House votes to ease bank regulations

[Sonikku]

https://www.cbsnews.com/news/house-approves-bill-rolling-back-banking-rules/

It now goes to Trump's desk, where he will sign it.

Anyone else beginning to feel a noose slowly tightening around all our necks?

 

[Thebobo]

Its just a barrage of bullshit. I've been through many republican "takeovers" but this one is magnatudes beyond anything. Someone or something is going to snap I fear. In desperation I've taken up voodoo recently.

 

[dank69]

Thank God. I've been losing sleep worrying about all those unnecessary regulations that bankers have had to deal with.

 

[Thebobo]

Thank God. I've been losing sleep worrying about all those unnecessary regulations that bankers have had to deal with.

I know another win for the small man! Thanks Trump!

 

[soulcougher73]

What could possibly go wrong that hasn’t before...who woulda thunk it

 

[Fanatical Meat]

What could possibly go wrong that hasn’t before...who woulda thunk it

Beat me too it

 

[ch33zw1z]

Everyone still have their 401ks heavily allocated to stocks? Lulz.

 

[Incorruptible]

There are far too many regulations and they need to be cut, many of these regulations are an attack on private business.

 

[Jhhnn]

Everyone still have their 401ks heavily allocated to stocks? Lulz.

What we need is a nice big credit bubble where market insiders take a cut off the top on the way up, sell short on the way down & buy at distressed prices when it all bottoms out. If you think your 401k can move fast enough to keep up, you're delusional. Whose money do you think the lootocracy is after, anyway?

 

[ch33zw1z]

What we need is a nice big credit bubble where market insiders take a cut off the top on the way up, sell short on the way down & buy at distressed prices when it all bottoms out. If you think your 401k can move fast enough to keep up, you're delusional. Whose money do you think the lootocracy is after, anyway?

It cannot, that's the awkward joke. The plebes and their 401ks will get the screw again, especially so if you park it in majority stock allocation

I still work with guys who cant permanently retire after losing almost 70% of their 401k's in the housing collapse.

 

[FelixDeCat]

Come on now, you know you like the Banks playing fast and lose with your deposit money. Making loans with just stated income ("no doc") ARM loans is good for the economy!! You can package them into bonds and loan "investors" money (up to 20x1 or 30x1 leverage) on those liar loans.

It worked before like this pre-2008:

You purchase $1,000,000 of CMO mortgage bonds earning 5% on no-doc ARM loans on subprime credit. Then you put up those bonds as collateral to purchase $19,000,000 lower risk fixed rate mortgage bonds, selling off the risk to suckers who want yield. Now you are getting interest on $20,000,000 in bonds with just $1,000,000 in collateral!! The is how Bear Stearns and Lehman Brothers made mega profits.....until people stop paying on those mortgages and even AAA bonds went south causing massive margin calls ....and both companies went belly up.

Then FNMA and FHLMC both went into technical bankruptcy, along with AIG for BUYING RISK on those levered bonds. They were collectively facing TRILLIONS in losses, requiring the government to effectively nationalize them. Eventually all large banks were required to have partial government ownership to provide stability and oversight of management.

Dont worry though - they will get it right this time - and if not we can bail them all out again.

 

[Sheik Yerbouti]

THANK GOD!! Finally someone thinking of those poor, long suffering banks. Now they can bilk us again and again and again.

 

[FelixDeCat]

Repealing these regulations is a VERY bad idea. CEOs are under constant pressure to make more money for shareholders. What I said above will happen again.

Also, when Trump signs this, the CFPB is essentially without power.

 

[Jhhnn]

Come on now, you know you like the Banks playing fast and lose with your deposit money. Making loans with just stated income ("no doc") ARM loans is good for the economy!! You can package them into bonds and loan "investors" money (up to 20x1 or 30x1 leverage) on those liar loans.

