Why the "Financial Regulations" bill is a failure for consumers.

[woolfe9999]

So if we do anything to regulate businesses, their profits remain the same as they all increase prices.

However, if we deregulate businesses they do whatever they want at the expense of consumers, the environment, local government, etc. The free market becomes useless since every business becomes corrupt and there are no alternatives.

What is the solution?

It's two contradictory arguments both advanced against regulation. One is that regulation doesn't work because whoever is being regulated finds a way around it and is therefore able to preserve their profits (naturally at the expense of the public.) The other is that regulations cost businesses loads of money and hence they destroy jobs and the economy. This contradiction need not be resolved and indeed, it barely merits a response.

I notice that the anti-regulation crowd is trying to break the contradictory logjam by claiming that 1) large banks will find a way around it, but 2) small banks will be harmed. This is a fail on the facts. This law was designed to have minimal impact on smaller financial institutions. Which also makes it difficult for the larger institutions to pass the costs on to their customers, all of whom have the option of switching over to smaller institutions if fee increases are unacceptable.

- wolf

 

[lothar]

If these Regs prevent the repeat of the meltdown we're now recovering from, then they are Good. Pretty much the end of the discussion. Hopefully the Market will take care of these Banks turning around and simply Charging Customers more.

How can one prove this?
I hope you're not planning to use "the stimulus saved millions of jobs" strategy that politicians seem to be using nowadays. A statement not based on any fact.
No difference in Rush Limbaugh saying Bush's post 9/11 terror policies were excellent since there wasn't any domestic terrorist attacks under his watch after 9/11. Again, how does one prove this?

Instead of bailing out banks, we'll now be bailing out derivative clearing houses.
And this bill still doesn't end "too big to fail".

 

[sandorski]

How can one prove this?
I hope you're not planning to use "the stimulus saved millions of jobs" strategy that politicians seem to be using nowadays. A statement not based on any fact.
No difference in Rush Limbaugh saying Bush's post 9/11 terror policies were excellent since there wasn't any domestic terrorist attacks under his watch after 9/11. Again, how does one prove this?

Instead of bailing out banks, we'll now be bailing out derivative clearing houses.
And this bill still doesn't end "too big to fail".

"If"

Time will tell.

 

[piasabird]

So dont put your money in banks.

 

[Fenixgoon]

How can one prove this?
I hope you're not planning to use "the stimulus saved millions of jobs" strategy that politicians seem to be using nowadays. A statement not based on any fact.
No difference in Rush Limbaugh saying Bush's post 9/11 terror policies were excellent since there wasn't any domestic terrorist attacks under his watch after 9/11. Again, how does one prove this?

Instead of bailing out banks, we'll now be bailing out derivative clearing houses.
And this bill still doesn't end "too big to fail".

this rock keeps tigers away....</simpsons>

 

[lothar]

this rock keeps tigers away....</simpsons>

Homer: Not a bear in sight. The Bear Patrol must be working like a charm.
Lisa: That's spacious reasoning, Dad.
Homer: Thank you, dear.
Lisa: By your logic I could claim that this rock keeps tigers away.
Homer: Oh, how does it work?
Lisa: It doesn't work.
Homer: Uh-huh.
Lisa: It's just a stupid rock.
Homer: Uh-huh.
Lisa: But I don't see any tigers around, do you?
Homer: Lisa, I want to buy your rock.

Homer's form of logical reasoning can sometimes be seen on this forum.

 

[werepossum]

It's two contradictory arguments both advanced against regulation. One is that regulation doesn't work because whoever is being regulated finds a way around it and is therefore able to preserve their profits (naturally at the expense of the public.) The other is that regulations cost businesses loads of money and hence they destroy jobs and the economy. This contradiction need not be resolved and indeed, it barely merits a response.

I notice that the anti-regulation crowd is trying to break the contradictory logjam by claiming that 1) large banks will find a way around it, but 2) small banks will be harmed. This is a fail on the facts. This law was designed to have minimal impact on smaller financial institutions. Which also makes it difficult for the larger institutions to pass the costs on to their customers, all of whom have the option of switching over to smaller institutions if fee increases are unacceptable.

