posted
market reform is not something that can be done in one fell swoop.
there is so much wrong that it isn't even clear where to start.
stiff jail time for infractions is what it is going to take to clean the mess up that we call Wall St.
people talk about tort reform in medicine? well the market we have right is what you get from "tort reform"
this is a long article; i have not even finished it, but basically it is damn hard to sue the fraudsters on Wall St and even if you can keep from getting your case dismissed? you may still win nothing.
posted
Plus, Mack is posturing, to deflect personal/company responsibility. And that's a slip, to ask for the US to be as loosey goosey as others, rather than tighten up everywhere.
-------------------- Nashoba Holba Chepulechi Adventures in microcapitalism...
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quote:Originally posted by T e x: Plus, Mack is posturing, to deflect personal/company responsibility. And that's a slip, to ask for the US to be as loosey goosey as others, rather than tighten up everywhere.
i don't know enough about foreign banks to know what type of "govt insurance" they have...
i do know that this guy is crying the blues, and it sounds pretty dumb to me.
"watch out you might get what you're after"?
world regulation means "globally collected taxes" thats not gonna happen without "civil wars" IMO.
-------------------- Don't envy the happiness of those who live in a fool's paradise.
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posted
Interesting, especially coming from a guy that was being investigated for insider trading back in 05...He was untouchable then and these scum bags will continue to do whatever they want under so called "World Regulation"...
It's all about who ya know and who ya blow...Don't see how "World Regulation" would change that...JMO
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Schapiro to explore limits on 'naked' short selling
Sept. 30, 2009, 11:37 a.m. EDT
WASHINGTON (MarketWatch) -- The Securities and Exchange Commission is exploring stringent action against naked short selling, considered by some politicians and academics to be a key contributor to the financial crisis, Chairwoman Mary Schapiro said Wednesday.
"The commission is concerned about abusive 'naked' short selling and persistent fails to deliver and the potentially manipulative effect this activity can have on our markets," Schapiro said at an SEC roundtable. "Thus, we are examining whether a pre-borrow or 'hard locate' requirement or another alternative is necessary or would be effective in addressing such activity and preventing market manipulation."
Schapiro said the first panel at the agency roundtable will discuss a proposal from members of Congress for an SEC study of whether a pre-borrow requirement would end naked short selling. With such a requirement, an institution would be required to arrange formally to borrow shares, or "pre-borrow" before a short sale. Industry officials also call such a requirement a "hard-locate."
"In the recent financial decline, there was abusive short selling enabled by the repeal of the 70-year-old uptick rule and a lack of so-called pre-borrow or hard locate requirements," Kaufman and Isakson said.
quote:Bank of America’s Lewis Resigns After Bet on Rebound (Update1)
By David Mildenberg
Oct. 1 (Bloomberg) -- Kenneth D. Lewis bet Bank of America Corp.’s future on America at a time when America went bust.
Lewis, 62, said yesterday he will resign as chief executive officer at the end of the year, leaving his successor to capitalize on, or salvage, the acquisitions that led to his downfall. The bank didn’t name a replacement.
The CEO has become a distraction, pilloried by regulators and lawmakers since he engineered the $29 billion takeover of Merrill Lynch & Co. in January and bought subprime home lender Countrywide Financial Corp. in 2008, said CreditSights Inc. analyst David Hendler.
“He’s drifting out to sea like a dying Eskimo, knowing the company can do better and thrive without him,” Hendler said.
Bank of America more than tripled in size since Lewis took over in April 2001 and became the biggest U.S. lender by assets and deposits. He spent more than $130 billion on acquisitions.
In the worst housing slump since the 1930s, Lewis bought Countrywide, the nation’s biggest home lender, and as financial markets teetered near collapse a year ago, he agreed to pay $29 a share for Merrill Lynch, the world’s largest brokerage. The U.S. economy then shrank for four quarters, including a 6.4 percent contraction of gross domestic product in the first three months of this year.
