Earlier this evening, the Senate Banking, Housing and Urban Affairs Committee passed its version of H.R.4173: Wall Street Reform and Consumer Protection Act of 2009. (It's over 1,300 pages, not including more than 400 amendments, with links to all down below.)
Senate Banking Panel Passes Sweeping Finance Reforms
The Washington Independent
By Mike Lillis 3/22/10 6:20 PM
They weren't kidding when they said this evening's markup of finance reform legislation would be a speedy affair.
The Banking Committee took less than an hour to pass the bill -- along a party-line vote of 13 to 10 -- and send it to the chamber floor. The quick process is an indication that Republicans, who've introduced hundreds of amendments designed to dilute the reforms, plan to stage their fight on the Senate floor, where they'll likely have more cover from conservative-leaning Democrats who've historically protected the banking industry.
Here's a comparison between the House and the Senate versions of the legislation, courtesy of the NY Times: "
Comparing the House and Senate Financial Reform Bills."
Here's the Senate Banking Committee's summary of the bill.
And, here's a list of the more than 400 proposed amendments to the bill, with the GOPosaurs in the Senate proposing well over 300 of them, including 109 from Senator Shelby (R-AL), alone. Add Corker's (64), Johanns' (33), Bunning's (28), Vitter's (25) and DeMint's (19) amendments, and you'll account for 277 of those amendments; and, that doesn't even include the other four Rethugs on the Committee.
Needless to say, the Rethugs are going "balls to the wall" to cutoff progress--in every way, shape and form--on this legislation. And, we're talking a whole new level of ugliness from these gutter-slime, as I demonstrate just a little farther down, below.
Senators Plan To Flood Financial Reform Bill With Nearly 400 Amendments
Shahien Nasiripour
Huffington Post
First Posted: 03-19-10 09:00 PM | Updated: 03-20-10 08:03 AM
Senators plan to offer nearly 400 amendments to the financial reform bill the Senate Banking Committee will take up on Monday -- ranging from Democratic provisions to strengthen the proposed consumer protection agency to Republican amendments calling for new rules potentially compromising the independence of the board that sets financial accounting standards.
Sen. Richard Shelby, the top Republican on the committee whose bipartisan negotiations with committee Chairman Christopher Dodd broke down last month, is responsible for 109 amendments alone. Earlier this week, Shelby, of Alabama, told the Huffington Post that "probably not a lot" will happen in the committee, indicating that the real battle will come on the Senate floor.
No sh*t.
YEAH, THIS IS JUST WARMING UP...
From Krugman, this past Friday...
Who Woulda Punk'd It?
Paul Krugman
New York Times Blog
March 19, 2010, 8:26 am
Menzie Chinn wonders what constitutes a punk staffer, after John Boehner told bankers, "Don't let those little punk staffers take advantage of you and stand up for yourselves".
What Menzie doesn't understand is that this is how bankers think of anyone who stands in the way of their God-given right to have whatever they want. Consider this memorable passage from William Cohan's House of Cards, recounting Jimmy Cayne's reaction to Tim Geithner's reluctance to bail out Bear Stearns:
"The audacity of that [punk] in front of the American people announcing he was deciding whether or not a firm of this stature and this whatever was good enough to get a loan," he said. "Like he was the determining factor, and it's like a flea on his back, floating down underneath the Golden Gate Bridge ..., saying, `Raise the bridge.' This guy thinks he's ... He's got nothing, except maybe a boyfriend. I'm not a good enemy. I'm a very bad enemy. But certain things really--that bothered me plenty. It's just that for some clerk to make a decision based on what, your own personal feeling about whether or not they're a good credit? Who ... asked you? You're not an elected officer. You're a clerk. Believe me, you're a clerk. I want to open up on this ..., that's all I can tell you."
(Expurgated -- even though this was reprinted in the WSJ, I'm trying to protect the dignity of the Times. And he didn't actually say punk).
That really is the way these guys think and talk. And John Boehner has their back.
Boehner can bloviate all he likes; it's this bullshit (see below), virtual extortion which scares the crap out of Main Street.
Wherein Moody's, IMHO, the sleaziest of the credit ratings firms, plays Wall Street henchman and Main Street extortionist for its bankster clients...
(Does it get any more despicable than this? I'm sure it will. Like I said, we're just getting started.)
Moody's Warns Of Upcoming Bank Downgrades If Dodd Bill Passes, BofA, Citi And Wells At Greatest Risk
Zero Hedge
Submitted by Tyler Durden on 03/22/2010 14:33 -0500
Moody's says that if the Dodd bill passes in the substantially proposed form, the rating agency will likely need to cut various banks due to the elimination of assumptions about systemic support as some from a resolution authority is introduced. The banks that would suffer the most are: Bank of America- 4 notches from the current HoldCo Sr rating of A2, Citigroup and Wells Fargo both at 3, from A3 and A1, respectively, Morgan Stanley two notches lower from A2, and one notch for each of the following: BoNY (Aa2), JPM (Aa3), Goldman (A1), SunTrust (Baa1), and Regions Financial (Baa3).
