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Posts Tagged ‘Wall Street lobby’

Fed Governor Fisher: “Break Up TBTF Banks”

Posted by Larry Doyle on January 17th, 2013 11:54 AM |

Three days ago I wrote how strongly I believe that the Wall Street landscape needs to be restructured. How so? I made my case in defining Wall Street as an oligopoly and Why Should the Banks Be Broken Up?

I concluded my commentary by highlighting that Dallas Federal Reserve governor Richard Fisher would be addressing this same topic on Wednesday evening. What did the good governor have to say?  (more…)

Would You Buy a Used Car From Lloyd Blankfein?

Posted by Larry Doyle on January 8th, 2013 8:41 AM |

America awakes this morning with another 20 billion reasons not to trust those running our major financial institutions, our regulatory agencies, or those in Congress ultimately charged with overseeing them.

Wall Street’s merely paying of fines for activities (mortgage fraud) that by any measure would be defined as part and parcel of racketeering only serves to further erode what little trust the American public might still hold in these aforementioned entities.

Trust….what price does trust trade at? What value does it hold? Would you know it if you ‘saw’ it? (more…)

Erik Sirri and the Costs of a Politicized SEC

Posted by Larry Doyle on March 31st, 2010 6:27 AM |

When the exchange of financial ideas and, more importantly, capital becomes excessively politicized there are very real costs. Although those involved in the politicization process of these markets and exchanges may define the increased intervention of political influences as “in the best interests” of all involved, the supposed near term benefits come with long term costs.

Why do I broach this topic? A former SEC official decided he wanted to talk about the political overtones involved in the SEC’s decision to restrict short-selling in the equity markets in 2008. Bloomberg reports on this bombshell in writing, SEC Lets Politics Spur Short-Sale Decision, Sirri Says:

The U.S. Securities and Exchange Commission’s decision to restrict short selling was a political decision rather than one based on evidence, according to a former agency official who says it may set a precedent for future decisions. (more…)

Senator Richard Durbin (D-IL): “Frankly, the Banks Own Congress” and You’re Getting Screwed Again

Posted by Larry Doyle on March 24th, 2010 12:22 PM |

I wrote extensively in 2009 as to How Wall Street Bought Washington. Well, it would appear that the purchase and sales agreement between these two entities remains in place.

A recent press release highlights developments on Senator Chris Dodd’s proposed Financial Regulatory Reform along with a recent assessment by Washington insider and Illinois Senator Richard Durbin.

DEMOCRATIC FINANCIAL REFORM BILL EXITED SENATE BANKING COMMITTEE WITHOUT RESTORING KEY INVESTOR LEGAL RIGHT TO HOLD KNOWING AIDERS AND ABETTORS OF FRAUD ACCOUNTABLE (more…)

The BIG Hole in Financial Regulatory Reform

Posted by Larry Doyle on March 22nd, 2010 4:24 PM |

Why am I so skeptical that Senator Chris Dodd’s proposed Financial Regulatory Reform (for overachievers in the audience, the link connects to the 89-page proposal) will truly change behaviors on Wall Street? For the very simple reason that I have seen no highlighting of the Financial Industry Regulatory Authority within the proposed Financial Regulatory Reform. Strike you as a little odd? It strikes me that the Wall Street lobby is hard at work keeping its self-regulator, that being FINRA, right where they want it.

Against this backdrop, I was pleasantly surprised to see highly regarded Barron’s columnist Jim McTague reference that the proposed reform would promote transparency and accountability of FINRA. (more…)

Wall Street’s Oligopoly Flexes Its Muscle

Posted by Larry Doyle on March 15th, 2010 12:51 PM |

Pricing power is everything.

What businessman wouldn’t like greater control and influence over the pricing of his goods and services? How are prices determined? In a capitalist system, prices are a function of the competitive forces of supply and demand. What happens when competition dwindles? Pricing power for the suppliers increases. How does competition dwindle? When barriers to entry are so high, or competitors go out of business. This economic reality is also known as an oligopoly and it defines the current state of our financial industry known as Wall Street.

Is Wall Street taking advantage of the lessened competition and flexing its muscle to drive revenue? Is the Pope Catholic? (more…)

Consumer Financial Protection or Wall Street Beats Main Street?

Posted by Larry Doyle on March 3rd, 2010 9:49 AM |

News that a newly proposed Consumer Financial Protection Agency will be housed within the Federal Reserve is another shot across the bow in terms of Wall Street owning Washington and beating Main Street.