Lewis is one of the last leaders of the biggest U.S. financial firms to depart in the three-year-old financial crunch. Other CEOs who have left under pressure include James Cayne of Bear Stearns Cos., Charles Prince of Citigroup Inc., Stanley O’Neal of Merrill, Kennedy Thompson of Wachovia and Richard Fuld of Lehman Brothers Holdings Inc.
re: "other CEOs" ... I'd like to see every one of 'em in jail, not just drifting away on their ice floes (with hundreds of million$). One encouraging note from deep in the story: "Andrew Cuomo, the New York attorney general, has said he’s deciding whether to bring charges against executives. In a statement, Cuomo said Lewis’s departure won’t affect his probe."
-------------------- Nashoba Holba Chepulechi Adventures in microcapitalism...
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quote:Regulator Tried to Steer Stanford Assets to Ally: Court Published: Wednesday, 30 Sep 2009 | 6:38 PM ET By: Scott Cohn Senior Correspondent, CNBC
The top financial regulator in Antigua—who allegedly took hundreds of thousands of dollars in bribes from accused Ponzi schemer Allen Stanford in exchange for hiding the fraud—improperly tried to steer Stanford's assets to a British liquidation firm, according to a ruling by a Canadian court.
quote:London Bankers Balk at EU Regulation as Lea Invokes Secession
By Simon Clark and Tom Cahill
Oct. 1 (Bloomberg) -- In a Georgian townhouse four minutes walk from Parliament, bankers, lawyers and economists held an off-the-record evening meeting to plot how to fight European Union financial regulation that they deem a threat to London.
“I am extremely worried about the City of London,” said Ruth Lea, a director at Arbuthnot Banking Group Plc, who agreed after the Sept. 24 meeting at the Institute of Economic Affairs for her comments to be published. “Britain may be able to influence EU regulation, but we won’t be calling the shots. Britain should consider the nuclear option of leaving the EU.”
Europe is making new laws and institutions that may challenge London’s ability to set the rules in the region’s largest financial center. At meetings across the city, investors are discussing how to respond to Brussels, the EU capital. Where some see the rules as a threat to Britain, others argue that the challenge is to capitalism across all of Europe.
“It’s good to avoid mentioning London in every single sentence and start looking at this from a European point of view,” said Mats Persson, research director at Open Europe, a London lobby group that’s critical of EU integration. Persson also spoke at the IEA. “I am Swedish, and I have sympathy for this kind of thinking.”
The EU last week proposed three regulatory agencies with the power to overrule national authorities. The European Parliament is preparing to debate the Directive on Alternative Investment Fund Managers -- proposed rules pushed by European Socialist Party President Poul Nyrup Rasmussen to limit borrowing by private-equity firms and hedge funds and to enforce them to establish bases within the EU.
quote:Fed Shouldn't Be Only Watcher of Risk: Bernanke Published: Thursday, 1 Oct 2009 | 2:45 AM ET By: Reuters
A broad-based oversight council of financial regulators, not just the Federal Reserve, should be set up to monitor systemic risk to the economy, Federal Reserve Chairman Ben Bernanke said in text of remarks to be delivered to Congress on Thursday, obtained by Reuters.
In addition, all systemically important financial firms should be subject to a consolidated regulator, whether or not the firms own banks, Bernanke said.
His remarks came amid growing skepticism in Congress about an Obama administration proposal to give the Fed the unquestioned lead role in policing the economy for systemic risk, in coordination with an inter-agency council.
Bernanke's comments stressed the importance of such a council, especially in assessing the very broadest sort of risks posed by interactions of institutions and markets.
"For purposes of both effectiveness and accountability, the consolidated supervision of an individual firm, whether or not it is systemically important, is best vested with a single agency," Bernanke said in the text.
"However, the broader task of monitoring and addressing systemic risks that might arise from the interaction of different types of financial institutions and markets -- both regulated and unregulated -- may exceed the capacity of any individual supervisor," he said.
"Instead, we should seek to marshal the collective expertise and information of all financial supervisors to identify and respond to developments that threaten the stability of the system as a whole," he said.
On another front, Bernanke said, a new "special resolution authority" should be created that would allow the government to wind down a failing systemically important financial institution, Bernanke argued.
Policymakers should also ensure that consumers are protected from unfair and deceptive practices in their financial dealings, he said.
Bernanke is due to testify before the U.S. House of Representatives Financial Services Committee on Thursday.
