address the full spectrum of complex new financial securities, including so-called collateralized debt obligations, or CDOs, which repackage assets such as mortgages for sale to investors.

Losses on such securities have cost Wall Street firms billions of dollars and made them and other institutions reluctant to lend money. That in turn has fueled the credit crunch that is squeezing the economy.

"Very complex financial instruments have evolved in recent years, like CDOs and credit-default swaps, which pose potential problems in terms of systemic risk," Schumer said. "The Treasury Department should address these issues as well."

In the short term, Paulson's plan proposes:

* Creating a Mortgage Originations Commission that would oversee the home-loan industry, making sure that state-level licensing conformed with a set of new federal minimum standards.

* Consideration of what kind of regulation should be put in place for investment banks that wish to borrow directly from the Federal Reserve.

Paulson has said previously that, although the Fed this month agreed to make loans to securities firms on a temporary, emergency basis, those institutions would have to be more heavily regulated if they wanted permanent access to Fed lending.

In the medium term, Paulson proposes:

* Eliminating the distinction between thrifts and banks under federal law.

* Bringing all state-chartered banks under federal supervision, either through the Federal Reserve or the Federal Deposit Insurance Corp.

* Federal oversight of insurance companies.

* Integrating oversight of the futures and securities markets by combining the Securities and Exchange Commission with the Commodity Futures Trading Commission.

Ultimately, the administration's proposal envisions paring down financial market oversight to just three regulators: a "market stability" regulator based on the Federal Reserve; a "business conduct regulator" based on the current SEC and CFTC; and a "prudential oversight" regulator focused on depository banks, encompassing the current Office of the Comptroller of the Currency and the Office of Thrift Supervision.

A major Wall Street trade group, the Securities Industry and Financial Markets Assn., said in reaction to Paulson's blueprint that there was "universal agreement that it is time to modernize and revitalize the current system" of regulation.

"The present regulatory framework was born of Depression-era events and is not well suited for today's environment where billions of dollars race across the globe with the click of a mouse," the group said.

maura.reynolds@latimes.com

Staff writer Tom Petruno in Los Angeles contributed to this report.

Now that the pendulum is swinging back
Marc Lee
2008-03-26 11:54:52
But what if the real problem is that we are deluded, misled by our culture of fawning business journalism, fawning business schools (what might be called the Florida effect) and profoundly faulty securities regulation? ...

US markets seen losing ground to global competitors
John Rutledge
2008-03-26 23:25:16
US capital markets again lost ground against global competitors last year, highlighting the need to streamline regulation and crack down on excessive securities litigation. The United States received only 6.9 percent of the funds raised ...

Women @ ASIL redux
Diane Marie Amann
2008-03-27 10:26:21
"Economic Politics & National Security: A Committee on Foreign Investments in the United States Case Study": Linda Menghetti, Emergency Committee for American Trade. "The New Politics of Regulatory Cooperation: The Case of Food Safety": ...

Financial Crisis: Asset Securitization The Last Tango
xkorpion
2008-03-25 18:14:37
According to the Securities Industry and Financial Markets Association, a US trade group, at the end of 2006 there was a total of some $3.6 trillion worth of Asset Backed Securities in the United States, including of home mortgages, ...

"A Coordinated Effort to Destroy Effective Regulation"
Mark Thoma
2008-03-23 09:43:44
Could so many CDOs have been sold if investors in the United States and overseas weren't reassured by the many bank regulators and the SEC and the monoline insurers and the rating agencies that the securities they were buying were as ...

Senate Finance Committee Will Study the Taxation of Sovereign ...
James Hamilton
2008-03-14 18:43:00
The United States does not exempt a foreign governments income earned from commercial activities in the US market because to do so would give them a competitive advantage over non-governmental market participants. ...

NYT Column- 3/24/08- Taming the Beast
sphsapenglish
2008-03-25 00:33:54
Times Topics: United States Economy. Now, I dont expect presidential campaigns to have all the answers to our current crisis even financial experts are scrambling to keep up with events. But I do think were entitled to more answers, ...

