Scott Brown comes through on FinReg bill for MA – Dems prepare to gut Volcker Rule and exempt MASS Mutual Funds…

Well I predicted this was a done deal when Sen Brown voted for cloture on FinReg. He would only have done so if the Dem leadership guaranteed the big mutual funds in Massachusetts were protected (contrary to the wailing of Allahpundit at HA), they will be:


…Democrats worked Wednesday on an agreement that would weaken a provision known as the Volcker Rule, which would bar banks from investing their own money in hedge funds and private-equity firms.

Under the terms of the discussions, large banks could be allowed to invest up to 3% of their capital in these funds. This is higher than a 2% threshold under consideration a few days ago. Details remain in flux.

The changes are designed to win the support of Sen. Scott Brown (R., Mass.), who had said he would vote against the overhaul if financial companies, notably the big mutual funds based in his state, weren’t allowed to make small investments in different types of funds. Sen. Christopher Dodd (D., Conn.) and Mr. Brown met Wednesday to discuss a potential deal…….


June 24, 2010. Tags: , , , , , , . Economy, Obama Administration, Politics, TARP, Taxes, Wall St. 1 comment.

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”.

In fact, the bill is wholly ineffective, failing to address the core things which need to be done to stabilize the economy. See this, this and this….

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.

Main St, U.S.A. Disneyland

April 20, 2010. Tags: , , , , , , , , , , , . Economy, Finance, Housing, Obama Administration, Politics, Popular Culture, TARP, Taxes, Wall St. 1 comment.

Updates: These short positions GS took are the AIG CDS’ we lost billions on?! Golden Slacks getting hammered by SEC fraud charges…

Update: Oh shxt! I didnt realize the short positions they are talking about are the damn AIG CDS!!! Oh snap! These are the frakkin CDS we lost BILLIONS on via AIG! h/t doc holiday:

Skeptical CPA: December 2008Re: “Some of AIG’s speculative bets were tied to a group of [CDOs] named ‘Abacus,’ created by [GSG]. … In what amounted to a side bet on the value of these holdings, AIG agreed to pay [GSG] if the mortgage debt declined in value and would receive money is it rose. … The plan has resulted in banks in North America and Europe emerging as winners: They have kept the collateral they previously received from AIG and received the rest of the securities’ value in the form of cash from Maiden Lane III. … It also has been a double boon to banks and financial institutions that specifically bought protection on now shaky mortgage securities and are effectively being made whole on those positions by AIG and the [Fed]”, my emphasis, Serena Ng, Carrick Mollenkamp & Michael Siconolfi at the WSJ, 10 December 2008.”

Update: Cramer is all over CNBC saying his confidential high sources say GS had a position , long, in the CDO, really laying it on shilling for Golden, really sad. Saying its caveat emptor the German bank who took losses is responsible, while he is saying GS was long the position. Shill Jim shill. wow some guy(silvan raines, sp?) says Cramer takes money from GS to his face on the air just now, heh.

Update: Here is Boehner stmt, he calls GS Pres Obamas top Wall St Ally, oohhh, nice:

“These are very serious charges against a key supporter of President Obama’s bill to create a permanent Wall Street bailout fund.  Despite President Obama’s rhetoric, his permanent bailout bill gives Goldman Sachs and other big Wall Street banks a permanent, taxpayer-funded safety net by designating them ‘too  big to fail.’  Just whose side is President Obama on?

“Instead of permanent bailouts for President Obama’s Wall Street allies, Republicans believe the best way to protect taxpayers is by reforming Fannie Mae and Freddie Mac, the government-sponsored companies that sparked the meltdown by giving high-risk loans to people who couldn’t afford it.”

NOTE: Goldman Sachs was President Obama’s top Wall Street contributor during the 2008 election cycle, donating nearly $1 million to his campaign.