George Soros launches a $50 million effort to purge economics of its free-market zeal.
"Large swaths of economics are going to have to be rethought on the basis of what's happened." So said Larry Summers, President Obama's chief economic adviser, in an interview in the weeks after the markets crashed a year ago. Yet to a remarkable degree, economic thinking hasn't changed very much at all. (Click here to follow Michael Hirsh).
Now financier George Soros is announcing a $50 million effort to speed things along. This week Soros is gathering some of the leading practitioners of the market-skeptic school, who were marginalized during the era of "free-market fundamentalism," among them Nobelists Joseph Stiglitz, George Akerlof, Michael Spence, and Sir James Mirrlees. He's also creating an "Institute for New Economic Thinking" to make research grants, convene symposiums, and establish a journal, all in an effort to take back the economics profession from the champions of free-market zealotry who have dominated it for decades, and to correct the failures of decades of market deregulation. Soros hopes matching funds will bring the total endowment up to $200 million. "Economics has failed not only to predict and explain what happened but has also failed to protect society," says Robert Johnson, a former managing director at Soros Fund Management, who will direct the new institute. "That's what the crisis revealed. The paradigm has failed. There is no guidance."
quote:But for most of his life, Greenspan was an Ayn Rand libertarian who abhorred the idea that government should break up anything; he once wrote that "the entire structure of antitrust statutes in this country is a jumble of economic irrationality and ignorance." Bigger was better, he said, and that way of thinking largely governed his stewardship of the Fed from 1987 to 2005. "The control by Standard Oil, at the turn of the century, of more than eighty percent of refining capacity made economic sense and accelerated the growth of the American economy," Greenspan wrote in Capitalism: the Unknown Ideal in 1961. But Greenspan now has this to say about banks: "If they're too big to fail, they're too big.
-------------------- Nashoba Holba Chepulechi Adventures in microcapitalism...
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quote:Originally posted by T e x: whooo, esoteric, dude...
yeah, it is... sortof.
unless you consider that commodity trading was originally designed to make it easier for farmers to market their goods, not for somebody who never has any intention of taking delivery to manipulate a market.
then when you look into who was handling most of the trades? it doesn't seem so soteric....
at what point does "freemarketism" become corporate feudalism?
when the electric co's need to build thier infrastructure? who do they turn to for "assistance" in acquiring their land?
the TVA is a good example. they moved thousands off their land at bargain prices or worse...
now the power co's have the freedom to charge whatever they want?
every single power co in the US used (and still does use) emminent domain to come into existance, and to deliver power.
yet they lobbied Clinton to get "freemarketism" restored to their industry after they had everything they thought they needed...
there is no freemarketism there hasn't been any here in a long time... it's sortofa joke, only it's not funny.
-------------------- Don't envy the happiness of those who live in a fool's paradise.
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posted
i guess i should have clarified why the electric co's and the commodities trading go together.
some of the electic co's have been caught "trading against themselves" (actually the consumer) in nat gas, in order to run their costs up, the costs are then passed on to the consumers thru fuel surcharges....
they use subsidiaries to purchase gas contracts, then resell the contracts at a profit to the main co.- the traders get a bonus, the subsidiary makes a profit and the consumer pays the difference.
-------------------- Don't envy the happiness of those who live in a fool's paradise.
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Ten years ago today, they repealed Glass Steagel. It was a landmark, bipartisan bill. Here's what the NY Times said about it at the time:
CONGRESS PASSES WIDE-RANGING BILL EASING BANK LAWS By STEPHEN LABATON Published: Friday, November 5, 1999
Congress approved landmark legislation today that opens the door for a new era on Wall Street in which commercial banks, securities houses and insurers will find it easier and cheaper to enter one another's businesses.
The measure, considered by many the most important banking legislation in 66 years, was approved in the Senate by a vote of 90 to 8 and in the House tonight by 362 to 57. The bill will now be sent to the president, who is expected to sign it, aides said. It would become one of the most significant achievements this year by the White House and the Republicans leading the 106th Congress.
''Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century,'' Treasury Secretary Lawrence H. Summers said. ''This historic legislation will better enable American companies to compete in the new economy.''