Word of the Day: Greed
Handy Fuse
2008-03-25 16:53:00
I have no doubt that media audiences nod in agreement with the same alacrity as if it were asserted that the United States is the greatest nation on earth. The argument. First, Rubin posits a "human nature." Then he asserts what the ...

Game Objects Are Unregulated Securities
Keith
2008-03-18 23:43:00
My corporations professor, Hugh Friedman taught us how difficult it is to actually spot a security, but gave us the definition contained in the United States Code. "SECURITIES - An investment in an enterprise with the expectation of ...

Aristotle and the Subprime Mess
John Mdaille
2008-03-24 04:25:00
Bear Stearns had $15 Trillion worth (notional value) on their books, an amount exceeding the Gross National Product of the United States. And they were a small player; the overall market is estimated to be in excess of $500 Trillion, ...

So Much for Relying on Valleywag
Jim Harper
2008-03-18 01:51:47
Although 10(b) does not use the term insider trading, a violation of 10(b) and Rule 10b-5 occurs when a corporate insider trades in the securities of his corporation on the basis of material nonpublic information. United States ...

Investment Banks Are Liars And Thieves, According To Investment ...
Ric
2008-03-19 14:25:11
Investment banks, after engineering another fraud on the people of the United States, a fraud enabled by the current government of the United States, have finally admitted what anyone with any common sense already knew. ...

Clintons Speech on the Economy: Transcript
VIRGINIA BERGMAN vbergman422@comcast.net
2008-03-24 17:08:00
That means families have lost at least $1.9 trillion in housing wealth so far, nearly two-thirds of the size of the entire United States government budget. And today, nearly 9 million families are struggling with mortgages that are ...

US must review regulation of securities firms: Paulson (AFP)
unknown
2008-03-26 16:40:26
personal loan refinancing financing lower my bills cash advance debt relief news money rate loan us loans auto loan united states coupons credit card discount credit best deal bills. US Economy.

The end of neoliberalism and the Speculative Onslaught.
jamie
2008-03-23 14:36:47
It began what future historians will describe as the final demise of the United States as the dominant global financial power. Liars Loans and NINA: Banks in an orgy of fraud The lessons of the 1998 Russia default and the LTCM systemic ...

Paulson Urges Broader Fed Oversight of Wall Street (Update2) By ...
java2hot
2008-03-26 18:36:36
across the United States. And those offices were frequently hard-pressed to come up with the manpower and money to investigate and prosecute complex fraud cases. We found the [Justice] Department was challenged by a lack of ...

GAO Report Finds Market Discipline Alone Cannot Manage Hedge Fund ...
James Hamilton
2008-02-26 08:22:00
... regulates 1991 hedge fund advisers that are registered as investment advisers, which include 49 of the largest US hedge fund advisers that account for about one-third of hedge funds assets under management in the United States. ...

Is the US economy heading for a collapse?
svraman24
2008-03-23 22:27:13
Your actions, not only impact the United States economy, it does have the potency to impact the global economy. That explains, partly, if not wholly, the why to this letter. Yes, I am indeed aware of the sub-prime crisis that has ...

Debt Rattle, March 24 2008
Ilargi
2008-03-24 14:54:00
Mortgage-backed securities have plunged in value in a credit squeeze brought by low-quality mortgages in the United States, leading to a vicious circle of forced sales, falling prices and weakening balance sheets for banks. ...

"The Fed Will Do Whatever It Wants" and RAISE CASH NOW!
Genesis
2008-03-20 13:42:00
This will have a permanent effect on the standard of living of over 100 million households in the United States and thus our economy. It is unavoidable and as a consequence MUST have a similar impact on the earnings power of United ...

The Great Depression
madeprof
2008-03-25 14:11:05
Certainly the people had made a mistake in buying over-priced securities, but they had been talked into it by every leading citizen from the President of the United States on down. Every magazine of national circulation, ...

US regulators to blame for credit crisis
lushhomeonline
2008-03-21 17:05:17
That leaves us with flexibility - a Federal Reserve reversing course and helping to clean up a mess that it helped create. The world would have been better off if the United States had discovered the virtues of government before, ..

