The details of each of the items below is at the link:
• Merge the Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission. This would make the SEC let sectors of the financial world police themselves more. Well, in the last month, with Southwest Airlines, we’ve seen just how well that works with the Federal Aviation Administration. For years, we’ve seen how well that works with the Food and Drug Administration.
• Establish a federal insurance regulation office. Not a bad idea — if it didn’t pre-empt state insurance regulators, which Paulson’s bill would do.
• Set new federal mortgage regulation standards but keep oversight of subprime mortgages with the Federal Reserve. We’ve already seen just the mess that can produce.
• Let Goldman Sachs (Paulson’s previous stomping grounds), Lehman, and other investment “banks” have more access to the Fed’s discount window. In other words, corporate socialism for Wall Street, which will be relabeled as “neo-capitalism” or something similar.
• Missing — better oversight over the derivatives market and addressing the conflict-of-interest issues with ratings agencies such as Moody’s. Not surprising, since people from Goldman Sachs, among other places, were behind the drafting of the legislative proposal now on Paulson’s silver platter.
In other words, this is a bid for a last-minute Republican financial wet dream. But, it won’t just be GOPers. Remember, back in Clintonista land, more than half of Congressional Democrats voted FOR things such as Gramm-Leach-Bliley that helped get us in this mess in the first place.
The Street is using the issue of companies like Japan’s Nomura Holdings, which just picked London over New York for its HQ for its international operations, as stressing the need for even less regulation.
Bullshit, Jubak says. Blame the falling dollar instead.
Of course, since Big Ben Bernanke, abetted by Paulson, caused that falling dollar in the first place, we’re not going to hear more about that.
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