Am I surprised by these results? Not at all. The power of the Wall Street lobby is enormous and ultimately the crowd in Washington needs the money from Wall Street in order to pretend they represent the interests of Main Street. All the press conferences and politicking on the topic of consumer financial protection truly amount to nothing more than pure bluster. The bottom line of Wall Street banks feeds the bottom line of many politicians in Washington on both sides of the aisle. (more…)

Wall Street Compensation Reform in Name Only

Posted by Larry Doyle on October 6th, 2009 9:27 AM |

Say what you want about movie producer Michael Moore, but he is no fool in tapping into the American spirit. Moore takes on Wall Street in highlighting the enormous bank bailouts emanating from this economic crisis. While there are many factors that drove our banking industry and our economy to its knees, ultimately the Wall Street compensation system allowed those taking risk to ‘swing for the fences’ while playing ‘heads we win, tails you lose.’ Washington is going to fix this, right? Having appointed a pay czar in Ken Feinberg, the Obama administration is going to address the crux of this critical issue and reform it, right? I mean, The Wall Street Journal this very morning profiles how Pay Czar Targets Salary Cuts:

The Obama administration’s pay czar is planning to clamp down on compensation at firms receiving large sums of government aid by cutting annual cash salaries for many of the top employees under his authority, according to people familiar with the matter.

Instead of awarding large cash salaries, Kenneth Feinberg is planning to shift a chunk of an employee’s annual salary into stock that cannot be accessed for several years, these people said. Such a move, the most intrusive yet into corporate compensation, would mark the government’s first effort to curb the take-home pay of everyone from auto executives to financial traders.

Folks, with all due respect to Ken Feinberg, these efforts to implement reform in Wall Street compensation practices are largely a joke. Why? While the subtitle of the WSJ’s article includes the term ‘compensation,’ Feinberg’s focus is limited to the term in the title, that being ‘salary.’ (more…)

The Fault Lies Not in Our Stars but in Ourselves

Posted by Larry Doyle on June 18th, 2009 11:24 AM |

Just as Cassius could not serve both Caesar and the republic, neither can our political leaders today serve two masters. Who are these masters? On the one hand, politicians claim to serve the public interest, while on the other the politicians are beholden to the big money showered upon them by lobbyists representing large financial interests.

Unless and until these conflicts are exposed and extirpated, in my humble opinion, our nation will never regain its stature. The evidence is overwhelming. The gall of the politicians is unending. The media is largely beholden to the same interests and enables the charade to continue.

The Wall Street Journal touches upon these issues in writing Hope vs. Financial Experience:

The main idea behind the Obama Administration’s new financial revamp is essentially this: With more power and a modest reshuffling of the bureaucratic furniture, the same regulators who missed the last credit mania will somehow prevent the next one. If nothing else, this concept is certainly true to President Obama’s campaign theme of “hope.”

From my experience, “hope” is always a lousy hedge. What do I mean? If I, in whatever role I occupy, am relying upon hope rather than thorough preparation, discipline, and ethics to achieve my desired goals, then I am in an unenviable position. As a nation, we occupy that unenviable position currently. Why?

We “hope” the financial system and reforms will serve our national interests. However, those charged with developing and implementing these reforms are conflicted. How so? They feed from the trough of those supposedly being regulated while supposedly representing the interests of the public, i.e. those they are supposed to be serving. No man can serve two masters.

President Obama and his Congressional colleagues from both sides of the aisle would promote the concept that our financial regulatory system had gaps which banks profitably penetrated. The promotion of that concept is pure pandering. Those gaps were created and paid for by the massive flow of lobbying dollars that went from Wall Street to Washington. In turn, the politicians hoped the gaps would not be detected or overly expensive. They “hoped” and we as a nation lost. Where is the acccountability?

Many would say there is much blame to go around for this financial crisis. However, if we do not call those in Washington on the carpet for their culpability in this turmoil, we are doomed to repeat it.

As I watch the Congressional testimony of Secretary Geithner this morning, my blood boils. Seeing the likes of Senators Chris Dodd, Chuck Schumer, and many others pretending to represent the national interest is very hard to swallow. Why?

All we need to do is review the names of those who facilitated the financial fraud that occurred at Freddie Mac and Fannie Mae. President Obama himself, in his short stint in the U.S. Senate, was a huge beneficiary of the largesse from Freddie and Fannie and the financial industry at large. Make no mistake, the intentional “cooking of the books” at both those agencies was fraudulent and criminal behavior. Washington enabled it and profited from it.

The WSJ addresses this very point in the process of reviewing Obama’s proposed regulatory reforms:

This “gaps and weaknesses” theory has the political benefit of ignoring the role that Washington played in creating the credit bubble. There’s not a word in the 85 pages about the Fed’s years of negative real interest rates, and the only mention of Fannie Mae and Freddie Mac is a placeholder paragraph noting that reform of those housing giants will come later. Also nowhere in sight is any explanation for how the Fed, which had every power imaginable to regulate Citigroup, could have allowed Citi to sell tens of billions of dollars of off-balance-sheet mortgage products.

Thus, the debate in Washington will continue. I view that act as a mere sideshow to the main play going on behind the curtain. That “show” burdens the taxpayer, both now and in the future, with an enormous and unknown cost!!

LD






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