- wolf

Everyone who believes this massive bill, crafted behind closed doors by the very people who made absolutely sure that the GSEs were not fixed before the whole system crashed and indeed aren't fixed now, will have minimal effect on small banks yet effectively regulate large banks with huge lobbying budgets, please take one of my brochures on my many excellent bridge investment opportunities . . .

 

[sandorski]

Homer: Not a bear in sight. The Bear Patrol must be working like a charm.
Lisa: That's spacious reasoning, Dad.
Homer: Thank you, dear.
Lisa: By your logic I could claim that this rock keeps tigers away.
Homer: Oh, how does it work?
Lisa: It doesn't work.
Homer: Uh-huh.
Lisa: It's just a stupid rock.
Homer: Uh-huh.
Lisa: But I don't see any tigers around, do you?
Homer: Lisa, I want to buy your rock.

Homer's form of logical reasoning can sometimes be seen on this forum.

Indeed. Just read the OP for proof.

 

[Double Trouble]

Everyone who believes this massive bill, crafted behind closed doors by the very people who made absolutely sure that the GSEs were not fixed before the whole system crashed and indeed aren't fixed now, will have minimal effect on small banks yet effectively regulate large banks with huge lobbying budgets, please take one of my brochures on my many excellent bridge investment opportunities . . .

Agreed. There's no way the big boys in the industry let this thing get through if it would seriously impact them and not the little players.

 

[Double Trouble]

"If"

Time will tell.

No, time won't tell. How would one determine if the future failures - or the lack thereof - are the result of this legislation or not?

 

[sandorski]

No, time won't tell. How would one determine if the future failures - or the lack thereof - are the result of this legislation or not?

By avoiding the repeat of the situation we just had.

 

[DucatiMonster696]

Didn't we already have this discussion before in the past about how such regulation would just backfire on people (the stupid ones that do not know how to visit their own bank's atm and instead cry fowl) and cause banks to find other creative ways to make up for the lack of revenue across the board on all customers when ATM fees are capped?

 

[Double Trouble]

By avoiding the repeat of the situation we just had.

Or, maybe it's the result of the special anti-crisis flowers I planted in my garden. Or maybe, it's a result of global warming! Correlation =/= causation.

It's the same silly argument some of the Bushies have made about invasion of Iraq and Afghanistan: "look, we haven't had a big attack since. Taking the battle to them worked!".

 

[lothar]

Indeed. Just read the OP for proof.

The OP contains factual proof of why it's a failure for US consumers with 3-4 articles cited as evidence.

In your case, you're essentially stating "The absence of evidence is the evidence of absence".
A statement not based on any fact.

 

[sandorski]

The OP contains factual proof of why it's a failure for US consumers with 3-4 articles cited as evidence.

In your case, you're essentially stating "The absence of evidence is the evidence of absence".
A statement not based on any fact.

Negative. The OP shows what some Banks have decided to do. Not what the Bill did.

 

[sandorski]

Or, maybe it's the result of the special anti-crisis flowers I planted in my garden. Or maybe, it's a result of global warming! Correlation =/= causation.

It's the same silly argument some of the Bushies have made about invasion of Iraq and Afghanistan: "look, we haven't had a big attack since. Taking the battle to them worked!".

Fail. It is quite clear what brought about this mess. That is what needs to be prevented. Rage onward to Fail though.

 

[lothar]

Negative. The OP shows what some Banks have decided to do. Not what the Bill did.

The OP shows what the bill caused.

 

[sandorski]

The OP shows what the bill caused.

Negative.

 

[jackace]

Which is approx the same voice as you have as a consumer with corporations.

So now what?

If you never purchase anything from the corporation then a better analogy IMO would be you chose not to vote, they are going to do what they are going to do with or without your individual say in the matter. The only way I would consider it a vote against a corporation is if you bought a VERY similar service/item from a direct competitor. Another problem with the corporations (especially in the financial markets) is they can sell your business to another company or subcontract with a company you don't approve of, without even notifying you.

At least with voting you always have a say in things that affect you no matter how small that voice.