The decision to repeal the Glass-Steagall Act of 1933 provoked dire warnings from a handful of dissenters that the deregulation of Wall Street would someday wreak havoc on the nation's financial system. The original idea behind Glass-Steagall was that separation between bankers and brokers would reduce the potential conflicts of interest that were thought to have contributed to the speculative stock frenzy before the Depression.
Today's action followed a rich Congressional debate about the history of finance in America in this century, the causes of the banking crisis of the 1930's, the globalization of banking and the future of the nation's economy.
Administration officials and many Republicans and Democrats said the measure would save consumers billions of dollars and was necessary to keep up with trends in both domestic and international banking. Some institutions, like Citigroup, already have banking, insurance and securities arms but could have been forced to divest their insurance underwriting under existing law. Many foreign banks already enjoy the ability to enter the securities and insurance industries.
''The world changes, and we have to change with it,'' said Senator Phil Gramm of Texas, who wrote the law that will bear his name along with the two other main Republican sponsors, Representative Jim Leach of Iowa and Representative Thomas J. Bliley Jr. of Virginia. ''We have a new century coming, and we have an opportunity to dominate that century the same way we dominated this century. Glass-Steagall, in the midst of the Great Depression, came at a time when the thinking was that the government was the answer. In this era of economic prosperity, we have decided that freedom is the answer.''
In the House debate, Mr. Leach said, ''This is a historic day. The landscape for delivery of financial services will now surely shift.''
But consumer groups and civil rights advocates criticized the legislation for being a sop to the nation's biggest financial institutions. They say that it fails to protect the privacy interests of consumers and community lending standards for the disadvantaged and that it will create more problems than it solves.
The opponents of the measure gloomily predicted that by unshackling banks and enabling them to move more freely into new kinds of financial activities, the new law could lead to an economic crisis down the road when the marketplace is no longer growing briskly.
''I think we will look back in 10 years' time and say we should not have done this but we did because we forgot the lessons of the past, and that that which is true in the 1930's is true in 2010,'' said Senator Byron L. Dorgan, Democrat of North Dakota. ''I wasn't around during the 1930's or the debate over Glass-Steagall. But I was here in the early 1980's when it was decided to allow the expansion of savings and loans. We have now decided in the name of modernization to forget the lessons of the past, of safety and of soundness.''
Senator Paul Wellstone, Democrat of Minnesota, said that Congress had ''seemed determined to unlearn the lessons from our past mistakes.''
''Scores of banks failed in the Great Depression as a result of unsound banking practices, and their failure only deepened the crisis,'' Mr. Wellstone said. ''Glass-Steagall was intended to protect our financial system by insulating commercial banking from other forms of risk. It was one of several stabilizers designed to keep a similar tragedy from recurring. Now Congress is about to repeal that economic stabilizer without putting any comparable safeguard in its place.''
Supporters of the legislation rejected those arguments. They responded that historians and economists have concluded that the Glass-Steagall Act was not the correct response to the banking crisis because it was the failure of the Federal Reserve in carrying out monetary policy, not speculation in the stock market, that caused the collapse of 11,000 banks. If anything, the supporters said, the new law will give financial companies the ability to diversify and therefore reduce their risks. The new law, they said, will also give regulators new tools to supervise shaky institutions.
''The concerns that we will have a meltdown like 1929 are dramatically overblown,'' said Senator Bob Kerrey, Democrat of Nebraska.
Others said the legislation was essential for the future leadership of the American banking system.
''If we don't pass this bill, we could find London or Frankfurt or years down the road Shanghai becoming the financial capital of the world,'' said Senator Charles E. Schumer, Democrat of New York. ''There are many reasons for this bill, but first and foremost is to ensure that U.S. financial firms remain competitive.''
But other lawmakers criticized the provisions of the legislation aimed at discouraging community groups from pressing banks to make more loans to the disadvantaged. Representative Maxine Waters, Democrat of California, said during the House debate that the legislation was ''mean-spirited in the way it had tried to undermine the Community Reinvestment Act.'' And Representative Barney Frank, Democrat of Massachusetts, said it was ironic that while the legislation was deregulating financial services, it had begun a new system of onerous regulation on community advocates.
