Glass-Steagall Reintroduced (Basically) - HR.1489 The Market Ticker ® - Commentary on The Capital Markets Posted 2011-04-14 13:36
by Karl Denninger
in Politics

Glass-Steagall Reintroduced (Basically) - HR.1489

Time to hold people's feet to the fire - especially Tea Party claimants.

To repeal certain provisions of the Gramm-Leach-Bliley Act and revive the separation between commercial banking and the securities business, in the manner provided in the Banking Act of 1933, the so-called ‘‘Glass-Steagall Act’’, and for other purposes.

EXXXXCELLENT.

CALL YOUR CRITTERS AND DEMAND A PUBLIC POSITION STATEMENT ON THIS BILL.  IF THEY WON'T CO-SPONSOR AND PUSH IT, USE THE WORDS: "YOU'RE FIRED!"

Reinstate Glass-Steagall or Bend-over, again…
April 14, 2011 Time:4:38 pm By Flight

People of the United States of America, You need to learn about what is the root cause of the crisis in America. Don’t let the very people that swindled you frame the arguments. In many cases the victims of their grand scheme to swindle the American Tax payer, are working to help them frame the next scheme, and that is to take away your hard earned Social Security and Medicare.

First, you are not safe no matter who you elect, Democrat or Republican. The Government is no longer for the people. We now have a Corpocracy, my term for the Fascist Oligarchy that has bought our government. When we get down to brass tacks this is the real root, but their biggest victory came at the hands of Democratic President Clinton and a Republican Congress and that was the repeal of Glass-Steagall. Most ordinary Americans don’t understand what is going on. I am attempting to educated people for what ever good this may accomplish, but the goal is to spread information and prevent it from happening again. Please, if the information here has helped you understand what happened and why Glass-Steagall must be reinstated, Spread this on all of your social networks. The concepts are not that hard to understand, you just have to be interested in knowing the truth…

If we don’t reinstate Glass-Steagall the same thing will happen again. They cannot help themselves having got away with this once, they are even more emboldened by our ignorance…

http://trendriding.com/2011/04/14/reinstate-glass-steagall/

"Glass Steagall" was the legislation that had enabled America to take its country back out of the hands of the financier empire. It was enacted at the time of America worst depression to stop the looting of the nation and begin its recovery. On this basis America had developed the most powerful economy in the world and the richest nation on the planet. But Glass Steagall was repealed by traitors in high places. As a consequence America collapsed on many fronts. Its industries have been destroyed. Its infrastructures are falling apart. Its social structures are torn down. It has become a hellhole of poverty and a welfare state for the thieves. To recover itself America needs a new renaissance and a new industrial revolution. And for this it needs Glass Steagall restored. Many are fighting for it, but not enough to turn the tide against the traitors in high office who stall the restoration with every dirty trick and threat they can throw against it to block Glass Steagall that would take the wind out of the sails of empire and protect the nation. But the key issue here is not empire, but the small-minded thinking in society.

So free marketeers need to stand against the free market?

ETA: anyone who refers to the US as a "hellhole of poverty" is a fucking dipped in stupid retard.

No, they need to stand against securities fraud and abuse of the banking system in terms of insane leverage which jeopardizes its solvency exposing depositers to loss.

The so-called "free-marketers" have always stood for anything but . . .

How is supporting Glass Steagall against the free market?  Anyone who reaches that conclusion is also a fucking dipped in stupid retard.

The separation between the commercial banking and securities sectors would not happen without government action, correct?  Seems pretty cut and dry.

Pure unadulterated BULLSHIT.  Do you have any idea what Glass-Steagall Act 1933 did?



Read up.

i was hoping you or dk professor would show up here to set the record straight





 

"Glass Steagall" was the legislation that had enabled America to take its country back out of the hands of the financier empire. It was enacted at the time of America worst depression to stop the looting of the nation and begin its recovery. On this basis America had developed the most powerful economy in the world and the richest nation on the planet. But Glass Steagall was repealed by traitors in high places. As a consequence America collapsed on many fronts. Its industries have been destroyed. Its infrastructures are falling apart. Its social structures are torn down. It has become a hellhole of poverty and a welfare state for the thieves. To recover itself America needs a new renaissance and a new industrial revolution. And for this it needs Glass Steagall restored. Many are fighting for it, but not enough to turn the tide against the traitors in high office who stall the restoration with every dirty trick and threat they can throw against it to block Glass Steagall that would take the wind out of the sails of empire and protect the nation. But the key issue here is not empire, but the small-minded thinking in society.

the private sector doesn't need regulating. The government does.  Government is exempt to regulations when they feel like doing a bit of social engineering in the markets.

It all stems from the idiot media.  And the allergy most people have with root cause analysis.  Always clamoring for more regulation to unfuck a system that got fucked because of too much regulation.



 

It sounds like an Obama campaign speach.  BRING ON THE EMOTION!!!

Pathetic!

