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Harry Reid: Wall Street’s Joyride Is Over

From the Wall Street Journal:

Senate Passes Finance Bill

Biggest Regulatory Overhaul of Wall Street Since Depression Moves Closer to Law

By GREG HITT And DAMIAN PALETTA

MAY 21, 2010

WASHINGTON—The Senate on Thursday approved the most extensive overhaul of financial-sector regulation since the 1930s, hoping to avoid a repeat of the financial crisis that hit the U.S. economy starting in 2007.

The Senate approved the most extensive overhaul of financial-sector regulation since the 1930s, hoping to avoid a repeat of the crisis that hit the U.S. economy starting in 2007.

The legislation passed the Senate 59 to 39 and must now be reconciled with a similar bill passed by the House of Representatives in December, before it can be sent to President Barack Obama to be signed into law.

The controversial measure, supported by the Obama administration, sets up new regulatory bodies and restricts the actions of banks and other financial firms. It is designed to try to make order of the cascading regulatory chaos that ensued in 2008 when mammoth banks and some unregulated financial firms collapsed, and public funds were used to save them. Among other things, the legislation would:

Establish a new council of "systemic risk" regulators to monitor growing risks in the financial system, with the goal of preventing companies from becoming too big to fail and stopping asset bubbles from forming, such as the one that led to the housing crisis.

• Create a new consumer protection division within the Federal Reserve charged with writing and enforcing new rules that target abusive practices in businesses such as mortgage lending and credit-card issuance.

• Empower the Federal Reserve to supervise the largest, most complex financial companies to ensure that the government understands the risks and complexities of firms that could pose a risk to the broader economy.

Allow the government in extreme cases to seize and liquidate a failing financial company in a way that protects taxpayers from future bailouts.

Give regulators new powers to oversee the giant derivatives market, increasing transparency by forcing most contracts to be traded through third-parties instead of only between banks and their customers. Derivatives, which are complex financial instruments, are often used to hedge risk. Speculative trading in the contracts led to losses at many banks in the 2008 crisis.

"Simply, the American people are saying, ‘you’ve got to protect us,’ and we didn’t back down from that," said Senate Majority Leader Harry Reid (D., Nev.). "When this bill becomes law, the joyride on Wall Street will come to a screeching halt."

That’s right, kill the ‘golden goose’ once and for all.

Opponents of the bill worry that the government is overreacting, and over-regulating the financial industry. They worry the measures will crimp the free flow of capital in the U.S. economy.

"It will inevitably contract credit," said Sen. Judd Gregg (R., N.H.), who says the Senate bill "is probably undermining the system…probably making for a weaker system."

Sen. Gregg was one of 37 Republicans to vote against the 1,500-page bill. But the legislation ultimately passed with a narrow bipartisan majority. Four Republicans joined with 53 Democrats and the Senate’s two independents in support of the package. Two Democrats voted against the bill, and two senators weren’t present for the vote.

Now Congress will need to reconcile the Senate bill with a companion House package adopted in December on a 223-202 vote, with 27 Democrats joining unanimous Republican opposition.

The outlines of the two bills are largely the same. But there are more than a dozen notable differences that will need to be reconciled during negotiations that are expected to start within days. Despite the differences, the Senate passage virtually ensures that some type of financial regulatory reform will be finalized by this summer.

Leading the negotiations will be House Financial Services Chairman Barney Frank (D., Mass.), who has said he would like to have a compromise package by the end of June…

Thank God we have the right people working on this.

This article was posted by Steve on Friday, May 21st, 2010. Comments are currently closed.

27 Responses to “Harry Reid: Wall Street’s Joyride Is Over”

  1. NoNeoCommies says:

    We just aren’t smart enough to protect ourselves from slick, greedy, heartless liars.
    Too bad that is what the people elected.

  2. Right of the People says:

    Harry, your joyride sadly will be ending this November. Enjoy it while it lasts, sucker.

  3. proreason says:

    There is 0 chance that this bill is anything other than another fascist power grab.

    I say that with 100% confidence without knowing anything about the bill. The simple fact that the repugnant Harry Reid lets praise slither from his curled lips is proof positive that the country will suffer immeasurably from this tragedy.

    All you have to know is who wrote it. They authors are criminals 1000 times greater than any business person could possibly be, even including the contemptable Goldman Sachs bottom-feeders.

    The Killer Whale teamed with the Great White Sharks to write a law to regulate the minnows.

    When we take back the country, we have to repeal this POS, reinstate Glass Steagel word for word, and force derivatives (and any future financial instruments) to be openly traded and fully disclosed to the public.

