House, Senate leaders finalize details of sweeping financial overhaul

Quote :

"Key House and Senate lawmakers approved far-reaching new financial rules early Friday after weeks of division, delay and frantic last-minute dealmaking. The dawn compromise set up a potential vote in both houses of Congress next week that could send the landmark legislation to President Obama by July 4. Lawmakers pulled an all-nighter, wrapping up their work at 5:39 a.m. -- more than 20 messy, mind-numbing hours after they began Thursday morning. "It's a great moment. I'm proud to have been here," said a teary-eyed Sen. Christopher J. Dodd (D-Conn.), who as chairman of the Senate Banking Committee led the effort in the Senate. "No one will know until this is actually in place how it works. But we believe we've done something that has been needed for a long time. It took a crisis to bring us to the point where we could actually get this job done." Both the House and Senate must approve the compromise legislation before it can go to Obama for his signature. Despite myriad changes in recent days, Democrats appear poised to deliver a final bill that largely reflects the administration's original blueprint unveiled almost precisely a year ago. Although it would not fundamentally alter the shape of Wall Street or break up the nation's largest firms, the legislation would establish broad new oversight of the financial system. A new consumer protection bureau housed in the Federal Reserve would have independent funding, an independent leader and near-total autonomy to write and enforce rules. The government would have broad new powers to seize and wind down large, failing financial firms and to oversee the $600 trillion derivatives market. In addition, a council of regulators, headed by the Treasury secretary, would monitor the financial landscape for potential systemic risks. "The finish line is in sight. The bill that has emerged from conference is strong," Treasury Secretary Timothy F. Geithner said in a statement early Friday. "It will offer families the protections they deserve, help safeguard their financial security and give the businesses of America access to the credit they need to expand and innovate." Obama, speaking to reporters before leaving for a meeting of global finance ministers and central bankers in Toronto, said the compromise legislation includes "90 percent of what I proposed when I took up this fight." The president said he is committed to a "strong, robust financial sector" but wants to curb abuses and tighten oversight to make the financial system more transparent and safe."

Continued: http://www.washingtonpost.com/wp-dyn/content/article/2010/06/25/AR2010062500675_pf.html

The same people that helped caused this crisis (Dodd and Frank), failed to see the crisis coming, and have yet to understand what caused the crisis, have finally finished their grand solution to fix the whole thing. I think we're way beyond the point of no return already. If this bill passes, may God have mercy on our souls.

6/25/2010 11:36:17 AM

What solution would you recommend?

6/25/2010 11:39:49 AM

^^ That's right, Dodd and Frank were front-and-center on it, back when the Republicans had control of the House of Representatives.

6/25/2010 11:51:04 AM

^^I'd recommend running a legitimate budget, auditing the Federal Reserve, and letting businesses that make poor decisions fail.

^This has nothing to do with who was "in control of Congress." Take the partisan blinders off for a minute. Chris Dodd and Barney Frank are both on record as saying very early on that Fannie and Freddie were not any kind of risk, and that everything was fine. They thought the GSEs were great and would keep on trucking. They did not see the subprime mortgage crisis coming. They do not know what caused the subprime mortgage crisis. They're trying to regulate the outcomes of the crisis, without understanding the root causes.

Barney Frank and Chris Dodd have both been pawns for the Federal Reserve. They've done everything possible to stand in the way of a true audit.

6/25/2010 1:24:57 PM

I'm not against regulation of the derivatives market. I don't think we should ban them, but there should definitely be more adult supervision. Not sure what they mean by "failing financial firms" in terms of when the government can intervene.

6/25/2010 1:26:39 PM

The crappiest part to me is:

Quote :

"A new consumer protection bureau housed in the Federal Reserve would have independent funding, an independent leader and near-total autonomy to write and enforce rules."

I just can't think of an instance in the past when the federal reserve did anything that benefitted consumers

really not holding my breath that any meaningful change will occur









[Edited on June 25, 2010 at 1:32 PM. Reason : hold ya breath, we shakin it from right to left (FLIPMODE)]

6/25/2010 1:30:37 PM

Maybe not the consumers directly, but at least someone is looking out for the banking cartel, right?

6/25/2010 1:31:47 PM

Atleast it still has to pass Congress. Im actually interested to see if Republicans oppose it at all.

6/25/2010 1:48:59 PM

Well, at least a few Republican's are opposed to it....

Quote :

" On the House side, the final tally was 20 to 11 to approve the conference committee's report. On the Senate side, it was 7 to 5. The votes fell along party lines, earning no support from Republicans on the two panels. "

6/25/2010 1:52:40 PM

Depending on which economists you believe, the crisis was either exacerbated by or directly caused by the implicit promise of creditor bailouts. As this law would institutionalize this promise of bailouts for creditors, it should make the problem of systemic collapses larger and more frequent in the future. Depending, of course, how good a job the new super-regulator does at reading the minds of financial actors...

[Edited on June 25, 2010 at 2:31 PM. Reason : .,.]

6/25/2010 2:29:32 PM

just remember. you've got the wonderful CFPA that will help regulate those evil lenders. well, except for the auto companies. looks like the unions won again.

6/25/2010 2:52:28 PM

Quote :

"If this bill passes, may God have mercy on our souls."

Looks like someone hasn't a clue about this bill. Here, find one:

http://www.ritholtz.com/blog/2010/06/wall-street-reform-politicians-lie-media-applauds-america-suffers/

Quote :

"Actually, it is nothing more than window dressing."

As far as the people who caused it, which of these things did Fwank and Dudd have a direct hand in:

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"The irresponsible repeal of Glass-Steagall in 1999. The Commodities and Futures Modernization Act of 2000 by Larry Summers and Bob Rubin — the one that legalized the most destructive financial instruments of all, derivatives. The leverage exemption at the SEC in 2004, asked for (in person) and received by Hank Paulson and friends."

Quote :

"Take the partisan blinders off for a minute."

Odd statement considering you're trying to pin this crisis on these two knuckleheads.

6/25/2010 6:22:05 PM

Quote :

"The president said he wants to curb abuses and tighten oversight to make the financial system more transparent and safe.""

OK so when does he curb the abuses and tighten the oversight of Fannie Mae and Freddie Mac? Those two entities contributed a lot to the financial crises. Pres. Obama is so qucik to slam down private enterprise..but hardly ever reforms gov't abuse... or even criticise it very much. Gov't is his God.

6/25/2010 11:26:31 PM

Government being God is a non-partisan issue. Please don't confuse the words of small government Republicans with their actions.

More on this reform bill from Barry

http://www.ritholtz.com/blog/2010/06/stop-the-next-crisis-this-wouldnt-have-stopped-the-last-one/

6/26/2010 9:58:36 AM