I don't know what gov. regulation there is that don't just end up in a cluster fuck of

No, you have it wrong.  Carter Glass?  Wow, the champion behind disenfranchisement of Blacks!  Yeah, he had issues but enough with that weak attack, I just wanted to let you know his mental state.



The collapse of 2007-2008 was NOT due to the bankers, it was due to Freddie Mac and Fannie Mae which were pushing loans on people who would not qualify.   Because of mark to market rules, enacted from the Enron/Worldcom/Tyco fallout under the Sarbanes-Oxley Act, these mortgage backed securities were great things for Freddie and Fannie to sell as long as the market was increasing.  Foreclosure would most likely be a net neutral for the investors.  But with a depreciating market, it would be RUIN for the holders.  All it took was a few foreclosures to cause the inventory to spike, causing the market to collapse.



The legislation was the Community Reinvestment Act.  THAT is the piece of shit which caused it.  Not repeal of Glass Steagall Act.  Senator McCain is one of the fuck nuggets proposing we return to G-S.  Fuck that old coot.



 

Yep.  classic smoke screen.  Blame the markets for crashing and hurting people when you are the one who injected the poison into the market by force.    You could also define this as projection.





 

Yep....Bend over again...

The White House and its economic brain trust of Treasury Secretary Tim Geithner, chief economist Larry Summers, and senior adviser Valerie Jarrett were still cozying up to bankers and campaign contributors like JPMorgan Chase’s Jamie Dimon and Goldman Sachs’ Lloyd Blankfein. They didn’t want to hear advice from the crazy old man who showed up occasionally at economic policy meetings and groused about putting an end to Wall Street risk-taking once and for all.

Paul Volcker didn’t seem to care. He spent long hours devising his plan to take Wall Street out of the risk-taking business, meeting occasionally with bankers he knew and trusted from his days as Fed chairman and later as a chief economist for an independent investment firm. These people said he spent most of his time listening to how Wall Street changed over the past three decades leading to the financial collapse, how it became less of a business that was paid to give advice and more of a gambling den that rolled the dice with shareholders' money with little accountability from regulators.

With that, Volcker came up with a plan that he believed would stop a crisis of the magnitude of the one that hit in 2008 and led to the destruction of two firms, Lehman Brothers and Bear Stearns, and the near destruction of the rest, from happening again. The banks, he believed, would no long be able to risk the firm’s own capital and blow it in a single trade. The banks would have to sell off other risky businesses like hedge funds and private-equity accounts not just because they created the opportunity to lose lots of money but also because, like trading, they have little to do with what Wall Street is supposed to be about—dispensing advice to corporations as well as investors.

Volcker, of course, had never really liked the big banks. He once quipped that the greatest innovation coming from the men of high finance was the ATM. He didn’t like the banks when he was Fed chairman, certainly not when he was out of government (just check some of his speeches), and certainly not now. And because of that, the bankers’ friends in high places, namely Geithner and Summers and ultimately the president himself, marginalized Volcker’s plan to make Wall Street a safer place.

––Charlie Gasparino

Read more: http://www.businessinsider.com/gasparino-volcker-rule-2011-1#ixzz1M6QRqe1U

Glad to see all the folks lining up to support Obamanation and his banking bail-out buddies.

Once more for the short bus crowd. The financial collapse was due to unqualified home buyers.  And the loans were sold based on an ever-increasing market value, giving false confidence to the investors.  It was the REGULATIONS which DEMANDED these loans be written that are to blame.

You've been here long enough to know (if you are capable of knowing) that the statistical odds of Keith_J supporting dingleBarry are lower than the odds of finding an arfcommer with more all around knowledge than Keith.



Pro Tip - If you find yourself in disagreement with Keith, crack a book until you figure out why you don't know what the heck you are talking about.



 

The federal reserve has given us two depressions, one we're still in.

The 'federal' reserve was put in place to prevent depressions.

The scumbags who gave you enron got rid of GS during klinton's last term.

amen

 

I'm not aware of any regulation that required lenders to hand out loans to unqualified individuals. I am aware that the government under a previous administration threatened to prosecute via a bullshit interpretation of law.









 

That is pretty pathetic on the surface.  Keith_J, the pied piper of GD.  Good lord!

Keith_J and I are usually on the same page, but on suggesting that Glass Steagall or the lack of it had nothing to do with the 2008 collapse, I guess we will just have to agree to disagree.

Yeah, because that's what the Tea Party is about!  Moar government regulation of the economy!

You win the fail award of the year, OP.

eta: Oh, and is there some reason you hate USAA, OP?  Last I checked, they were a great company who not only gives of their time and money to charities but also does a great service for military members and their families.  Is there some reason you're trying destroy a big part of their business?

Just to give everyone an idea of how ridiculous this notion is needs to look no further than the group currently pushing the issue....LaRouchePAC (i.e. Lyndon LaRouche). If you don't know who that is take two seconds and wiki that crazy mofo.