 

[rudder]

End Is Seen to Free Checking

QFT. I really like my bank... but I have kept my old account active at a credit union which has always had free checking aside from having to buy my checks.

 

[joebloggs10]

Well, if you want to see how the bill is failing already, go to wsj.com and read the article about the new bond rating regulation. (I didn't link it b/c wsj.com is a subscription site) Basically, in an effort to stop Moody's, Fitch, et al from fraudulently rating bond offerings they've imposed direct liability on them if the offering does not live up to it's rating. But, now the rating agencies have the option of preventing their ratings from being used in a bond issue. Laws require that public issues have a rating. Basically the entire new-issue corporate bond market has shut down b/c rating agencies refuse to allow their ratings to be used. I mean, what if AM Best had legitimately rated a BP bond as A before the Deepwater Horizon spill and was on the hook for then tire bond offering amount not due to a credit issue but for an operational one? That's why there were 3 billion dollars of new corporate bond issues last week and zero this week.

 

[BoberFett]

If you never purchase anything from the corporation then a better analogy IMO would be you chose not to vote, they are going to do what they are going to do with or without your individual say in the matter. The only way I would consider it a vote against a corporation is if you bought a VERY similar service/item from a direct competitor. Another problem with the corporations (especially in the financial markets) is they can sell your business to another company or subcontract with a company you don't approve of, without even notifying you.

At least with voting you always have a say in things that affect you no matter how small that voice.

The free market is far more democratic than government. This cannot be denied. You acting alone can't elect a candidate any more than you acting alone can shut down a corporation. If you want to motivate a corporation, campaign against them actively.

On the government side, you get to vote once every couple years. After the candidate you voted for is in office. They then proceed to do things in direct opposition to what they campaigned on. Do you really want to continue the lie that you believe you truly have a say in anything?

 

[BoberFett]

Well, if you want to see how the bill is failing already, go to wsj.com and read the article about the new bond rating regulation. (I didn't link it b/c wsj.com is a subscription site) Basically, in an effort to stop Moody's, Fitch, et al from fraudulently rating bond offerings they've imposed direct liability on them if the offering does not live up to it's rating. But, now the rating agencies have the option of preventing their ratings from being used in a bond issue. Laws require that public issues have a rating. Basically the entire new-issue corporate bond market has shut down b/c rating agencies refuse to allow their ratings to be used. I mean, what if AM Best had legitimately rated a BP bond as A before the Deepwater Horizon spill and was on the hook for then tire bond offering amount not due to a credit issue but for an operational one? That's why there were 3 billion dollars of new corporate bond issues last week and zero this week.

Haven't read the article, but assuming what you've said here is factual...



HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!

Politicians are clueless.

 

[StageLeft]

I suppose that BoA one makes sense. The account I've had for the past 3.5 years I've visited the branch every 6 months or so, in all cases either getting foreign currency or doing a wire transfer or something. There's just no reason to go into a bank when it's all digital.

The financial industry owns Washington Law makers and has them by the balls. Law makers want to appear tough on the financial industry reform, (for re-election reasons) but they will leave plenty of loop-holes for the industry to continue with business as usual.

This is a fact.

Its a ridiculously argument in MHO to say, if we take away one ability of the banks to gouge the consumer, the banks will simply gouge us in another area.

They do seem to find ways to do it, though.

 

[jackace]

The free market is far more democratic than government. This cannot be denied. You acting alone can't elect a candidate any more than you acting alone can shut down a corporation. If you want to motivate a corporation, campaign against them actively.

On the government side, you get to vote once every couple years. After the candidate you voted for is in office. They then proceed to do things in direct opposition to what they campaigned on. Do you really want to continue the lie that you believe you truly have a say in anything?

It won't be any different with corporations. They will say one thing, but do another. Or worse, do one thing under one name, but do another under another name. Making you think they are actually for your best interest, but in reality are working against it.

Not to mention once they have the government officials bought out and controlled they can control the laws and regulations. A good example is this financial reform which at the beginning had good changes, but after all the lobbying by the financial industry it isn't really going to change anything.