Many experts predict that, even though the legislation has been trailing market trends that have begun to see the cross-ownership of banks, securities firms and insurers, the new law is certain to lead to a wave of large financial mergers.
The White House has estimated the legislation could save consumers as much as $18 billion a year as new financial conglomerates gain economies of scale and cut costs.
Other experts have disputed those estimates as overly optimistic, and said that the bulk of any profits seen from the deregulation of financial services would be returned not to customers but to shareholders.
These are some of the key provisions of the legislation:
*Banks will be able to affiliate with insurance companies and securities concerns with far fewer restrictions than in the past.
*The legislation preserves the regulatory structure in Washington and gives the Federal Reserve and the Office of Comptroller of the Currency roles in regulating new financial conglomerates. The Securities and Exchange Commission will oversee securities operations at any bank, and the states will continue to regulate insurance.
*It will be more difficult for industrial companies to control a bank. The measure closes a loophole that had permitted a number of commercial enterprises to open savings associations known as unitary thrifts.
One Republican Senator, Richard C. Shelby of Alabama, voted against the legislation. He was joined by seven Democrats: Barbara Boxer of California, Richard H. Bryan of Nevada, Russell D. Feingold of Wisconsin, Tom Harkin of Iowa, Barbara A. Mikulski of Maryland, Mr. Dorgan and Mr. Wellstone.
In the House, 155 Democrats and 207 Republicans voted for the measure, while 51 Democrats, 5 Republicans and 1 independent opposed it. Fifteen members did not vote.
Tucked away in the legislation is a provision that some experts today warned could cost insurance policyholders as much as $50 billion. The provision would allow mutual insurance companies to move to other states to avoid payments they would otherwise owe policyholders as they reorganize their corporate structure. Many states, including New York and New Jersey, do not allow such relocations without the consent of the insurer's domicile state. But the legislation before Congress would pre-empt the states.
Both the Metropolitan Life Insurance Company and the Prudential Life Insurance Company are in the midst of reorganizing into stock-based corporations that are requiring them to pay billions of dollars to policyholders from years of accumulated surplus. In exchange, the policyholders give up their ownership in the mutual insurance company.
The legislation would permit any mutual insurance company to avoid making surplus payments to policyholders by simply moving to states with more permissive laws and setting up a hybrid corporate structure known as a mutual holding company.
The provision was inserted by Representative Bliley at the urging of a trade association. It attracted little opposition because it was attached to a provision that forbids insurers from discriminating against domestic-violence victims.
In a letter sent to Congress this week, Mr. Summers said that the provision ''could allow insurance companies to avoid state law protecting policyholders, enriching insiders at the expense of consumers.''
So, how did all that bipartisan comity work out for us?
Maybe the Senate ought to stop its business for a couple of minutes today and give a round of slow clapping to the six Senators still in office who had the foresight to vote against that hideous piece of garbage. Not that they would ever do it, of course. If there's one thing that will never be forgiven in Washington is being right about something when almost everyone else was wrong.
Via zerohedge, h/t to js digby 11/05/2009 10:30:00 AM Comments (26) | Trackback (0)
-------------------- Nashoba Holba Chepulechi Adventures in microcapitalism...
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posted
They responded that historians and economists have concluded that the Glass-Steagall Act was not the correct response to the banking crisis because it was the failure of the Federal Reserve in carrying out monetary policy, not speculation in the stock market, that caused the collapse of 11,000 banks. If anything, the supporters said, the new law will give financial companies the ability to diversify and therefore reduce their risks.
The new law, they said, will also give regulators new tools to supervise shaky institutions.
''The concerns that we will have a meltdown like 1929 are dramatically overblown,'' said Senator Bob Kerrey, Democrat of Nebraska.
yeah the solution? it's called BAILOUTS...
people who fail to study and truly comprehend history are doomed...
there will be no market reform just more bailouts.
-------------------- Don't envy the happiness of those who live in a fool's paradise.
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posted
this little gem was just brought to my attention...
one more way to discourage people from being able to have possession of what they "own" - well not really own, you just have an IOU.
