Crash of 2015 Won't Wait for Regulators to Rein in Wall Street

[dipsydoodle]

The financial system experiences a crisis “every five to seven years,” JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon told the Financial Crisis Inquiry Commission in January. By that measure, the next crash could come by 2015 -- years before new banking reforms are in place.

Many of the measures ordered by Congress and global regulators, aimed at cushioning the financial system in future crises, are years away from being implemented. The Basel Committee on Banking Supervision plans to give the world’s banks until 2018 to comply with limits on how much they can borrow. Parts of the Volcker rule, a provision of the new Dodd-Frank Act that would force firms to cut stakes in in-house hedge funds and private-equity units, may not go into effect for a dozen years.

Banks’ appetite for using borrowed money, known as leverage, for investing in complex, illiquid securities contributed to the worst credit crisis since the Great Depression. The pace at which curbs on leverage are likely to be imposed on the industry contrasts with the speed at which banks including UBS AG and Morgan Stanley are hiring to ramp up trading activities.

“Based on our experience of government’s ability to execute these things effectively and in a timely way, we are almost uncovered now from any future financial risk for at least another 8 or 10 years, and that’s a little scary,” said Roy Smith, finance professor at New York University’s Stern School of Business and a former banker at Goldman Sachs Group Inc.

http://www.bloomberg.com/news/2010-08-09/crash-of-2015-won-t-wait-for-regulators-to-buckle-wall-street-safety-belts.html

[sendero]

1. This "regulation"..

... is truly a joke. Another piece of placebo crap that Obama hopes we're all too stupid to see is pointless.

[BzaDem]

2. Something tells me you have no idea what is really in the bill, and would say that regardless of

what was in the bill.

[sendero]

3. I know what is in this bill....

... and not only is it way too little, it phases in so slowly it is way too late.

We don't have months, much less years, to stop the bankster abuse. A few years from now Obama will be considered the Nero of our time.

[BzaDem]

6. "A few years from now Obama will be considered the Nero of our time."

:rofl: :rofl: :rofl:

Only in your wildest dreams. Reading your posts, you wouldn't think that 89% of liberal Democrats approved of Obama.

[Raster]

9. I am a liberal, progressive Democrat and I voted for Change I Could Believe In.

Not the promise of change I could be deceived by.

[BzaDem]

10. You also voted for a candidate who campaigned against single payer as too extreme

and who shouted "bipartisanship" at every chance he got.

So the problem appears to be your expectations, not Obama's results.

[Raster]

12. And. What. Choice. Did. I. Have?

And you're so right: Obama's results are working out just fine, for some. Actually far, far too few.

[BzaDem]

13. I'm not saying you had a better choice. I'm just pointing out how you were not "deceived"

even if it might be a good talking point on a message board.

(There was a candidate in the Democratic primary that probably held positions closer to yours. The problem in that case was that he didn't get more than a low single digit percentage of the vote, among Democrats. Perhaps more time and energy should be spent examining why that is (and has always been) the case, rather than complaining about "deception" when the candidate that DID win did more or less what he promised he would do, to the best of his ability.)

[Raster]

23. I disagree. Obama was elected because of the perceived change.

[girl gone mad]

5. FinReg was a disappointment.

A huge opportunity was squandered.

[Raster]

7. And something tells me that is *exactly* what you would say.

[BzaDem]

8. Excellent. n/t

[zipplewrath]

14. It hasn't been written yet

The hard part about criticizing this bill is that it really hasn't been written yet. It was a bill giving alot of regulatory authority, but the regulations haven't been written. Until one sees those, one is criticizing based upon speculation. However, the sad reality is that it was the failure of regulation that brought us this crisis ot begin with, not to mention the BP oil spill disaster. So the fact that people are sceptical that this regulatory bill will be successful isn't surprising.

[BzaDem]

16. I'm not arguing that people shouldn't be skeptical.

I'm arguing with people who think the bill "is truly a joke. Another piece of placebo crap that Obama hopes we're all too stupid to see is pointless."