From Moody's (Diarist's note: I had a problem with this link on my computer, you may access it by clicking upon the link, immediately above.):
Broadly speaking, our response to the Dodd Bill is similar to our response to the Frank Bill. Senator Dodd's proposal could lead to higher capital requirements, better liquidity, less concentrations and curtailment of risky activities -- all positives for U.S. banks' unsupported Bank Financial Strength Ratings (BFSRs). Unlike the Frank Bill, however, the Dodd Bill mandates that more derivative trades be done through exchanges, allowing customers to observe market pricing. Although such an arrangement promotes systemic stability, the greater degree of transparency will likely lead to lower spread margins in a product that is a sizable contributor to investment bank earnings for a select few U.S. banks.
For debt and deposit ratings, however, the Dodd Bill seeks to end "too-big-to-fail" by creating a legal framework that could allow for the resolution of a failing large bank holding company (as well as a large insurance company, securities firm, or other financial company). The legislation's objective is to resolve such a company without cost to taxpayers, but also with less disruption to the markets and the economy than would likely be the case if such a firm was subject to traditional bankruptcy proceedings. However, the market, particularly given the complexity and interconnectedness of the banks that are the target of this bill, does not isolate concern within a single institution. Therefore, the practical concern of risk contagion by investors will present practical barriers to the ability of the regulators to withhold support while also maintaining market stability that is fundamental to the health of the economy.
A key component of the Dodd Bill is that it attempts to keep the systemically important functions of the company viable and in operation while exposing unsecured creditors of the failed company to losses in accordance with their priority of claim. To the extent that such resolution authority were enacted into law, and to the further extent that we found it to be credible and likely to be used, we would need to reevaluate our systemic support assumptions that currently provide lift to the deposit and debt ratings for a number of U.S. banking companies (as highlighted in the following table).
I don't know about you, but I'd call this EXTORTION!
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THEN AGAIN, PAYBACK'S A BITCH!
As I--and many others have reported--investigations by the Department of Justice, the SEC and many others are in the wind. AIG, Goldman Sachs, Lehman Brothers and many others, including the latest matter, which is somewhat of a microcosm of the mortgage meltdown, in general.
OR, IS IT ALL JUST A BUNCH OF HOT AIR?
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TUESDAY'S NY TIMES EDITORIAL TELLS IT LIKE IT IS...
Real Reform in an Election Year
NY Times Editorial
March 23, 2010
The White House and Democratic leaders in Congress won't have much time to savor their victory on health care reform if they hope to achieve the next big goal: enacting financial regulatory reform before the midterm elections. A year and a half after the country's banking system nearly imploded, it is still operating under the same inadequate rules and regulations.
Unless President Obama throws himself fully into the fight, there is not much chance of pulling this off in an election year, when many lawmakers are more focused on deep-pocketed donors than on the public interest. The House passed a flawed reform bill last year. After months of talks that led to some compromises between Democrats and Republicans, no Republicans voted for the Senate's version when the banking committee passed it on Monday. That bill, too, is flawed, and the banks are lobbying relentlessly to water it down even more.
The NYT editors then get into the details of what must be fixed...
PROTECT CONSUMERS--the White House wants an independent Consumer Financial Protection Agency. The current bill caves-in to the GOP and places the CFPA in the Federal Reserve, inherently undermining the new agency's status and its ability to effectively regulate. The Times' editors tell us that making the new regulator a presidential appointee is one of the better aspects of this portion of the overall bill. However, the Senate bill allows other regulators to veto CFPA rules "in certain circumstances." True autonomy and enabling the new CFPA to maintain comprehensive rule-making and enforcement authority is necessary to put some teeth into this new entity.
REIN IN DERIVATIVES--the current bill enables much derivatives trading to occur "outside of transparent and fully regulated exchanges." It also permits regulators to use their own discretion "to exempt derivatives from full regulation. And it continues to block the states from imposing antigambling rules on unregulated derivatives deals, although many are purely speculative."
ENDING TOO BIG TO FAIL--the latest version of the bill includes "resolution authority." This is a good thing, since the "authority" (entity) will be enabled to shutdown the "too-big-to-fail" firms, if (again, this is totally discretionary--and that's not a good thing) their "imminent failure threatens the system." But, again, this dovetails with derivatives regulatory oversight--which is set to be inherently limited, per the paragraph above--so, one cannot oversee something if they can't see it!
The Times' editors tell us that real reform must put a saddle on the too-big-to-fails, as well as insure that other firms don't become "too large and complex," down the road.
We're told in today's editorial that the current bill makes it much costlier for banks to "engage in activities that increase their size and complexity. Those are important safeguards."
However, as has been reported elsewhere, the bill totally ignores any near-term, specific implementation of the Volcker Rule--calling instead for a six-month study of it followed by a three-year implementation process for it--which, in my layman-speak, allows our country's largest banks to hold onto their tickets to the Wall Street casino (i.e.: proprietary/in-house securities, etc., trading).
The Times calls it a "needless delay," and urges President Obama to call out the Senate on it. (I totally agree with this assessment, IMHO.)
A watered-down bill could be easier to move through the Senate, and certainly would be welcomed by bank lobbyists. But weak reform would be worse than no reform, because it would entrench the status quo under the guise of change.
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So, here we are, barely 24 hours after the passage of healthcare reform, and it's out of the frying pan and into the proverbial fire.
Suck it up Kossacks! Onward and upward!
To be continued...