There he goes again. Wall Street is fighting tooth and nail to emasculate the Dodd-Frank Bill, focusing its artillery on the Volcker Rule, namely those sections calling for the elimination of proprietary trading by banking institutions. In case you may have forgotten, it was the unbridled proprietary trading bundled with sham housing instruments and derivatives and out right speculation that brought us to the near collapse of the financial system in 2008.
According to yesterday's The New York Times, Wall Street made its broadest assault yet against new regulation on Monday, taking aim at a rule that has come to define the battle over how to police banks in the aftermath of the financial crisis. And there, joining the fray was that forever pliant Wall Street apologist, New York Times columnist and CNBC talking head, Andrew Ross Sorkin, weighing in with a less than feeble endorsement of the Volcker Rule ("in the long term it makes a lot of sense") while impugning it in the length and breadth of his column.
To underscore the downside of adopting the Volcker Rule he cites that paragon of banking virtue and responsible husbanding of a banking charter, Jamie Dimon, Chairman of JPMorgan Chase. Dimon, the very epitome of the type of banker the Volcker rule is meant to protect us, the public, from. With Dimon at its helm, proprietary trading, and all it embodies with its casino mentality, has become perhaps the key aspirational profit center and motivator of his institution (please see "Is JPMorgan a Bank or a Government Funded Casino? 06.09.09).
Sorkin goes on to enlist comments of critics of the Volcker Rule, highlighting their argumentation that removing big banks from making their own bets will remove liquidity from the system, thereby driving up costs. He then brushes aside Volcker's defense "The restrictions on proprietary trading by commercial banks legislated by the Dodd Frank Act are not likely to have an effect on liquidity inconsistent with the public interest." Volcker's comments continue to say that there should not be a presumption that "ever more liquidity brings a public benefit."
Then Sorkin goes on to dismissively counter Volcker's position, "Yet Mr. Volcker doesn't offer any explanation for why it won't, except to argue that less liquidity might tamp down speculative trading."
One would think that Mr. Sorkin, with his extensive CV and daily exposure to the workings of the market needn't have had to dig very deeply to cite the extensive proprietary trading banks the likes of JPMorgan, Morgan Stanley, and Goldman Sachs have undertaken, speculating in a vast range of commodities such as crude oil, copper etc. and financial instruments.
In crude oil alone their proprietary trading has helped bring about ever higher gasoline and heating oil prices at the public's cost and to the banks' benefit. A feat achieved by chartering massive VLCC crude oil tankers (200,000 Dead weight Tons or more), filling them with millions of barrels of oil at a cost of hundreds of millions if not billions of dollars. Then keeping the tankers at sea for months at a time to speculate on the prospect of ever higher oil prices yet. In doing so, by taking oil off the market in the front months, they cause the spot price of oil to rise, and for all of us to pay more for petroleum based products such as gasoline, diesel fuel, heating oil, etc.
As "banks", they have access to the Fed Window and its diminutive interest rates. Money lent to banks as banks, with an implied responsibility to use those funds to assist the economy by lending to businesses and householders, perhaps even renegotiating mortgages, and generally being agents of economic growth. Certainly not taking money out of the system, to speculate on oil and other commodities while simultaneously having their speculative initiatives result in ever higher prices to be paid for by the consuming public. And why not, if their speculative positions blow up, there is the government and the ole boys club at the Treasury and the Fed to bail them out.
But then again this is not the first time, among other issues, that Mr. Sorkin has come to the defense of Wall Street interests in the guise of knowledgeable commentator. There was also the paean to Goldman Sachs(please see "One Crowd Still Loyal To Goldman Sachs" NYTimes 06.18.10).
To put the icing on the cake, Sorkin in yesterday's column, quotes Jamie Dimon, "Paul Volcker, by his own admission has said he doesn't understand capital markets. He has proven that to me." Spoken like a veritable croupier angered by a paying house guest who doesn't want to play at his gaming table.
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Dennis M. Kelleher: Where Is Jamie Dimon When You Need Him?
1.An organism that lives in or on another organism (its host) and benefits by deriving nutrients at the host's expense.
2.derogatory. A person who habitually relies on or exploits others and gives nothing in return.
When banks and the greed-driven people who direct them pursue often obscene profits at public expense, even up to threatening the entire society with ruin; that is parasitism!
When government and the revolving-door players who come to government from the financial "industry", influence public policy to benefit their previous pals and employers, and then when that string has played-out return to the banks and other financial "institutions" to gain millions/billions from the policies and de-regulation they influenced/created as government (public) employees, that is parasitism.