[zipplewrath]

20. Depends upon ones "trust"

If you don't trust the administration to exercise the regulatory authority, then it is exactly that. If you do still hold out "hope", then it will be another story.

[madrchsod]

19. sure is....

[Locrian]

4. it IS a joke

Wall Street's Big Win
Finance reform won't stop the high-risk gambling that wrecked the economy - and Republicans aren't the only ones to blame


http://www.rollingstone.com/politics/news/17390/188551

It's not that there's nothing good in the bill. In fact, there are many good things in it, even some historic things. Sen. Bernie Sanders and others won a fight to allow Congress to audit the Fed's books for the first time ever. A new Consumer Financial Protection Bureau was created to protect against predatory lending and other abuses. New lending standards will be employed in the mortgage industry; no more meth addicts buying mansions with credit cards. And in perhaps the biggest win of all, there will be new rules forcing some varieties of derivatives – the arcane instruments that Warren Buffett called "financial weapons of mass destruction" – to be traded and cleared on open exchanges, pushing what had been a completely opaque market into the light of day for the first time.

All of this is great, but taken together, these reforms fail to address even a tenth of the real problem. Worse: They fail to even define what the real problem is. Over a long year of feverish lobbying and brutally intense backroom negotiations, a group of D.C. insiders fought over a single question: Just how much of the truth about the financial crisis should we share with the public? Do we admit that control over the economy in the past dec­ade was ceded to a small group of rapacious criminals who to this day are engaged in a mind-­numbing campaign of theft on a global scale? Or do we pretend that, minus a few bumps in the road that have mostly been smoothed out, the clean-hands capitalism of Adam Smith still rules the day in America? In other words, do people need to know the real version, in all its majestic whorebotchery, or can we get away with some bullshit cover story?

In passing Dodd-Frank, they went with the cover story.

[Jkid]

11. And what the Obama administration is doing is delaying the inevitable.

By not going after the root cause of the financial crisis, they may have created another one.

[depakid]

25. I'm not sure how much it's even been delayed

Kinda depends on what the next bubble is- or where the "weapons of mass financial destruction" are aimed.

One in a generation opportunity squandered. Oh well, there's always next time.

[Starry Messenger]

15. "Regulated Capitalism" bwah!

The "crisis" is part of the process. We can bell the cat all we want, but it's still a cat.

[KharmaTrain]

17. The Market Will Always Make Money For The Vested...

Many of these crashes were shaking out the loose change...flushing out the speculators and high flyers...the long term and institutional investors always come out on top when the market dips. Most have not only made the money back they lost when the market tanked in '07-'08, they're making nice profits now along with loses to take off on their taxes (a nice little side benefit of losing some interest).

This article assumes we're out of the current recession/depression...we're not even close. The market hasn't recovered to where it was in '07 and has been moving sideways for the past year. For years I predicted the market would crater...I wrote a college paper on the subject in 1979...then had to wait for nearly 30 years for the real thing to happen. Anyone who makes these kind of predictions are speaking out of their asses. Yes, there are some spotable market trends, but the whole premise of this article is off as this recession continues to bite...money remains tight and with it any chance of recovery limited at best.

[madrchsod]

18. getting advice from the people who....

had a hand in creating the 2015 doomsday scenario....this smells like rotting meat.

[Confusious]

21. Thought we were getting a Roosevelt and got a hoover. nt

[Triana]

22. Dodd - another 'FOA'-just watched 'Capitalism: A Love Story' again last night

....and it brought (again - I saw it in the theater when it came out) into focus why all this is sheer bullshit.

It doesn't matter when the "regulations" kick in - they won't be enough because the Goldman-Sachs Treasury has seen to that. They're NOT going to give up their river of gold.

[L0oniX]

24. Crapitalism. The rich deciding how the rich will continue to be rich.