Obama Financial Reform bill maintains Too Big To Fail bailouts: Geithner admits to Brad Sherman (D-CA) the financial reform bill will allow Treasury to give unlimited funds in future ‘failures’..
Update: CSPAN has the full hearing up here, see here for the testimony of the examiner who did the forensic accounting on the Lehman collapse. He starts out explaining how highest levels of regulators were ‘concerned’ about Lehman in 2007 but did absolutely nothing, not the NYFed not the SEC. None of them took action.
Treasury Secretary Tim Geithner tells Rep. Brad Sherman that “You cannot know in advance how much money you will need to resolve a Lehman.” This confirms the Democrats want to set up a bailout fund without limits.
Perfect. The big behemoths who brought us to our knees will get nifty low rates since everyone will know once this is passed, their debts are protected by taxpayers funds in bailouts of hand selected collateral debtholders by Treasury in future failures…kill this bill it is a giant gift to JPMC, GS and whomever is making money on FAN FRED FHA Citi BofA, see the excellent analysis at Naked Capitalism:
In a letter to Senate majority leader Harry Reid and minority leader Mitch McConnell, luminaries including former SEC Chief Accountant Lynn Turner, former Labor Secretary Robert Reich, hedge fund owner Jim Chanos, former Lehman Brothers Vice Chair Peter Solomon, former S&L investigator Bill Black, former Senate Banking Committee Chief Economist Rob Johnson, economists Dean Baker, Barry Eichengreen and others pointed out that Dodd’s proposed financial reform legislation wouldn’t have prevented the current crisis … and won’t prevent the next crisis.
Dodd himself has admitted that his bill “will not stop the next crisis from coming”.
The House Financial Services Cmte heard testimony from SEC head Mary Schapiro, Bernanke and Geithner on the regulatory failures during Lehman. I support a well regulated free market. Not a market with tons of regulations that no one enforces on the select few who payoff the regulators or otherwise ‘capture’ them.
It was CRYSTAL clear that they HAVE THE POWERS THEY NEED already in the case of Lehman, and they were victims of REGULATORY CAPTURE and failed to act. Tim Geithner specifically admitted to Ed Royce R-CA that yes as head of NY Fed under his purview Lehman FAILED stress tests, yet they did..nothing. Here is Royce telling Geithner LAST JULY that the permanent bailout authority they had in the bill then was unacceptable
Sarbanes Oxley was the regulation needed, Dick Fuld signed the financial statements under SarbOx he should be prosecuted. We got better results from Dubyah with Enron for Gawd’s sake.
They don’t need more unchecked power to proclaim bailouts and seize large American firms without Congressional approval and dole out bailouts a la GM and Chrysler in the way they deem fit. That is exactly what the Dodd bill does.
Team Obama has repeatedly told Mark Warner D-VA, Chris Dodd, D-Countrywide, Blanche Lincoln -D-AR, to pull out of negotiations with the GOP, specifically Bob Corker R-TN and Shelby R-GA. They portray Obama as entering the fray early on this one. HA! AS IF!! Dodd and Shelby and sometimes Corker have been hammering at this for over a year already. Pullllease….
This is all kabuki from the team of ubergeniuses that funded Os campaign and who apparently have killed the Volcker Rule..again. We really have no one to fight for us here IMO.
The GOP will not allow the Volcker Rule which would effectively limit some of the risks of collapse and TBTF,(since we have no earthly idea what the banks are really holding, Repo 105s and all) (and the bank taxes the Left is levying globally will assure financial business doesn’t flee to UK for now) and the Dems are in bed with these guys calling the shots on regulation, see Dodd, Chris and the WH which wants to leave the rule vague and they claim that is by design:
…Banks for months have groused that the Volcker rule, which proposes to ban banks that take deposits from trading securities for the firm’s benefit only, doesn’t offer a well-defined description of what constitutes proprietary trading activity.
Banks including JPMorgan Chase, Morgan Stanley and Goldman Sachs argue that there are gray areas in which they are engaging in proprietary trading to hedge their own activities as financial intermediaries with clients.
“What [lawmakers] are outlining is the idea of what we are trying to prevent,” the official said. “These are guidelines. What the banks are saying is, ‘We want that to be written into the law — the details of which kind of transactions should count — and I think that that’s a bit disingenuous.”…
Exile on Main Street baby. Hey I’ll party with the people patriots anyday of the week. When push comes to shove, people look out for each other here in ‘the Middle’. I love Main St. It is my favorite part of Disneyland in fact, lol.
April 20, 2010. Tags: Brad Sherman Tim Geithner, Chris Dodd Financial Reform bill, Ed Royce, Financial reform bill, Financial Regulatory Reform, Goldman Sachs, Lehman Brothers bankruptcy collapse regulators, Lehman collapse hearing, Lehman Hearing House Financial Services, Main Street, Obama Financial Regulatory Reform Bill, Treasury resolution bailout authority in financial reform bill. Economy, Finance, Housing, Obama Administration, Politics, Popular Culture, TARP, Taxes, Wall St.