The definition of parasite is entirely apropos to these people who feed/profit off the public body/society as at this point in time, directly causing very great harm to millions we are experiencing now.
Where is the medicine of accountability and strong regulation; the integrity/honesty of ostensibly public servants, to rid our society of these parasites or at least limit their ability to subvert or evade laws passed to protect the public from their greed and criminal scheming?
Re-instate Glass-Steagall!
OWS!
Maybe the threat of nationalization can keep them in line.
The Banksters Robbed us of trillions. The federal Reserve has given them , at .004%, about 16 trillion more, plus 10T$ to foreign banksters. That becomes 260T$ with fractional reserve, that more than the value of the world businesses. Arrest the Banksters for the Fraud: SWAPS and CDO's. Federal reserve system.
Watch "the Money Masters"
http://www.themoneymasters.com/
http://webskeptic.wikidot.com/money-masters-transcripts-part-24
Bankster now literally own us.
http://en.wikipedia.org/wiki/File:Estimated_ownership_of_treasury_securities_by_year.gif
Phase out fractional reserve while issuing greenbacks. That creates a debt free monetary system
“The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity.” Abraham Lincoln
Kucinich http://www.monetary.org/wp-content/uploads/2011/10/HR-2990.pdf Greenbacks!
http://www.change.org/petitions/support-hr-2990-the-national-emergency-employment-defense-act-of-2011
The Ratio of Finance and insurance versus private industry went from 5%/40% in 1980, to 44%/5% today.
"In crude oil alone their proprietary trading has helped bring about ever higher gasoline and heating oil prices at the public's cost and to the banks' benefit. A feat achieved by chartering massive VLCC crude oil tankers (200,000 Dead weight Tons or more), filling them with millions of barrels of oil at a cost of hundreds of millions if not billions of dollars. Then keeping the tankers at sea for months at a time to speculate on the prospect of ever higher oil prices yet. In doing so, by taking oil off the market in the front months, they cause the spot price of oil to rise, and for all of us to pay more for petroleum based products such as gasoline, diesel fuel, heating oil, etc.
WE NEED TO MAKE THIS PART OF A PLANK OF THE DEMOCRATIC CONTRACT WITH AMERICA
1) Shut Down all these Futures Speculators in all these commodities, where they are neither a producer, or consumer.
THE RESULT IS ALWAYS THE SAME, they want to use their INSIDER position to rig / game the system; so that they can make an almost guaranteed profit, at everybody else's expense. This is similar to what the Enron-Energy-Traders did back in 2000-2001 when they created artificial shortages to jack up California'a electricity bills by 300%.
In 1973 we had an oil "shortage". People waited for hours in line to receive 5 gal of gas. The economy went into recession and all the while tankers sat off Cape May in Del. Bay, all low in the water with full holds. This is big business in action. Screw the public and the country in the name of profits - mostly for the executives. Wall St. can bitch and moan about how much this constrains business but they are also faced with an obvious contrary. Clinton raised taxes - on near everything and the economy flourished. The rich got richer - because they had to actually work at it, but thy did anyway. The argument is giving them a "tax holiday free ride" is ludicrous as they too become lax, and along with their normal callous and greedy nature - things just
When the now loosing team now can't fill the arena (make money) it threatens to leave the city unless it receives special tax treatment and a new stadium. (the socialization of banker losses/ moral hazard). The fans have now had to pay four times for a crooked player: paying Mr. Chamberlain directly, paying for the lost bets, paying for a new arena and making up for lost tax revenue. Mr. Chamberlain is much more wealthy than before!!!!
Athletes aren't allowed to bet on their own teams. They could throw the game and the integrity of the sport would be compromised. All the Volker rule really is is a rule preventing athletes from betting and fixing the game. I do not understand why the morals and correct thing to do is sports is so clear and unquestioned, but when it comes to bankers they are allowed special privileges that wouldn't be allowed under any other system.
We want Glass-Steagal back!
The first Amendment I would propose would be to insert the Glass Steagall Act (repealed during the era of the infamous Phil Gramm) into Dodd-Frank.
It is bad enough that these banks can borrow from the Fed at nearly zero interest rates but it adds insult to injury that banks can use those borrowed funds along with our deposits to make casino and horse race bets driving up the cost of oil and other commodities at their whim..
Meanwhile be thankful that we have the benefit of the Volcker rule so that banks are not running up the risks by betting their own capital reserves on the riskiest of ventures. The FDIC needs to be much more agressive in the enforcemnt of Volcker.
It seems so elementary that benks need these two regulations that I am amazed that some journalists out there think we are still dumb enough to be bamboozled.