Oh, Look! Here's Trump looking out for the little guy
- Thread starter Frederick Foresight
- Start date
Attributing the "Financial Services Modernization Act" to Clinton is yet another fine example of the new Republican invention of "alternative fact"
You and the article are correct of course, Deregulation of Financial Services is a thoroughly Republican endeavor! Rubin and Greenspan both served in Clinton's administration and were in favor of the deregulation, but they too are Republicans. Greenspan an avowed one, and Rubin, an honorary one! He's a man who has steered clear of Party politics but has been a steadfast advocate of financial industry non-regulation, a very Republican concept! . Here is how Wiki described his position on regulation of CDOs and Swaps:
Rubin sharply opposed any regulation of collateralized debt obligations, credit default swaps and other so-called "derivative" financial instruments which—despite having already created havoc for companies such as Procter & Gamble and Gibson Greetings, and disastrous consequences in 1994 for Orange County, California with its $1.5 billion default and subsequent bankruptcy—were nevertheless becoming the chief engine of profitability for Rubin's former employer Goldman Sachs and other Wall Street firms.
Passing the GLBA became an urgent matter for Republicans after Citi's acquisition of Travelers Insurance, which was not permitted under current regulations. Citi obtained a temporary stay from the Fed, but something had to be done, and quickly. Gramm was able to get the GLBA attached to a must sign omnibus spending bill needed to keep the government functioning. It was late in the session not long before the Christmas recess. Anxious to get out of town, Senators were in no mood for further lengthy debate.. There was indeed, however, strong opposition from some prominent Democrat Senators including Daschle and Dorgan, and from independent Sanders. These Senators, and others, correctly predicted what would eventually happen.
Well before the GLBA passed in the Senate, TBTF was recognized as having committed the government to bailing out the largest financial institutions were they to fail. The GLBA would increase both the odds and potential size of bailouts needed. Even more serious, in my opinion, was the moral hazard created by banks knowing that they, and too their equity holders, would be rescued by the government. The very largest banks had less reason to act prudently with regard to the magnitude of leverage they employed compared to the smaller banks. Smaller banks could be allowed to fail, and as we saw during the crisis, many did. Their common stock holders, however, could suffer a total loss.
Here is an excerpt of Senator Dorgan's prescient remarks (1999) before the conference committee through which the bill passed. (underlining is mine.)
...
I want to describe why I think in many ways this effort is some legislative version of back to the future. I believe when this
legislation is enacted--and it is expected it will be--we will see
immediately even a greater level of concentration and merger activity
in the financial services industries.
When there is this aggressive move toward even greater
concentration--and the concentration we have seen recently ought to be
alarming to all of us--but when this increased concentration occurs, we
ought to ask the question: Will this be good for the consumer, or will
it hurt the consumer? We know it will probably be good for those who
are combining and merging. They do that because it is in their
interest. But will it be in the public's interest? Will the consumer be
better served by larger and larger companies? Bank mergers, in fact,
last year held the top spot in the value of all mergers: More than $250
billion in bank mergers deals last year. That is $250 billion out of
$1.6 trillion in merger deals. Of the banks in this country, 10
companies hold about 30 percent of all domestic deposits and are
expected to hold more than 40 percent of all domestic assets should the
pending bank mergers that now exist be approved.
After news that there was a compromise on this financial services
modernization bill in the late hours, a compromise that there was going
to be a bill passed by Congress, I noted the stock values of likely
takeover targets jumped in some cases by more than $7 a share. That
ought to tell us what is on the horizon.
Clearly this legislation is not concerned about the rapid rate of
consolidation in our financial services industries. The conference
report that is before us dropped even a minimal House bill provision
that would have required an annual General Accounting Office report to
Congress on market concentration in financial services over the next 5
years. Even that minimal step that was in the House bill was dropped in
this conference report.
What does it mean if we have all this concentration and merger
activity? The bigger they are, the less likely this Government can
allow them to fail. That is why we have a doctrine in this country with
some of our larger banks--and that ``some'' is a growing list--of
something called ``too big to fail.'' A few years ago, we had only 11
banks in America that were considered by our regulators so big they
would not be allowed to fail. Their failure would be catastrophic to
our economy and so, therefore, they cannot fail.
The list of too big to fail banks has grown actually. Now it is 21
banks. There are 21 banks that are now too big to fail in this country.
We are also told by the Federal Reserve Board that the largest
megabanks in this country, so-called LCBOs, the large complex banking
organizations, need customized supervision because their complexity and
size have reached a scale and diversity that would threaten the
stability of financial markets around the world in the event of
failure.