It worked before like this pre-2008:

You purchase $1,000,000 of CMO mortgage bonds earning 5% on no-doc ARM loans on subprime credit. Then you put up those bonds as collateral to purchase $19,000,000 lower risk fixed rate mortgage bonds, selling off the risk to suckers who want yield. Now you are getting interest on $20,000,000 in bonds with just $1,000,000 in collateral!! The is how Bear Stearns and Lehman Brothers made mega profits.....until people stop paying on those mortgages and even AAA bonds went south causing massive margin calls ....and both companies went belly up.

Then FNMA and FHLMC both went into technical bankruptcy, along with AIG for BUYING RISK on those levered bonds. They were collectively facing TRILLIONS in losses, requiring the government to effectively nationalize them. Eventually all large banks were required to have partial government ownership to provide stability and oversight of management.

Dont worry though - they will get it right this time - and if not we can bail them all out again.

Somebody stole your account, right?

 

[blackangst1]

See my sig

 

[FelixDeCat]

Somebody stole your account, right?

No, Ive been in the mortgage and banking industry since 1991, except 2008-2011. Ive seen the good times and the bad times. What happened before 2008 was something that should never be repeated. In the good old days every one was straight laced and "conservative" with lending. But it wasnt "glamorous" and nobody was getting rich - mega rich - off it, much less the shareholders.

First came government demands to loosen lending to "make homes affordable". So banks had spread the risk of making those loans. Thankfully FNMA and FHLMC were ready buyers of a lot of that garbage and they repackaged those bonds for sale to suckers around the world - pension funds, etc. Then Goldman Sachs got in the game with the famous "no-doc" loans.

First the "investment" banks and hedge funds got into 30x1 borrowing on those high yield bonds. They thought they were taking a calculated risk by selling parts of those bets to idiots like AIG.

NOBODY THOUGHT the ***ENTIRE*** housing bond market would collapse at once. It was thought IMPOSSIBLE. But it did and took the entire stock market with it, causing a 55% loss in the DOW from its 2007 high. That would be like a fall from 26,600 to 11,970 today over a 17 month period, and lots of people sold at the bottom.

https://en.wikipedia.org/wiki/United_States_bear_market_of_2007–09

Now the shareholders prodded banks to start making levered mortgage bets to jack up profits. Those that kept the bets small survived this crash, notably JP Morgan Chase. They had the cash and backing from the Federal Reserve to buy Bear Stearns and Washington Mutual for nothing or next too it. Wells Fargo bought Wachovia. The FDIC orchestrated both buys.

People lost billions in investments and retirement savings in all the banks and companies whose stocks went to ZERO.

https://www.fdic.gov/bank/historical/bank/

2007 - 3 bank failures
2008 - 25 bank failures
2009 - 140 bank failures
2010 - 157 bank failures
2011 - 92 bank failures

This is a bad idea.

 

[zerocool84]

There are far too many regulations and they need to be cut, many of these regulations are an attack on private business.

So just a blanket response, literally nothing specific to this. Who cares about repeating what happened in 2008 right?

 

[Sheik Yerbouti]

There are far too many regulations and they need to be cut, many of these regulations are an attack on private business.

what a fucking idiotic puppet you are.

 

[dank69]

No, Ive been in the mortgage and banking industry since 1991, except 2008-2011. Ive seen the good times and the bad times. What happened before 2008 was something that should never be repeated. In the good old days every one was straight laced and "conservative" with lending. But it wasnt "glamorous" and nobody was getting rich - mega rich - off it, much less the shareholders.

First came government demands to loosen lending to "make homes affordable". So banks had spread the risk of making those loans. Thankfully FNMA and FHLMC were ready buyers of a lot of that garbage and they repackaged those bonds for sale to suckers around the world - pension funds, etc. Then Goldman Sachs got in the game with the famous "no-doc" loans.

First the "investment" banks and hedge funds got into 30x1 borrowing on those high yield bonds. They thought they were taking a calculated risk by selling parts of those bets to idiots like AIG.

