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Obama To Take More Control Of Markets

From a cheering Associated Press:

Administration unveils financial system overhaul

By Martin Crutsinger, AP Economics Writer

WASHINGTON – The Obama administration on Thursday unveiled a sweeping overhaul of the financial system designed to impose greater regulation on major players like hedge funds.

Treasury Secretary Timothy Geithner told lawmakers that the changes are needed to fix the flaws exposed by the current financial crisis, the worst to hit the country in seven decades…

The administration’s proposal, which will require congressional approval, would represent a major expansion of federal authority over the financial system. It would impose tougher standards on financial institutions judged to be so big that their failure would represent a risk to the entire system.

It also would extend federal regulations for the first time to all trading in financial derivatives, exotic financial instruments such as credit default swaps that were blamed for much of the damage in the meltdown.

The administration also wants larger hedge funds to be required to register with the Securities and Exchange Commission.

In addition, the administration proposed the creation of a systemic risk regulator to monitor the biggest institutions. Geithner did not designate where such authority should reside, but the administration is expected to support awarding this power to the Federal Reserve.

The plan also includes a measure that Geithner and Fed Chairman Ben Bernanke discussed before the committee on Tuesday to give the administration expanded powers to take over major nonbank financial institutions, such as insurance companies and hedge funds that were teetering on the brink of collapse

The administration, pushing for quick action on its reform agenda, sent Congress a 61-page bill dealing with the expanded powers to seize control of nonbank institutions late Wednesday.

The House committee, chaired by Rep. Barney Frank, D-Mass., has indicated it could move on the measure as early as next week…

Geithner on Thursday provided only a broad outline of the other proposals. Many thorny details will need to be worked out.

Administration officials promised that the remaining issues would be hammered out in consultation with Congress with the goal of getting legislation approved as quickly as possible

Gosh, what will the Democrat party do for funding if they crack down on hedge fund manipulators like George Soros?

And where will they find other high-paying jobs for their children, like Chelsea Clinton?

In addition, the administration proposed the creation of a systemic risk regulator to monitor the biggest institutions.

Hopefully that vital job will go to someone with the integrity of a Rahm Emanuel or a Barney Frank or a Chris Dodd or a Maxine Waters.

This article was posted by Steve Gilbert on Thursday, March 26th, 2009. Comments are currently closed.

6 Responses to “Obama To Take More Control Of Markets”

  1. pdsand

    “The administration’s proposal, which will require congressional approval”

    I wonder how long that lasts…

  2. proreason

    The last 65 days remind me of my junior high days when there was some kind of event in the gym and the kids would mill around outside the doors until they were suddenly thrown open.

    Then there would be a mad insane dash as the entire mob of kids ran, pushed and elbowed to claim seats next to their friends.

    Now it’s like there is a pell-mell rush to implement every crazy policy that these nuts have been cooking up in their fetid brains for the last 5 decades.

  3. TwilightZoned

    “The administration’s proposal, which will require congressional approval, would represent a major expansion of federal authority over the financial system. It would impose tougher standards on financial institutions judged to be so big that their failure would represent a risk to the entire system.”

    Hummmm…the government is the biggest financial failure and causing the entire nation to be at risk. This is code for nationalizing the banks.

    I realize during the 1980s Continental Illinois Bank was nationalized then later sold and something similar was done with the Savings & Loans in the 1990s. However, with everything that’s happening I suspect the true goal is for permanent nationalization.

  4. haljett

    Scary times indeed. While frustrated by the deeds of some financial folks without principles, it’s equally frustrating to see all bankers vilified. I can’t help but feel that we’re in for something akin to the French Revolution, myself.

    It is amazing to me that in the face of this news that Wall Street ended up yesterday and today.

    The only indication that there is still a modicum of uncertainty at the how DC is handling everything is gold. It’s still above $900 and continue to show strength.

    I was watching the COMEX with the realtime widget ExactPrice ( http://www.learcapital.com/exactprice ) and it was stunning to see what happened to gold when Geithner made that comment slip about being open to a world currency. It shot up like crazy. After he clarified it the price came back down some but not completely. Tells me just how much uncertainty, or distrust, or fear – take your pick – there is in markets.

    • proreason

      Wall Street is up because it is relieved that there is any kind of plan at all. The market is highly likely to fall as the challenges become obvious and as the moronistration flops around like a dead fish.

      One of the things I’ve learned this time around is that uncertainty is a huge driver of market drops.

      And regarding your comment about some finacial folks without principles, I will remind you that the financial industry worked just fine since the 30’s until the government decided to start dictating who should get loans. If you were a banker, and you were being forced into insane business practices, and you saw a way to make some short term profits before the bottom fell out, you would probably elect the same path. Blaming the industry is like blaming Jews who did shameful things to survive in the 30’s and 40’s.

      The CRIMINALS in all of this are Drooling Barney and the boys, pure and simple. EVERY SINGLE THING that comes out about the financial industry is CYA by the greatest government criminals of all time.

  5. artpa

    Seems to me the whitehouse had congress write in the contracts (bonuses) clause into the AIG bailout just so they could do this from the outrage.


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