Update: John Boehner GOP minority leader House, just put a wicked spin on that ball, his statement said these charges against GS a partner in Pres Obamas Fin Reg Plan are very concerning, that the FIn Reg Reform Bill will protect GS as too big to fail, Boehner said, whose side is President Obama on? oooooohhhh!! ^5 to Boehner

Update: So I was thinking the Volcker Rule is gonna make a BIG comeback off this, ya know? I mean WSJ was just declaring it dead, again, this week and I do not see how the banks are gonna fight Volcker Rule and the Consumer Protection Thingy in the face of the headlines the lamestream put together off this. And it is things like this that kill the markets for everyone, thanks GS you frakkers.

12:51pm EST: DOW down 153 now, back under 11k, like Spinal Tap, it goes to eleven..that’s about all that number was worth…S&P back under the big 1200 the traders were so excited about…GLD, OIL, all down…

Update: Steve Liesman – Paulson’s right hand man, Pelligrini,  was source of confirmation for the fraud charges in re his selection of the ‘lousy’ subprime securities that went into the CDO. He left Paulson in 2009. Steve says what Paulson did is likely not illegal, the issue is disclosure and that is all on GS…

Paging Andrew Cuomo, will Andrew Cuomo please file an indictment on the white courtesy phone….

Update: WSJ has the SEC complaint up in pdf here

Update Q/A Adam Schapiro of FoxBiz asks other fin firms did this, on synthetic CDOs like Deutsche Bank, are they facing charges?

ongoing investigation is the answer

DOW is tanking, down 75 now, GS down 20 (12%)

Q- Why Paulson not charged?

A- Paulson didnt make the representation to the long investors, GS did.

Update:11:11 am est:  SEC conf call LIVE on CNBC now!

they chose which MBS would make up this CDO, J Paulson had significant role in building product, had incentive to choose worst rated MBS to put in the CDO and then they took a short position against it

the prospectus for the long investors in the CDO revealed none of this including Paulsons role..

long investors lost $1b, paulson made $1b

Sing with me!

Karma chameleon baby



SEC: GS misstated, omitted key facts related to subprime products

SEC: (John) Paulson & Co had hand in structuring CDO in question

SEC grew a pair, hoocodanode!

April 16, 2010. Tags: , , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, Popular Culture, TARP, Wall St. Comments off.

Obama throws the Tall Man under the bus…

As any Gen X-er can tell you, you gotta be really careful with the Tall Man…he comes back….

Volcker is back under the bus (for now). As we  noted here last November, Jamie Dimon among others killed the return of Glass Steagall once already (and I am in no position to challenge Jamie’s call on this, the CDS issue is much more problematic IMO, THAT is where they take the proprietary info and make bets against their clients IMO)…

After the EPIC FAIL in Massachusetts, Obama dragged Volcker out of the closet they were keeping him in and tried to look ‘tough’ on bankstas….that is of course short lived since Jamie and Blankfein funded Obama’s campaign….now the WH has rolled over and showed its belly to the bankstas for some more scratches….hard to have sympathy for Volcker, he is one of the fools who backed Obama early and made him look moderate as a result.

Charlie Gasparino has it at DailyBeast:

Barack Obama owes Paul Volcker a lot, but he apparently owes the fat cats on Wall Street even more. That’s the only reasonable conclusion that can be made from the president’s timely and, in some ways, bizarre about-face on the former Fed chairman’s plans to reform the financial industry and prevent another meltdown.

As first reported by the New York Post, Volcker’s bank-reform idea—the one trotted out by the president with Volcker standing at his side just hours after Republican Scott Brown won Teddy Kennedy’s seat and vowed to help crush Obama’s economic agenda—has been nixed in favor of a watered-down version that bank chiefs like J.P. Morgan CEO Jamie Dimon and other Obama supporters on Wall Street are advocating.

…Sources tell me a coalition of Wall Street heavyweights from Dimon to people like Larry Fink, the head of money-management powerhouse BlackRock—Obama supporters all—made their opposition to the plan well-known to the administration. The message was clear: Wall Street, which helped elect Barack Obama with an unprecedented support for a Democratic presidential candidate (Goldman Sachs was the second largest contributor to the president’s campaign), was ready to start backing the opposition of the so-called Volcker Rule….


February 26, 2010. Tags: , , , , , , , , , , , . Finance, Obama Administration, Politics, Popular Culture, Wall St. 5 comments.

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