Twin Lights said: "A modernized version of Glass–Steagall is needed.
Period." I could not agree more!! We were safe from financial meltdowns
that endangered the financial health of the country for over 60 years because of
the Glass-Steagall Act. Its unwise repeal in 1999 through the
Gramm–Leach–Bliley Act allowed the banks to gamble with their
depositors money. They were able to reap their private profits, but because
they were too big to fail, we had to collectively take the losses. The country
still has not recovered. I am categorically against this system of privatizing
the profits while socializing the losses. Banks are too important to the health
of the economy to be allowed to gamble with their depositors money.The real problem is that the campaign finance system lets the banks buy
Congressmen and Senators. It has happened with both Democrats and Republicans,
and the Republican hero of the moment, Mitt Romney, even wants to repeal the
totally insufficient Dodd-Frank Act. We need more stringent, not fewer
regulations of the financial sector!
DNews, you're losing credibility if you can't tell the difference
between "deep-seated" and "deep-seeded." Did you fire all your
proofreaders in the latest purge?
They have nothing to fear....JPMorgan now "owns" Utah
Senator Mike Lee.
To "Fitness Freak" the irony is that prior to the 1940's banks had
fewer regulations than they do now, yet none became "too big". It
wasn't until the government regulated bad business practices to banks that
they began to be problematic, things like subprime loans and derivatives. The idea of "too big to fail" is just a scare tactic. If one of
the mega banks collapsed, it would be painful, and take a few years to settle
out. The problem is that the government is afraid to allow us to feel the
impact of failure. Think of it like an old growth forest. Eventually the trees
are so old and diseased that they are a hazard to the rest of the forest.
Rather than proping up and trying to save the old tree, it is better for the
forest as a whole if they come down and allow the younger more vibrant trees to
take over.You have stated what the biggest problem is these days.
We have a very huge lack of enforcement of federal laws by the federal
government, from banking to immigration.
I'm afraid that any attempts at banking reform will be about as effective
as "The Little Dutch Boy" who plugged the leak in the dike with his
thumb. Problem is, the leaks are global (as CLM pointed out) and
too-big-to-plug. The derivates virus has infected banks and investments on just
about every continent (at least in the Western world). The extent of the coming
damage is beyond the ability of most of us to predict or comprehend. Simply
stated, it's too late to fix it. All we can do is hang on as the flood
waters rush in.
If asked which industry will be the site of the next disaster, financial or
otherwise, I would need just one clue - Which industry is spending the most on
Congress, lobbying for votes to give it LESS regulation? Whatever Dimon says to
Congress, his industry's lobbyists will be delivering the REAL message,
"let us alone, and there will be money in it for you." You can bet every
one of those Tea Party "reformers" will be listening, because it takes
money to keep your seat.
"Redshirt" When Glass-Steagall act was repealed it allowed banks to
become "too big to fail" thus, the TARP bailouts. Having so much of the
liquidity concentrated in so few hands caused politicians (both parties)to
become beholden to the cries of the banking industry.IF banks would
have been allowed to fail; I would probably agree with you. But they
weren't.I do agree that there are MANY regulations in the
banking industry, but they obviously aren't working, or aren't
enforced.Maybe the answer is fewer regulations, but MORE
Too late. Their reputation exploded three years ago and is no longer teetering,
it has crashed. Ivy League geniuses, too smart to fail, Wall Street whizkids,
"ethical business practices" and other labels faded long ago.
The problem with reinstating Glass-Stegall (or even the Volcker Rule designed to
stop speculative trades) is that global economy has grown exponentially since
the 1930s when the Glass-Stegall act was put into place. The huge scale and
complexity of 21st century world economy as well as financial sectors such as
Wall Street means that simply separating investment banking from commercial
banking will give only an appearance of lowered risks and could obscure
underlying risks in the system.The derivatives market has become
almost impossible to detangle. It's useless to tell commercial banks they
can be involved only in non-speculative derivatives. The derivatives market is
now so big and complicated that it is near impossible to ascertain a
derivative's default risk.A huge problem with no easy answers.
As another poster lamented elsewhere, "Thanks again, Leviathan!"
Why do we need to regulate things further? What investment is 100% secure?To "Fitness Freak" what deregulation are you talking about? In
the past 30 years when banks have been "deregulated" it actually added
regulations to the specific portions of investment banks being deregulated.Did you know that the Banking Industry is more regulated than the
healthcare industry? Did you know that those are the two most regulated
industries and coincidentially are the same industries that politicians complain
about the most? Could there be a relationship between regulation and how big of
a problem an industry is accorind to politicians?
@ Fitness Freak"I don't see anything at all wrong with
going back to regulating banks. The only "winners" in bank deregulation
have been the banks, NOT consumers."Again, repeal
Gramm-Leach-Billey & Reinstitute Glass-Stegall.Jim Cramer (CNBC)
at one point put (JPMC CEO) Dimon on a pedestal... Now that is a fate worse than
a Corleone kiss of death.
I don't see anything at all wrong with going back to regulating banks. The only "winners" in bank deregulation have been the banks, NOT
consumers.BUT - the bigger issue here is for shareholders,
especially large pension fund shareholders to become more involved in
"self-regulating" banks and other large companies via their votes which
was intended in the first place.Banks (or any business) MUST be
allowed to fail in order for shareholders to begin doing their "due
diligence". Up to now that hasn't happened.
Marxist: Why is it “ok” if the federal government loses billions of
other people’s money (Solindra scam, GSA scandal, fast and furious
debacle, secret service prostitution melt down, TSA wastes and on and on) but we
go nuts if Wall Street has a problem? I am not saying J.P Morgan is innocent but
why do we demand justice with them and not with the sins of the government? And
by the way, didn’t Obama bailout out J.P Morgan? Why are we not angry
about the billions of taxpayer funds that were wasted? I wish we could be as
demanding of purity with our government as we are with Wall Street!
Trust cannot and will not be fully restored until there are some regulatory
firewalls and safety valves are in place.Yes, banks like JP Morgan
can absorb a shock of this size. But what about other banks?We
cannot depend on banks to self-regulate. This should be obvious by now. A
modernized version of Glass–Steagall is needed. Period.We
keep fooling ourselves into thinking that we have entered a new era of banking
and economic enlightenment. It is simply a lie each generation falls into
because we want to believe we can do what we want without consequence."What has been will be again, what has been done will be done again; there
is nothing new under the sun."
I know what to do. Let's have the Fed shovel money into JP Morgan while we
slash medicare. Sound fair to me!