Why is the Federal Reserve Board made up entirely of Bush ...
unknown
2008-03-20 20:27:09
Fed governors could be given a stake in the performance of the Term Securities Lending Facility! Then again, maybe not. Does the partisan makeup of the Fed matter? I agree with Felix Salmon that there is no clear partisan divide these ...

Making The World Safe For Billionaires
Demon Princess
2008-03-17 04:59:00
"The United States has already slipped into a deep recession that could be the most serious since World War II, said Martin Feldstein, president of the Cambridge group that is considered the official word on economic cycles. ...

Economic Breakdown: Another Great Depression
Left Turn
2008-03-20 15:28:00
After a generation of relentless media propaganda, which touted the infallibility of the capitalist market and the genius of Wall Streets financial wizards, the United States economy now stands on the very brink of an economic ...

A new Great Depression? It's different this time.
ken
2008-03-21 16:13:00
The resolution drew a stark contrast with the Fed's role in the 1930 collapse of the Bank of the United States, a New York institution largely serving Jewish immigrants. The failure was then the largest in US history, and the Fed's ...

What Created This Monster?

Not only is the Federal Reserve's action unprecedented since the Great Depression — by lending money directly to major investment banks — but taxpayers are also now on the hook for billions of dollars in questionable trades these same bankers made when the good times were rolling.

“Bear Stearns has made it obvious that things have gone too far,” says Mr. Gross, who plans to use some of his cash to bargain-shop. “The investment community has morphed into something beyond banks and something beyond regulation. We call it the shadow banking system.”

It is the private trading of complex instruments that lurk in the financial shadows that worries regulators and Wall Street and that have created stresses in the broader economy. Economic downturns and panics have occurred before, of course. Few, however, have posed such a serious threat to the entire financial system that regulators have responded as if they were confronting a potential epidemic.

As Congress and Republican and Democratic presidential administrations pushed for financial deregulation over the last decade, the biggest banks and brokerage firms created a dizzying array of innovative products that experts now acknowledge are hard to understand and even harder to value.

On Wall Street, of course, what you don’t see can hurt you. In the past decade, there has been an explosion in complex derivative instruments, such as collateralized debt obligations and credit default swaps, which were intended primarily to transfer risk.

These products are virtually hidden from investors, analysts and regulators, even though they have emerged as one of Wall Street’s most outsized profit engines. They don’t trade openly on public exchanges, and financial services firms disclose few details about them.

Used judiciously, derivatives can limit the damage from financial miscues and uncertainty, greasing the wheels of commerce. Used unwisely — when greed and the urge to gamble with borrowed money overtake sensible risk-taking — derivatives can become Wall Street’s version of nitroglycerin.

WALL STREET DEMANDS MASSIVE BAILOUT OR ELSE

Doug Henwood: Real solution includes shifting spending to green and public infrastructure

http://therealnews.com/web/index.php?thisdataswitch=0&thisid=838&thisview=item

International Herald Tribune: Profligacy is America's problem

FOXNEWS.com: U.S. Consumer Credit Card Debt May Crash Economy

http://www.latimes.com/business/la-fi-treasury29mar29,1,6243265.story

OVER Hauling? Or Consolidation of more power ? That Is The Question!

Treasury Dept. Seeks New U.S. Power to Keep Markets Stable

APRIL FOOLS: THE FOX TO GUARD THE BANKING HENHOUSE
The Federal Reserve, which has been credited with creating the current housing bubble and bust just as it created the credit bubble of the Roaring Twenties and the bust of 1929, is now to be given vast new powers to oversee regulation of the banking industry and promote "financial market stability." At least, that is the gist of a Treasury Department proposal to be presented to Congress on Monday, March 30, 2008 . . . .

Advise Congress: The Treasury's Summary Of Regulatory Proposal Constitutes Treason
Advise Congress: The Treasury's Summary of Regulatory Proposal Constitutes Treason

The Bankrupting Of America
Do you believe President Bush's prediction that we'll be operating in the black by 2012? There's no way that's going to happen if his disastrous economic policies are continued and the Iraq war is allowed to drag on indefinitely. It's time for a reality check on the U.S. economy.

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$