 

This is not correct.  The current problems stem from regulatory capture allowing a lot of companies engaged in fraud to escape scrutiny for about ten years, just like it did with the S&L crisis right here in the 1980s.

This is not the main cause of the problems that we are currently experiencing.  It is probably the clearest case where the government directly caused the problems, but there aren't enough unqualified home buyers under the Fed regs to compose more than 17% (according to the last analysis that I read) of the mortgages originated from 2002 to 2008.

I've got a wild and crazy idea... If you don't like banks who also handle investments, how about you NOT deal with those banks?

That would be fine, as long as I am not taxed out the ass when those same institutions appear to present enough of a systemic risk to take down the global banking system.

Cmon, dude.  You know people can't be expected to think and fend for themselves!

Yep



 

One major issue that people need to understand now is that the depositors have never been at risk, just the investors.  That is a common red herring.  It isn't true.  The depositors are not at risk.  The money that has been spent has been spent to deal with counterparty risk, bad investments, and to create the appearance of cash flow (and this solvency) with insolvent institutions.  It has never been used to make sure that the depositors are OK.

I was going to type up a lengthy reply, but in 1/10th the words, Keith_J has once again knocked it out of the park.

There is a lot more to it than that.   Do you have any idea how much of the banksters gambling debts are now on the tax payers credit card ?

Who is taxing you?  The bank or the Federal government?



So rather than lobby to END government subsidy of banks, you believe the rational thing to do is lobby to extend more Federal control over banks?  The same Federal government that took your money and propped the banks up?  That Federal government?

Wtf happened to reason in this country?

But that had nothing to do with the bill in question.

LaRouche Democrats....

The Feds.  I can't opt out of that, so if they want to privatize the debts of bad banks, I feel like I should have a bit of a say.  Call me old fashioned.

The reasons the depositors have not incurred losses yet are because 1) massive amounts of banking losses have been transferred to federal debt and 2) they have gamed the accounting rules to allow them to hold bad debt at face value.  All these big banks are insolvent and FDIC can not cover the losses if they were forced to be realized at market value.

Yes, it does.  Absent the draw of more money without the regulatory walls, lots more chances are taken.

Lending institutions, insurance agencies, etc. got bailed out with taxpayer dollars...



 

Exactly –– BUT THE DEPOSITORS ARE OK.  The money has been used to keep investors from taking a haircut when institutions the size of BofA are shut down, not to save old Gramma Weevil's savings account.

Good luck putting that genie back in the bottle.



 

And that right there is the folly of socialism.  You have bought into the system that robs you.

Peter robbed you, Paul.  So rather than punch him out, you're going to beg him to micro-manage Mary.

Community Reinvestment Act - Carter.

I'd say it's impossible if the "conservatives" of this country think it shouldn't even be attempted and that we should just go straight down the path to command economy.

*edit*



Was thinking of Smoot-Hawley, my apologies.



At any rate, the core issue of the problem isn't Glass-Steagall. Its the fact that our government bails out everyone. It didn't just bail out the banks, it bailed out GM, provided a trillion USD in stimulus funding, and so much more. To attack one aspect of the issue, while glaringly ignoring the rest will not solve our problems.
 

With or without GS the bailouts were an abomination.

To give a short summary (I am on the second Double Bastard ale and am not quite as sharp as usual), the mortage debt held by banks would be enough to wipe out most of the top 20 in the US if they recognize a 30% loss in their portfolios.  They do not have and cannot possibly raise the money as an allowance for the bad debt.  And, right now, about 30% of the notes in the US are worthless, and the vast majority of those are in the "sand states", and most of those notes are held by the top 20 banks.  They are deader than Elvis, and the microsecond that the Fed stops backstopping the counterparty risk, the credit market will lock up as tight as a constipated owl AGAIN.  There is no way out but through, and we have to write the bad paper off (yes, off, not down).  This reinstated GS act works to try to make it a little harder to do this again.  So would a modest anti-trust effort (say –– no single bank could hold more than 5% of all US accounts).  We haven't fixed any of the mortgage mess yet –– the real correction is still to come.

So it is OK for the banksters to line up at the Fed discount window, get billions interest free (read your tax money and borrowed money using your property, even in Texas, as collateral) and play the market with it with no concern for failure including shorting their own customer's portfolios, and give 10% of it out as bonuses for their best banksters to retain and even recruit more?  These same banksters using other peoples money to invest in the market then turn around and manipulate the same market, with little or no regard for failure (too big to fail).  Goldman Sachs even brags about it in their prospectus.  "We not only invest in the markets, we make the markets."

Large investment banks, with seemingly unendless supplies of US currency, should not be allowed to play with and manipulate the equities markets.  It is not good business.

PS: I don't "hate" any legitimate US business.  I am an economic nationalist.  The only thing I "hate" is what is currently happening to my country economically.

It doesn't require lending institutions to write bad loans.