In January 2009, Depository Trust Company (DTC) began implementing a change to the "Withdrawal-by-transfer" (WT) procedures.1 A WT occurs when a broker holding an investor’s shares in street name transfers the shares out to record ownership (i.e., into the investor’s name on the books of the issuer's transfer agent). This could occur either if an investor who has held the shares in his brokerage account decides to withdraw them and become a record holder or if an investor buys shares through a broker but elects to hold them of record, not in an account with that broker. Once transferred, the shares may be represented by either a certificate or an account statement if the issuer participates in DRS.
In January, DTC stopped authorizing the issuance of physical certificates upon a WT for issuers that participate in DRS. Effective July 1, DTC will also stop authorizing the issuance of certificates upon a WT for issuers that do not participate in DRS. However, by definition, record holders of a non-participating issuer may only receive certificates. Accordingly, the investor can still obtain a certificate through the “Rush WT” process, but DTC will charge $500 for the privilege.
NYSE believes that securityholders derive no apparent benefit from continuing to hold their securities in certificated form rather than in uncertificated form in street name or through DRS and that the inability of the issuers or their transfer agents to charge for the issuance of securities certificates imposes a considerable cost on issuers and transfer agents. Therefore, NYSE is discontinuing its prohibition of issuers or their transfer agents charging fees for the issuance of new certificates. Allowing transfer agents to charge for the issuance of certificates should not only shift the cost of the issuance of certificates from the issuers and transfer agents to the requesting securityholders but should also have the added effect of encouraging more securityholders to hold their securities in street name or through DRS, which should further the dematerialization movement. NYSE listed companies that want their investors to continue to have access to the free issuance of new certificates will be able to ensure the continuation of such practice through their contractual arrangements with their transfer agents.
quote:Originally posted by glassman: they call it "dematerialisation":
NYSE believes that securityholders derive no apparent benefit from continuing to hold their securities in certificated form rather than in uncertificated form in street name or through DRS and that the inability of the issuers or their transfer agents to charge for the issuance of securities certificates imposes a considerable cost on issuers and transfer agents. Therefore, NYSE is discontinuing its prohibition of issuers or their transfer agents charging fees for the issuance of new certificates. Allowing transfer agents to charge for the issuance of certificates should not only shift the cost of the issuance of certificates from the issuers and transfer agents to the requesting securityholders but should also have the added effect of encouraging more securityholders to hold their securities in street name or through DRS, which should further the dematerialization movement. NYSE listed companies that want their investors to continue to have access to the free issuance of new certificates will be able to ensure the continuation of such practice through their contractual arrangements with their transfer agents.
Discouraging people to have a solid certificate by putting these outrageous fees has worked. I don't see anyone asking for them, well at least I don't hear of anyone asking for them. What’s the point if you can just go on line and see the digits on your account. So if there were a wipe of our databases such as what was feared by the millennium crash what then? Way too much complacency on letting someone else make the decisions... blatantly unchecked imo.
I haven't been in the markets very long at all but I know Scottrade has been charging for certificates my whole time so maybe the fees will just get higher.
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!?
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posted
let's hope this is more effective than the one it is replacing:
WASHINGTON – Attorney General Eric Holder, Treasury Secretary Tim Geithner, Housing and Urban Development (HUD) Secretary Shaun Donovan, and Securities and Exchange Commission (SEC) Chairwoman Mary Schapiro today announced that President Barack Obama has established by Executive Order an interagency Financial Fraud Enforcement Task Force to strengthen efforts to combat financial crime. The Department of Justice will lead the task force and the Department of Treasury, HUD and the SEC will serve on the steering committee. The task force’s leadership, along with representatives from a broad range of federal agencies, regulatory authorities and inspectors general, will work with state and local partners to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, address discrimination in the lending and financial markets and recover proceeds for victims.
The task force, which replaces the Corporate Fraud Task Force established in 2002, will build upon efforts already underway to combat mortgage, securities and corporate fraud by increasing coordination and fully utilizing the resources and expertise of the government’s law enforcement and regulatory apparatus. The attorney general will convene the first meeting of the Task Force in the next 30 days.
posted
A nugget from a piece about Madoff's attorney, quoted here:
quote:"I would cut the staff in Washington at the SEC by two-thirds," he said. "I wouldn't fire them, I'd send them out to where the frauds are occurring," stationing more examiners at SEC regional offices around the country.
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