  4. mr_bill says:

    This whole darn thing makes me cringe:

    • Establish a new council of “systemic risk” regulators to monitor growing risks in the financial system, with the goal of preventing companies from becoming too big to fail and stopping asset bubbles from forming, such as the one that led to the housing crisis.

    The problem isn’t risk. High risk = high chance of failure or high reward in the event of a positive outcome. If these guys are so worried about risk, why don’t they do something about Fannie Mae and Freddy Mac, the organizations that lowered the standards on the loans they bought. Without their complicity, mortgage lenders would never have made the risky loans because they would have been stuck with them rather than being able to sell them to Fannie & Freddy. The “goal” of “preventing companies from becoming too big to fail” is really geared at preventing companies from becoming big. Commies hate large businesses, it undermines government’s ability to be the almighty savior and provider. Everytime the government “eliminates” risk in one area, the risk/opportunity migrates to a new area. This kind of government regulation creates new bubbles which are more concentrated and larger than the one it has “fixed.”

    • Create a new consumer protection division within the Federal Reserve charged with writing and enforcing new rules that target abusive practices in businesses such as mortgage lending and credit-card issuance.

    Don’t we already have Federal bureaucracies that do this? Do we need more? This is going to cause more problems than it will solve. I can’t wait until there is a “crisis” because one bureaucracy didn’t know what the other bureaucracy was doing.

    • Empower the Federal Reserve to supervise the largest, most complex financial companies to ensure that the government understands the risks and complexities of firms that could pose a risk to the broader economy.

    Ahhh, government telling private business how to operate. The government doesn’t need to understand the risks, investors do. That is what a prospectus and a qualified financial adviser are for. The government did such a piss-poor job evaluating Freddy and Fannie’s risk, even with all kinds of people waving red flags about it, why would we expect anything better here? This is a naked power grab to allow the gov’t to meddle in the financial businesses.

    • Allow the government in extreme cases to seize and liquidate a failing financial company in a way that protects taxpayers from future bailouts.

    What about protecting the stockholders and bondholders who are having their assets seized without due process? I seem to remember something in the Bill of Rights about that. There is already a process for this, it’s called bankruptcy. Government has never had an obligation to bail out any company, never. Let the markets sort themselves out and keep the government out of it. If this bill is going to end risk and eliminate the possibility of “too big to fail” corporations, why does the federal government need this power?

    • Give regulators new powers to oversee the giant derivatives market, increasing transparency by forcing most contracts to be traded through third-parties instead of only between banks and their customers. Derivatives, which are complex financial instruments, are often used to hedge risk. Speculative trading in the contracts led to losses at many banks in the 2008 crisis.

    Why do we need an intermediary for these transactions? This will only drive up the cost of these transactions and actually create more opportunity for fraud. I’ll wager dollars to donuts that Goldman Sachs will be handling the third-party trading, hence the payoff for the folks at GS. Further, if the banks were the losers, rather than the customers, why would this change any of that? The banks will still be trading derivatives, just through an intermediary now. If derivatives are used to hedge against risk, as the article says, wouldn’t it be a good thing to allow more trading of derivatives not less?

    The goals of the bill do not make any sense and the government has failed to address a large portion of the problem…the federal government!

    • Rusty Shackleford says:

      Mr Bill,

      You have basically outlined the modus operandi of this regime. Anything already established is considered “junk” and they are troweling on a new layer of regulation and unnecessary bureaucracy making the whole thing cumbersome due to its own weight.

      Failure of all this new “legislation” is inevitable for all the reasons you have stated simply because it probably contradicts existing legislation and because it has been made (intentionally and ridiculously) complex.

      This, of course, is what they want so that any questions and protestations will have to be decided by the regime, as interpreted by the regime, for the regime.

      Excellent post. Well said.

    • proreason says:

      The biggest risk this country has, by a hundredfold, is the government.

      No private business has even a sliver of the power of the federal government. No industry has even a sliver of the power of the federal governemnt. If they did you wouldn’t see them on bended knee to a socialist presdident every time he farts.

      And as far as “assessing risk” goes, the government has proven itself over and over to be monumentally incompetant. Viet Nam, Watergate, Jimmy Carter, S&L Crisis, Energy Policy, Education, Fannie and Freddie, $800 billion bailout, Welfare, the Border, Social Security, Medicare, Medicaid…..those and dozens of other pitiful failures are the root cause of EVERY single problem this country has.

      For the government to place itself as the overseer of financial risk is like putting Stalin in charge of human rights.