Let me read something from the Federal Reserve Bank president from
Richmond. This is a Fed regional bank president saying this:
Here's the risk: when a bank's balance sheet has been
weakened by financial losses, the safety net creates adverse
incentives that economists usually refer to as a ``moral
hazard.'' Since the bank is insured, its depositors will not
necessarily rush to withdraw deposits even if knowledge of
the bank's problems begin to spread.
Because the bank is too big to fail.
In these circumstances, the bank has an incentive to pursue
relatively risky loans and investments in hope that higher
returns will strengthen its balance sheets and ease the
difficulty. If the gamble fails, the insurance fund and
ultimately taxpayers are left to absorb the losses. I am sure
you remember that not very long ago, the S bailout bilked
taxpayers for well over $100 billion.
...
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Dodd Frank personally cost me about a quarter of a million dollars plus whatever else in opportunity cost, as a result of dodd frank smaller firms were less able to give leverage to traders forcing guys to go to shadier and shadier brokers in order to get leverage, i was doing just fine, and so was my firm before dodd frank now my firm is out of business so i ended up going to some shady offshore place that walked away with my, and many other traders money.
Commercial banks were safe places for money to be kept both before and after the GLBA..
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Fake news, pie.
Are you aware that Miss Conway is a lawyer and alternative facts is a legal term?
Alternative facts (law) - Wikipedia
https://en.wikipedia.org/wiki/Alternative_facts_(law)
Alternative facts is a term in law to describe inconsistent sets of facts put forth by the same party in a court given that there is plausible evidence to support both ...
But the party of fake news gave the term an entirely different definition, knowing that their followers would swallow it hook, line and sinker.
If you're determined to use this new made up out of thin air, fake definition of the phrase, perhaps you shouldn't go on to describe the democrat sec of the treasury as an "honorary republican", seeing as how that's about as fake as it gets.
What I am aware of is that Miss Conway was not using the term in the legal sense, but as a synonym for "lie". Alternative fact: something claimed to be a fact but with trivial effort can be shown to be false. Example: Fact: The sun comes up in the East ; Alternative Fact: The Sun comes up in the West.
you just claimed a democrat from Goldman Sachs (Robert Rubin) working for a democrat president (Clinton) was a republican.
All To hide the fact the bankers tied to the FED own both parties and Clinton...
read the last sentence below.
http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html
....
On Oct. 22, Weill and John Reed issue a statement congratulating Congress and President Clinton, including 19 administration officials and lawmakers by name. The House and Senate approve a final version of the bill on Nov. 4, and Clinton signs it into law later that month.
Just days after the administration (including the Treasury Department) agrees to support the repeal, Treasury Secretary Robert Rubin, the former co-chairman of a major Wall Street investment bank, Goldman Sachs, raises eyebrows by accepting a top job at Citigroup as Weill's chief lieutenant. The previous year, Weill had called Secretary Rubin to give him advance notice of the upcoming merger announcement. When Weill told Rubin he had some important news, the secretary reportedly quipped, "You're buying the government?"
All To hide the fact the bankers tied to the FED own both parties and Clinton...
read the last sentence below.
http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html
....
On Oct. 22, Weill and John Reed issue a statement congratulating Congress and President Clinton, including 19 administration officials and lawmakers by name. The House and Senate approve a final version of the bill on Nov. 4, and Clinton signs it into law later that month.
Just days after the administration (including the Treasury Department) agrees to support the repeal, Treasury Secretary Robert Rubin, the former co-chairman of a major Wall Street investment bank, Goldman Sachs, raises eyebrows by accepting a top job at Citigroup as Weill's chief lieutenant. The previous year, Weill had called Secretary Rubin to give him advance notice of the upcoming merger announcement. When Weill told Rubin he had some important news, the secretary reportedly quipped, "You're buying the government?"
Attributing the "Financial Services Modernization Act" to Clinton is yet another fine example of the new Republican invention of "alternative fact"
You and the article are correct of course, Deregulation of Financial Services is a thoroughly Republican endeavor! Rubin and Greenspan both served in Clinton's administration and were in favor of the deregulation, but they too are Republicans. Greenspan an avowed one, and Rubin, an honorary one! He's a man who has steered clear of Party politics but has been a steadfast advocate of financial industry non-regulation, a very Republican concept! . Here is how Wiki described his position on regulation of CDOs and Swaps:
Rubin sharply opposed any regulation of collateralized debt obligations, credit default swaps and other so-called "derivative" financial instruments which—despite having already created havoc for companies such as Procter & Gamble and Gibson Greetings, and disastrous consequences in 1994 for Orange County, California with its $1.5 billion default and subsequent bankruptcy—were nevertheless becoming the chief engine of profitability for Rubin's former employer Goldman Sachs and other Wall Street firms.
