Wednesday, July 14, 2010

Fwank FinReform Sucks, But........ SS, DD

Ritholtz finds another gem:

“While skeptical about the bill’s benefits, Americans don’t want a return to the days before the financial markets suffered their biggest turmoil since the Great Depression: A plurality of respondents says they have become more supportive in recent months of tougher regulations. By a three-to-one margin, Americans have grown more favorable to stronger regulation rather than less. Even Republicans have become more inclined to stricter oversight.”

--Quoting Bloomberg News.

Clearly, the repeal of Glass-Steagall was a friggin' disaster in the making, as were a number of other re-arrangements of bank regulations.

Volcker spoke extensively of what he thinks were deregulatory concerns and mentions both Reagan and Greenspan. Barry also carried a very interesting remark on the deregulation of rate ceilings, (which began in the 1970's, by the way):

...banks were suddenly free to charge more for risky loans, and that encouraged risky lending. The subprime mortgage market grew out of this dynamic, as did the panoply of complex, mortgage-backed securities, credit-default swaps and heart-stopping leverage that finally produced the 2008 crisis.

So the short take on Fwank/Dudd: SS, DD.

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