    • tranquil.night says:

      For the government to place itself as the overseer of financial risk is like putting Stalin in charge of human rights.

      There’s really no better way to underscore it. The regime would sooner pick a very dirty fight over a very losing issue before they’d have us all look at the right hand, which is reaching for the unprecedented power grab. That is ultimate bail-out authority – or nationalization authority in other words (as they can regulate any business into crisis through bureaucracy and policy) – is what you’ve all outlined essentially. Bill’s looking at the mechanisms, Pro’s looking at the problem, Rusty’s got the motive.

      From Heritage: columnist Ross Douthat described the Dodd bill as just one example of “the real story of our time. From Washington to Athens, the economic crisis is producing consolidation rather than revolution, the entrenchment of authority rather than its diffusion, and the concentration of power in the hands of the same [political] elite that presided over the disasters in the first place.”

      Just gotta keep drillin’ it into the estranged non-lib Dem voters’ and so-called “Independents” brains. Drill baby drill. It’s the Government, stupid friend.

    • proreason says:

      JohnMG. We have a minor disagreement. It doesn’t diminish my opinion of you and Rusty, both of whom I hold in high esteem, or the other poster, who I barely know. I don’t expect to agree with anybody about everything. In the greater scheme, it’s a minor issue anyway.

      I don’t have hurt feeling in the least and I wasn’t intending to insult anybody else.

      We need to stay focused on November. That’s the pitch of decision.

  5. JS says:

    BTW, odd nobody noticed that the new stalwart conservative, who captured Teddy’s senate seat, Scott Brown voted with the Democrats on this bill. How can this guy sleep at night… What a utter dissapointment but honestly I am not suprised.

  6. proreason says:

    People noticed.

    Would you have prefered the alternative?

  7. JS says:

    @proreason
    If Brown keeps voting with the Dems I don’t really see how the alternative would have been different.

    • JohnMG says:

      He’s just waiting for the opportune moment to switch partys. Looks like he wants more than his 15 minutes of fame.

      I think it was Beck who cautioned that we wait six months before we started high-fiving over this guy. After all, he had no real conservative credentials….his biggest redeeming quality being he wasn’t a Democrat or related to the Kennedys.

      Just like that sheriff’s election in Nebraska, our elections have ALL become a game of chance. And like Nancy’s health care bill, you won’t know what you have until it’s too late to undo the damage.

      How distressing.

    • proreason says:

      It’s an interesting question.

      Do you swallow hard an accept someone who doesn’t meet all your criteria or not. A lot could be said on both sides of the matter.

      Winston Churchill hated Stalin with a blind passion. One of his biggest decisions was whether to join an alliance with him to defeat the Nazis. If he hadn’t made that decision, the world would be talking German today.

      inho, the most consequential event since then will happen this November. It’s bigger then Viet Nam. It’s bigger than the fall of the Iron Curtain. It’s bigger than 9/11. I think it’s on a par with WWII, and before that you have to go back to the Civil War. Just because the boy satan smiles and chuckes that he’s a really moderate person doesn’t fool me for a second. His goal is to turn me into a serf.

      I would ally myself with Charles Manson to defeat Obama.

      But go ahead and knock Scot Brown if you want.

      You guys are probably really rich and have yourself some islands that you’ll be moving to soon.

    • JohnMG says:

      You make me laugh, pro.

      I’ll give you a twist on the old adage, “If I had your money, I’d burn mine”. If you had my money, you couldn’t start a fire large enough to burn yours!

      Don’t own any islands, and haven’t any desire to leave this country…..nor to leave it to this idiot cabal to destroy. Not without a fight. But the point remains, just like with SC appointees, what one ends up with is often very different (and disappointing) from what one presumed to be getting. And Brown is beginning to shape up as one of those disappointments.

      Would I have taken the alternative? Not on a whiskey bet. Do you really think Churchill was thrilled with the choice with which he was presented? Hardly. His subsequent writings revealed as much. But he wasn’t thrilled with Roosevelt either, whom he accused of being afraid of the ‘Russian Bear’.

      And you aren’t the only who despises the fraud in the White House. My distaste for him began at the ’04 Democrat Convention. I told anyone who would listen at that time, that ‘somebody’ had plans for this “unknown” or he wouldn’t even be speaking in such a venue…..watch this space. Four years later ‘SOMEBODY’ gave birth to this turd!

      But if you think “go along to get along” leads anywhere other than a box canyon, it would be you who are delusional, not me. And I don’t think you are.