NOBODY THOUGHT the ***ENTIRE*** housing bond market would collapse at once. It was thought IMPOSSIBLE. But it did and took the entire stock market with it, causing a 55% loss in the DOW from its 2007 high. That would be like a fall from 26,600 to 11,970 today over a 17 month period, and lots of people sold at the bottom.

https://en.wikipedia.org/wiki/United_States_bear_market_of_2007–09

Now the shareholders prodded banks to start making levered mortgage bets to jack up profits. Those that kept the bets small survived this crash, notably JP Morgan Chase. They had the cash and backing from the Federal Reserve to buy Bear Stearns and Washington Mutual for nothing or next too it. Wells Fargo bought Wachovia. The FDIC orchestrated both buys.

People lost billions in investments and retirement savings in all the banks and companies whose stocks went to ZERO.

https://www.fdic.gov/bank/historical/bank/

2007 - 3 bank failures
2008 - 25 bank failures
2009 - 140 bank failures
2010 - 157 bank failures
2011 - 92 bank failures

This is a bad idea.

You're focusing on irrelevant nonsense. The important thing is Hillary's emails.

 

[Darwin333]

There are far too many regulations and they need to be cut, many of these regulations are an attack on private business.

Like those that are meant to stop those private businesses that are "too big to fail" from tanking the entire US economy again? Shrug, I'm game. Lets just lock up the assholes when they commit crimes instead of fining them, usually far less than they profited making it a cost of doing business, and break up any business deemed "too big to fail" into smaller companies that can fail without catastrophic consequences to the US economy. Then, sure, we can talk about getting rid of some of their regulations.

Otherwise it is just a recipe for them to play fast and loose again and if they fuck up the taxpayers will be the ones on the hook, again. Hell the banksters were about the only ones to really gain, and gain big, from the Great Recession.

 

[blackangst1]

You're focusing on irrelevant nonsense. The important thing is Hillary's emails.

Yep. Just ask Mark Penn.

 

[trenchfoot]

You're focusing on irrelevant nonsense. The important thing is Hillary's emails.

And voting Republican no matter what the consequences are. Better to lose the house and the 401K than having tighter controls on guns and letting the scary Muslims share in the freedoms we all enjoy.

 

[HomerJS]

There are far too many regulations and they need to be cut, many of these regulations are an attack on private business.

Those same businesses that fucked over the entire country? I guess just let them do what they want again.

 

[Exterous]

Everytime this bill moves forward we get the same thread here without a lot of understanding its implications. Doesn't help that the article cited is extremely light on details and only focuses on a single attention grabbing change - which doesn't even affect the 'Too Big to Fail' banks. The large ones like Citi, JP Morgan, and Wells Fargo are not affected. The biggest bank failure WaMu would still have been covered by the higher limits. All the rest were under $31Bn so they wouldn't have been caught by the lower $50bn limit. Even former Rep. Frank agrees that his namesake bill set the bar too low at $50bn

He also agrees with Bernake, Geitner, Summers and others who are much more familiar with the cause and effect than anyone here that the regulations were far too onerous on small banks:

Frank said he supports the provision in the bill to exempt banks with less than $10 billion in assets from a rule that bars banks from making some kinds of risky, speculative investments. He says the small banks weren't really doing much of that anyway, but they ended up having to spend too much time and money proving they were in compliance.

If you don't want giant too big to fail banks you should be in favor of this bill since ithe original provisions encouraged banking consolidation, leading to a riskier environment of fewer, larger banks:
http://knowledge.wharton.upenn.edu/article/banking-industry-acquisitions/

This is to the detriment of rural banking:
https://www.hks.harvard.edu/centers/mrcbg/publications/awp/awp37

 

[Exterous]

Its just a barrage of bullshit. I've been through many republican "takeovers" but this one is magnatudes beyond anything. Someone or something is going to snap I fear. In desperation I've taken up voodoo recently.

17 of the 49 Senate Democrats voted for this

Now the shareholders prodded banks to start making levered mortgage bets to jack up profits. Those that kept the bets small survived this crash, notably JP Morgan Chase. They had the cash and backing from the Federal Reserve to buy Bear Stearns and Washington Mutual for nothing or next too it. Wells Fargo bought Wachovia. The FDIC orchestrated both buys.

No -the Fed orchestrated the buys. The FDIC was extremely reticent and nearly torpedoed a couple of deals. IIRC they refused to back a WaMu buyout