Here's the Official Link to the Overhaul
Obama's Financial "Regulatory Overhaul" is just increasing government with less efficiency than before.
Tim Geithner said that we have a new agency "modeled after the FDIC" to regulate ARM loans.
Why was the FDIC not involved with the non-bank lenders after the Commodities Futures Modernization Act?
The bankers knew they were selling krap. Not one unsecured credit default was sold by accident.
To regulate this effectively, all Congress had to do was reenact a modernized Glass Steagall Act, kill the Commodities Futures Modernization Act, run these subprime "commodities" through a clearing house and let the SEC create a department to regulate it.
Here are a few questions that the Republicans in Congress really need to ask.
1. Why do we need another department to regulate the subprime market?
-The Commodities Futures Modernization Act (pre2000) took the power from the SEC and gave it to the CFTC that failed to regulated it the subprime market in the last 10 years. Since the SEC is taking heat for it, can we just allow the SEC to regulate this?
-The Commodities Futures Trading Commission (CFTC) and the International Swaps and Derivatives Association (ISDA) did not do their jobs; the lack of communication was blamed for their inefficiency. Creating a new agency will result in even lower efficiency.
-Obama tried to put Gensler as the head of the CFTC. Geithner put Pickel as the head of the ISDA. Neither Gensler or Pickel did their jobs to regulate the multi-Quadrillion dollar credit default market. WHY ARE THESE TWO GUYS BACK IN THEIR OLD POSITIONS?!!
Note; the net value of this planet is roughly $70 trillion at this time. A quadrillion U.S. dollars does not yet exist. Source: Worldfactbook.
-Why were the Federal Reserve, the FDIC, the Comptroller of the Currency not given any power to regulate the non-bank lenders?
2) About the Federal Reserve
-Why are we giving them more power when they didn't effectively use the power they had to regulate the banks in the last 10 years?
-Why are we giving the Federal Reserve more power when they lowered interest rates to increase demand or ARM loans, creating artificial demand and disasterous volatility in the real estate sector?
-The Federal Reserve is supposed to be an independant organization. Why are we having the Treasury run it?
-On what credentials is Bernanke using to hire Finke (out of money manager contractors) to regulate this market? There is a serious conflict of interest in both parties.
3) About the Community Reinvestment Act
- The CRA blame is an embarrassing, racist fallacy. Although the CRA is a moral hazard, ***Republicans are the party that thrives on individualism not collectivism***. We are not true conservatives if the party thrives on collectivism, which the racism reflects.
With that being said, Compliance Technologies (who did a SCIENTIFIC, UNBIASED study) concluded that 72% of the subprime borrowers were caucasians. Many who were upper middle class speculators using ARM loans to speculate; others were CAUCASIAN realtors and real estate agents using ARMS to artificially increase the demand and price of real estate across our country.
We need to drop that blame, these things are driving people away from the Republican party. Although it's a moral hazard, in no way did it cause the recent collapse.
-Obama just mentioned that he is creating a new entity to "stamp out bad practices in the mortgage industry". Why is he doing this without mention of the CRA? Why not entrust the FDIC to create a department, not an entire agency to do this?
4. Obama's emphasis on Credit cards.
-Doesn't the FTC already regulate this? Why are we creating yet a new organization to regulate it instead of passing effective laws to empower the FTC to do it?
-Credit card defaults did not cause the collapse of the credit default market.
5. Resolution Authroity= BIGGER GOVERNMENT.
6. Why did they pass a $1 trillion bailout if this isn't going to be regulated correctly? The could've SUSPENDED MARK TO MARKET. Either we cancel the bailout and TARP and let free market discipline handle this, or we get real regulation. Unfortunately, the free markets provide better results.
7. Why were the people not allowed to pursue justice in a free market manner?
-Why can't shareholders and clients of failed banks and nonbank lenders during the subprime collapse sue for damages, prosecute for fraud and throw these bad CEOS in Kenneth Lay's old jail cell.
-The CFTC and the ISDA were not institutions that enforced regulation in prior years when Money Managers attempted to report the sale of fraudulent assets. Which is why the SEC should be handling this market.
Exactly what is going to make this possible in the future so that money managers can effectively protect their clients' assets?
-Just to give you an idea as to how badly these CEO's screwed themselves;
a)NASA RETURNS INFINATE WEALTH through the satellite for communiciations, mapping and science for roughly $40 billion taxpayer dollars.
b)the TECH sector returns appx. $200 billion/year in PROFITS after a few billion US Taxpayer dollars were dumpted into R&D.
c)AIG takes $180 billion taxpayer dollars and LOSES $65 billion in the last 2 consecutive years.
Wouldn't it be easier to bailout government and Congress's pensions WITHOUT the AIG middlemen?
Obama is wasting our time with this and the gangster bankers are laughing at us.