      So save your barbs for the opposition. Your admonition to “go ahead and knock Scot Brown if you want” would suggest that I (we) not voice our displeasure. I seem to remember a guy named Arlen Specter (and I’m quite well aware of Snowe, Collins, Graham, etc) that we kept around because we thought any Republican was better than what we might get. A couple of these stalwarts voted for “finance reform” (a real crock of crap) in the Senate today. So I guess we can’t be pissed about them either? Nonsense!

      The real lesson won’t necessarily be wrought in November ’10. It will be wrought in the next elections following November, where , if the people who we elect to replace those we boot from office don’t produce, we replace them at the first opportunity. And on, and on, and on.

      By the way, Critz got Murtha’s vacant seat campaigning like a TEA party conservative. The Dems who voted for him won’t be disappointed because they knew he was only posturing. In a district where the two-to-one voter distribution favored the Democrat, the guy with the D by his name prevailed. That’s what we’re up against, and I’m not real thrilled about that, either, but that’s the reality.

      Anyway, you’re welcome on my island, pro. Just remember to pack some SPF-35 in with your cammies and your ammo. I don’t intend to go out quietly but I’ll probably need some help. Just don’t bring Charlie Manson with you. He’d be the first son-of-a-bitch I “rejected”. ;-}

    • Rusty Shackleford says:

      I agree, wrong is wrong. Doesn’t matter what side of the street you’re walking on.

      I agree with pro that “there’s no such thing as a moderate democrat”. That has been proven time and again this past year and longer.

      I am at odds with Republicrats who occasionally, like a busted clock, are right maybe twice a day. To reach for the middle is to have your hand burned. Scott Brown may have been successful in staving off the guaranteed healthcare debacle, but look how that turned out.

      We need tough, adamant, unrepentant, unyielding conservatives in office. Not some see-saw, wishy washies like McCain. Or even Brown.

      For to give Brown a pass is to say it’s ok if they vote hypocrite now and again. We got o-care shoved down our throat anyhow. I firmly believe we need the republicans to be the party of not only “no” but “hell no”.

      Maybe even “stick it up your a__, no”

    • proreason says:

      Who’s giving Scott Brown a pass? Certainly not me. The lack of a negative is not a positive.

      But if you guys are looking to live in a conservative purist paradise, good luck with that.

      MY point is that there is one thing that overrides everything else, and I’m pretty sure most people visiting this site agree. If we don’t get the Moron out of there, starting in Novmember, Katie bar the door.

      And how dissing Scott Brown contributes to that one iota, please enlighten me.

      To the contrary, if enough conservatives diss him, it will drive him into the waiting arms of fascists with pocketfuls of money, recording contracts for his daugher, jobs for his wife and promises of wealth for his family……and that’s if he doesn’t get pissed off. Frankly, saying doodly about the guy before 2012 is, shall we say, “thoughtless”.

      And none of this is “a barb”. It’s common sense.

      With Drooling Barney, Reaper Reid, Bride of Chuckie Shummer, Thunderbutt, Little Timmie, The Moron, Al Toad, Maxine Waters, Charley Rangel, The Witch …..need I go on……working day and night to turn us into a 3rd world cesspool, why anyone would say one word about Scott Brown gobsmacks me.

      But here we have 3 usually smart guys piling on the guy.

      Unbelievable.

    • JohnMG says:

      …”if enough conservatives diss him, it will drive him into the waiting arms of fascists with pocketfuls of money,…..”

      If all it takes is a little criticism of a really dumb move to push him where you seem convinced he’ll end up, all that proves to me is that’s where he was headed all along. If that is what happens, he had no principles to begin with.

      Did it ever occur to you that loudly criticizing an obviously stupid vote might move him back to “common-sense-land?

      He could have held out until the changes that the drooler and Kerry, et al assured him would be included in the compromise bill were really in there before he voted for cloture. Instead, he did the Stupak number based on a promise from Dodd, Kerry, Frank…..in short, all those you listed as your prime targets for defeat.

      Think about it, pro. All it will now take is a simple majority once this is released out of committee. And it will be presented, voted on, and passed. You can take that to the bank. All before November

      As for “three usually smart guys piling on the guy”, I make no boast as to always being right, but from that comment, you leave little doubt that you may be of that mind. Based on past performance,do YOU trust the word of Dodd, Kerry, and Frank?

      Surely not!

      PS I’ve yet to call your intelligence into question, and don’t intend to, certainly not over a difference of opinion. But in a game of ‘take-no-prisoners, even one defector is too many. “For want of a nail, a shoe was lost…….”

      PPS. And ‘conservative purist paradise’? You’ve got me confused with somebody else.

