In discussions with Wall Street executives, Republicans are striving to make the case that they are banks' best hope of preventing President Barack Obama and congressional Democrats from cracking down on Wall Street....
"I sense a lot of dissatisfaction and a lot of buyer's remorse on Wall Street," said Rep. Eric Cantor (R., Va.), the second-ranking House Republican and a top Wall Street fund-raiser for his party.
Which "crackdown"? The one for criminal fraud on CDO's? The one for criminal fraud on MBSs? The one for 'frontrunning' trades? Or for passing off MBS' as 'good stuff' to investors while short-selling the damn things? Or the matter of valuing Merrill Lynch while chairing BofA?
Next, the Stupids will be wheedling and pleading for TEA Party activists.
I have a two-word response for the Stupids.
Germane commentary from Baseline Scenario:I testified yesterday to the Senate Banking Committee hearing on the “Volcker Rules” (full pdf version; summary). My view is that while the principles behind these proposed rules are exactly on target – limiting the size of our largest banks and preventing any financial institution backed by the government, implicitly or explicitly, from taking big risks – the specific rule changes would need to be much tougher if they are to have any effect.
He goes on to state that Goldman would have failed in 2008 except for its sudden gain of a "banking charter"--and names ANOTHER Goldman exec who, just by co-incidence, was a NYFed governor.
The Republicans (and Goldman Sachs) want a “resolution authority” that would give the government greater power to take big banks through bankruptcy. But even assuming there were sufficient political will to use such power, as Mr Corrigan and John Reed conceded at yesterday’s hearing, because this would be only US-centric (and there is no prospect of a G20 or other international agreement anytime soon) it simply would not work for huge cross-border firms. When such a firm fails – and Mr Corrigan made a point of emphasizing that half of Goldman’s meteoric growth since 1997 has been “global” – a resolution authority will do you no good at all.
...Goldman and the other big Wall Street firms have already won big on this round. They will plow even more money into defeating political candidates who have opposed them – for example, on credit card legislation. The Republicans see this coming and are rubbing their hands with glee.
With their incentive structure intact – they get the upside and regular folk get the downside – and their closest friends on their way back to power, Big Finance is ready to roll into the next great global boom-bust cycle.Well, that's another reason to:
1) Buy More Ammo, and
2) F*&^ the Republican establishment.