PoliticsUSA: Banks: House of Representatives passes bill regulating banks and finance, Senate mum

MarketWatch's Ronald D. Orol sends out this Market Pulse alert, "House approves sweeping bank reform bill" (June 30, 2k10, 6:54 p.m. EDT):

After making changes to appease moderate Republicans in the Senate, the House on Wednesday approved the most significant shake-up of the regulation of U.S. banks since the Great Depression by placing new restrictions on the nation's biggest banks, reining in the Federal Reserve and crafting a major new consumer-protection division for mortgage and credit-card products. The mammoth legislative package -- which passed 237 to 192 - moves the Obama administration one step closer to having a significant triumph in its efforts to reign in Wall Street after a financial crisis that shook the economy to the brink in Sept. 2008. The legislation, which is a combination of House and Senate bank bills, must still receive a filibuster-proof 60 votes to pass in the Senate. A Senate vote isn't expected until the week of July 12. The bill had almost no GOP backers.

Americans need some reform of lax regulation immediately, so let's hope that the Senate confirms, as this House version simply ratifies the negotiation results of a joint committee of the two Houses of Congress.  The Senate now needs to adopt the same text approved by its delegates on the joint committee, after approval by the Senate the bill becomes ready for the Prez's signature.

Senate support for the far-reaching bill remained in flux, however. The Senate was forced to delay its vote to mid-July, denying President Barack Obama a victory before Independence Day. Democrats struggled to secure the votes of a handful of Republican senators even after meeting their demands and backing down on a $19 billion tax on big banks and hedge funds.   Read more ...

EconomyUSA: Investors: Market Watch portrays May's volatility in this apt pix

Do you carry a left-goudzwaardian hate for capitalists, particularly investors?

Then, I give you occasion to rejoice and be exceeding glad as you feast your eyes on this one. But maybe you can glimpse the real pain in the face on this excellent bit of webcomic satire.  You see, the volatility of the markets last month created an enormous amount of anxiety and worse, as investors last month -- the good, the bad and the ugly among them -- tempted to cope with their shortfalls.  Of course, some clever lads made a killing, by luck or purposeful exploitation knowing when and where to reap stunning profits off the misery of others -- and the others not being only investors, small investors particularly, but also the noninvestors in the workforce and out of it, impacted severely by an unstable world and domestic market.

The month of June 2k10 will find rW attempting to monitor the general pattern of the markets (via MarketWatch and other financial newshorses), monitoring as well as the proposed American legislation to reform and better regulate the American domestic financial industry.  We're not laissez-faire, neither are we anticapitalist as some goudzwaardian reformational folk seem to be.  We're rather centre-goudzwaardian ourselves, but know that the stock markets are integral to the advanced differentiated society we live in, and that sphere sovereignty is conceptually and practically (as a life-practice) prior to the capitalist vs socialist debate so prominent in some corners today.  Let's get out of the corners!

A reformational investors club, anyone?

A Christian labor/labour union, anyone?

A round of beers at the local pub, anyone?, to discuss these pressing concerns that plague us and have us looking over our shoulders to see if the sky is falling.  Don't jump at the start of the next crisis or when your bank fails.  Remember the Federal Deposit Insurance Corporation is there as a safety net (thank God for regulation in that respect at least?).  Yes, we need strong reform and wise regulation of our financial institutions, because everyone, not just investors, are hurt in the purse and wallet when malfeasance spreads in societal spheres mentioned, hurt as well as our bank accounts, when the volatility heats up.  Somebody is making a killing, and somebody is getting killed.

Oh by the way, aside from the semiotics of the cartoon pix, the webcomic satire, the analytics of the situation also appear on MarketWatch today in a synthesis regarding developments by Steve Goldstein, "US stock futures jump on China, Europe, BP jitters" (June1,2k10).

-- EconoMix

Full disclosure:  I own no stocks in any company, my pension is small, and I am to be (ac)counted among the poorer of the sisters and brothers reformational in the h+ly industrialized West.  Not poor from the standpoint of reformationals in Africa and Latin America, for instance.

EconomicsUSA: Financial Regulation: New draft law passes Senate

MarketWatch reports (May21,2k10):

"Senate OKs sweeping restrMaictions on big banks by Ronald D. Orol

WASHINGTON - Senate lawmakers on Friday approved the most significant increase in the regulation of U.S. banks since the Great Depression, placing new restrictions on the nation's biggest banks, reining in the Federal Reserve and crafting a major new consumer protection division for mortgage and credit-card products. The mammoth legislative package -- which passed 59 to 39 -- requires "too-big-to-fail" banks to install new capital restrictions and divest their derivatives units, sets up a government board to assign credit raters for banks' structured finance securities and instructs the government to conduct a one-time unprecedented audit of the Federal Reserve's emergency response programs

134 comments accompany the brief item just recently published.

The source here doesn't mention how the new law doesn't cover the financial malfeasance of Fannie Mae and Freddie Mac, the housing overlords which enriched its bosses so grandly even tho these two corporations are quasi-govt operations, pushed bad business loands and mortgages on woud-be homeowners without a dream of paying their monthly charges, setting the scene for the later foreclosures that put people out on the street all over America. Bad loans / mortgages and insolvancies backed up by the Fed govt, at taxpayers expense, were the origin of the scams that the banks bawt-into and were the main / key cause of the financial crisis from which the Bush-Paulsen and Obama-Geithner excheqeries sawt to save us thru the TARP bailouts. This skyrocketed the national USA debt from which the chickens are coming home to roost.

A very positive provision of the new legislation is the enforced splitting off of derivatives money-games from banking proper. This move is in keeping with the Kuyperian-Dooyeweerdian principle of sphere sovereignty in the subsectoring of finance enterprise-types and the regulation of different institutions / enterprises in the industrial sector of banking and finance, differently.

Sen. Blanche Lincoln (D-Ark.), chairman of the Senate agriculture committee, proposed dramatic restrictions on trading in derivatives, including a provision that could force big banks to spin off the lucrative business altogether. Her language was added to Dodd's bill and endured, despite efforts by the administration, lobbyists and Dodd himself to temper it.

Hooray! for Blanch! This puts the kiebosh on claims that she is simply an Establishment Democrat. Rather, she is an American treasure for standing up to the Establshment Obamonomix that flaw the new Senate-proposed law (it has to be reconciled with the House version, and then sent up to the White House for the imperial signature.

Two other flaws occur in the Senate's version (and probably are already present in that of the House, as well). First, the bureaucracy was "grown" (groan!) by bloating a present function that has not been properly been addressed by the presently (already) mandated agency, which has indeed broken the law in this failure. -- Regarding consumer protection! Now the overhead expenses of setting up a new agency and the provision of new hires to staff, the costs of this boondoggel will have to be borne by USA taxpayers, sometime down the road short of a grand collapse, but in the meantime of course the Obamanoiods in the Senate and House will just tack the costs onto the Federal deficit. Not preventing a collapse but delaying it.

In the House version, Barney Frank speculates on what will go on in the conference -- not truly a "reconciliation" (which can only reconcile different amounts of money to be allocated) by a joint committee of delegates of the two chambers, msndated to reach compromises to bring forward a single draft text to be voted up by both the Senate and House.

Frank said he expects to abandon a House provision that would require the financial industry to pay into a fund that could be used to liquidate failing firms, an issue that became a political lightning rod in the Senate. And he said he expects the Senate to back off its proposal to house an independent consumer protection agency within the Federal Reserve.

Until, we shall have to wait for much dust to settle.
-- EconoMix