    • proreason says:

      I’ve thought about it and made a clear case.

      Criticizing Scott Brown is counter-productive and about # 28,397 on the list of the country’s current problems. He isn’t even frustrating. Everybody knew he wasn’t going to be another Jim DeMint. I doubt you imagined that, but those who did need to pay closer attention.

      I’m still happy Brown won the seat of the most liberal nut in congress. The alternative would have been a rubberstamp of the MoronReidPelosi Cabal. It will take a lot more than one vote on a bill that is relatively inconsequential compared to the other atrocities of the fascists to persuade me that he is a major problem.

      And don’t worry about questioning my intelligence. I’m married :-). Mrs proreason keeps aware me of how disfuntional I am.

    • JohnMG says:

      I’m not questioning your intelligence. I’m wondering why you’re questioning mine?

      Just to clear it up for me…..If I criticize him, he turns into a money-grubbing liberal? Is that your position? How about, if I don’t criticize him, he thinks everybody’s good with his positions? That my silence cannot be perceived as tacit approval? Are you saying that isn’t just as legitimate an argument as yours?

      What about that simple majority vote for passage of legislation? That’s not important? What about a one-vote majority to seat Kagan? That’s not important? That, my friend, is one vote that will have consequences far eclipsing your “# 28,397 on the list of the country’s current problems”. A vote like that will impact ALL the country going forward.

      Every vote that advances ANY of the moron’s agenda is harmful. I guess it’s academic now, but are you comfortable with passing the “financial reform” bill to see what’s actually in it? If Obama gets enough of his agenda passed before November with the complicity of Brown’s vote, November is meaningless, as is 2012.

      You say you’ve made your case, but in so doing, you have intimated that I’m some sort of elitist…….(“probably really rich and have yourself some islands that you’ll be moving to soon”)….., that I’m an inflexible idealogue……..(“looking to live in a conservative purist paradise”)….., and intellectually challenged and incapable of analytical thinking…..(“usually smart guy[s]”)….. because I happen not to agree with your asessment of the topic. I find this to be a bit presumptuous, not to mention rigid, coming from someone with whom I generally agree.

      But that’s OK. I know you’re wrong on at least three counts. ;-}

    • BigOil says:

      Remember Reagan’s 11th commandment “thou shalt not speak ill of any fellow Republican”. Advice that is pertinent when the country is on the verge of liberal destruction. All arrows should be trained on the nearest Demonrat.

    • JohnMG says:

      I’m not teed off at anybody…..as a matter of fact, I could take issue with myself sometimes. I like Reagan’s 11th comandment, BigOil, but don’t you remember the run up to the ’08 election? Seems McCain was taking some major-league shots from a host of posters here, including me. But I voted for him anyway.

      And pro, don’t take a little of mental jousting as ire. Actually, I learn something from every verbal engagement, and like I said above, I could pick my arguments apart using my own past performances as evidence. If the stakes weren’t so high, we might all find this comical. Sometimes I’ve just gotta vent. ;-}

  8. wterrier says:

    @mr_bill
    Thanks for your comments. Great points. Very, very vague language don’t you think? Notice that FRE FNM not even mentioned in the bill.

    • Steve says:

      “@mr_bill”

      Just a reminder. If you hit the “reply” link under each comment, you can reply more directly to the poster.

  9. canary says:

    I’m sure Harry Reids assets are buried on his shooting range in the desert. Maybe that’s where Hoffa lay.

  10. Mithrandir says:

    This much is clear: Barak Obama is the first black Jimmy Carter. Maybe Clinton was the first black president, but our actual first black president is the first black J.C.

    *************I remember back in the 70s****************

    ~Weak president on foreign affairs
    ~Alienating our allies
    ~Apologizing and emboldening our enemies
    ~In charge of a horrible economy
    ~Getting on t.v. at every opportunity to be a nuisance to the public
    ~Blamed Americans, not government, for our current malaise
    ~Misguided and terrible domestic policies

    At least Carter had a job before politics, and served in our military. God, I wish we had Carter again, and not this train-wreck!

    • BigOil says:

      Don’t forget his ‘malaise’ speech and the misery index. I think it is time we resurrected the misery index – because Barry will easily challenge Jimmah as the most miserable President.

  11. BillK says:

    It’s only a matter of time before the financial markets also move overseas.

    The Democrats will hail this as having “finally brought Wall Street under control” as thousands of Wall Street workers are laid off and financial firms close and relocate elsewhere in the world where free trade of commodities is not only allowed but encouraged…


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