Passing the GLBA became an urgent matter for Republicans after Citi's acquisition of Travelers Insurance, which was not permitted under current regulations. Citi obtained a temporary stay from the Fed, but something had to be done, and quickly. Gramm was able to get the GLBA attached to a must sign omnibus spending bill needed to keep the government functioning. As noted in the article you linked to, it was just before the Christmas recess. Anxious to get out of town, Senators were in no mood for further lengthy debate.. There was indeed, however, prior strong opposition from some prominent Democrat Senators including Daschle and Dorgan, and from independent Sanders. These Senators, and others, correctly predicted what would eventually happened.
Well before the GLBA passed in the Senate, TBTF was recognized as having committed the government to bailing out the largest financial institutions were they to fail. The GLBA would increase both the odds and potential size of bailouts needed. Even more serious, in my opinion, was the moral hazard created by banks knowing that they, and too their equity holders, would be rescued by the government. The very largest banks had less reason to act prudently with regard to the magnitude of leverage they employed compared to the smaller banks. Smaller banks could be allowed to fail, and as we saw during the crisis, many did. Their common stock holders, however, could suffer a total loss.
Here is an excerpt of Senator Dorgan's prescient remarks (1999) before the conference committee through which the bill passed. (underlining is mine.)
...I want to describe why I think in many ways this effort is some
legislative version of back to the future. I believe when this
legislation is enacted--and it is expected it will be--we will see
immediately even a greater level of concentration and merger activity
in the financial services industries.
When there is this aggressive move toward even greater
concentration--and the concentration we have seen recently ought to be
alarming to all of us--but when this increased concentration occurs, we
ought to ask the question: Will this be good for the consumer, or will
it hurt the consumer? We know it will probably be good for those who
are combining and merging. They do that because it is in their
interest. But will it be in the public's interest? Will the consumer be
better served by larger and larger companies? Bank mergers, in fact,
last year held the top spot in the value of all mergers: More than $250
billion in bank mergers deals last year. That is $250 billion out of
$1.6 trillion in merger deals. Of the banks in this country, 10
companies hold about 30 percent of all domestic deposits and are
expected to hold more than 40 percent of all domestic assets should the
pending bank mergers that now exist be approved.
After news that there was a compromise on this financial services
modernization bill in the late hours, a compromise that there was going
to be a bill passed by Congress, I noted the stock values of likely
takeover targets jumped in some cases by more than $7 a share. That
ought to tell us what is on the horizon.
Clearly this legislation is not concerned about the rapid rate of
consolidation in our financial services industries. The conference
report that is before us dropped even a minimal House bill provision
that would have required an annual General Accounting Office report to
Congress on market concentration in financial services over the next 5
years. Even that minimal step that was in the House bill was dropped in
this conference report.
What does it mean if we have all this concentration and merger
activity? The bigger they are, the less likely this Government can
allow them to fail. That is why we have a doctrine in this country with
some of our larger banks--and that ``some'' is a growing list--of
something called ``too big to fail.'' A few years ago, we had only 11
banks in America that were considered by our regulators so big they
would not be allowed to fail. Their failure would be catastrophic to
our economy and so, therefore, they cannot fail.
The list of too big to fail banks has grown actually. Now it is 21
banks. There are 21 banks that are now too big to fail in this country.
We are also told by the Federal Reserve Board that the largest
megabanks in this country, so-called LCBOs, the large complex banking
organizations, need customized supervision because their complexity and
size have reached a scale and diversity that would threaten the
stability of financial markets around the world in the event of
failure.
Let me read something from the Federal Reserve Bank president from
Richmond. This is a Fed regional bank president saying this:
Here's the risk: when a bank's balance sheet has been
weakened by financial losses, the safety net creates adverse
incentives that economists usually refer to as a ``moral
hazard.'' Since the bank is insured, its depositors will not
necessarily rush to withdraw deposits even if knowledge of
the bank's problems begin to spread.
Because the bank is too big to fail.
In these circumstances, the bank has an incentive to pursue
relatively risky loans and investments in hope that higher
returns will strengthen its balance sheets and ease the
difficulty. If the gamble fails, the insurance fund and
ultimately taxpayers are left to absorb the losses. I am sure
you remember that not very long ago, the S bailout bilked
taxpayers for well over $100 billion.
...
That's why Piezoe is an unabashed fraud. If he truly were a libertarian, he wouldn't put forth so much effort to ALWAYS place the blame on the Republicans.
I've watched the video testimony of Greenspan, Rubin and Summers all conspiring to push Brooksley Born out and move forward with their de-regulation plans. All of this during the Clinton administration.