Obama Signs Financial Regulation Reform Bill
President Obama engaged in some old-fashioned bank bashing as he signed the historic financial-reform bill that he guaranteed will forever end Wall Street bailouts.
Wall Street slips post Ben Bernanke's comments
Troubled Galaxy Destroyed Dreams, chapter 526
Palash Biswas
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Obama Signs Financial Regulation Reform Bill
President Obama engaged in some old-fashioned bank bashing as he signed the historic financial-reform bill that he guaranteed will forever end Wall Street bailouts.Whereas in absence of any bloody Sub Prime Crisis Indian Brahmin Policy Makers led by Chidambaram, PRANAB, Montek and Manmohan created a Hyped False Recession to bail out the Killer Money Machine and Pushed for Economic Ethnic Cleansing. Obama opted for Nationalisation while Indian Superslaves chose Foreign capital Inflow and FDI Raj for so called Inclusive Growth with Massive Disinvestment and destruction of the Production system, annihilating Aboriginal Indigenous Humanscape!
The president's sometimes cutting remarks left bankers fuming and some predicting he may end up regretting his no-new-bailouts promise.
US President Barack Obama warned Thursday that America could not keep spending as though deficits did not matter, as he signed a new law cutting waste and fraud and targeted 50 billion dollars in savings.The Obama administration is spelling out new rights for consumers to appeal to a neutral referee if their health insurance company denies a claim. President Barack Obama on Thursday signed legislation intended to slash by $50 billion the taxpayer money improperly paid to dead people, fugitives and those in jail who shouldn't be getting benefits.
But that goal, if achieved, would not even halve the $110 billion made in such payments last year.
Hedge fund registration and limits on banks' participation in the alternative investments industry are both now the law of the land. President Barack Obama yesterday signed the most sweeping U.S. financial regulation reform since the Great Depression.
"I proposed a set of reforms to empower consumers and investors, to bring the shadowy deals that caused this crisis into the light of day, and to put a stop to taxpayer bailouts once and for all," Obama said at the bill-signing ceremony, held at the Ronald Reagan Building in Washington, D.C.
"Because of this law, the American people will never again be asked to foot the bill for Wall Street's mistakes," the president added.
The alternative investments provisions are a very small part of the 2,300-page law, which creates a new consumer financial protection agency and gives regulators the authority to wind-down institutions that present a systemic risk to the economy. But what provisions there are will certainly have an effect on the way hedge funds and private equity firms do business.
For one, both hedge funds and p.e. firms—those with more than $150 million in assets, anyway—will have to register with the Securities and Exchange Commission. They'll also have to disclose more information to the regulator and will be subject to SEC audits.
The bill also includes a watered-down version of the Volcker rule, strictly limiting to 3% the amount of its capital a bank can invest in hedge funds and private equity funds.
Still unclear is if or how the new financial super-regulator—the Financial Stability Oversight Council, which includes representatives of the SEC, Federal Reserve and Treasury Dept.—will affect hedge funds or private equity firms. That body has been given authority over firms deemed systemically relevant, but it is not clear whether any hedge funds would fall under that definition.
The new law will strengthen the efforts by federal agencies to halt the flow of improper money in a series of ways. Among those steps: requiring more audits of programs and adding penalties for agencies that don't comply with the law. The legislation also broadens how any recovered money can be used.
Obama chose to sign the bill in front of cameras in the White House's State Dining Room in hopes of bringing attention to the new law. He announced a goal of reducing improper payments by $50 billion by 2012; the White House says that last year's total of nearly $110 billion in these payments was the highest ever.
The president said the ultimate to goal is to end all improper payments.
"We have to challenge a status quo that accepts billions of dollars in waste as the cost of doing business," the president said.
Bad payments range from outright fraud to checks issued to the wrong person or for the wrong amount because of a typo. The president said that every dollar wasted should be going toward helping people afford college, providing benefits to the military and many other legitimate uses of tax money.
For perspective, he said the $110 billion figure in wasted money last year was more than the budgets of the Department of Education and the Small Business Administration combined. "That's unacceptable," he said.
The bill marked the latest effort by the administration to get a tighter handle on Washington spending, a politically sensitive issue as more Americans show concern about the nation's mounting debt. The president used the opportunity to recite a series of other measures to target unneeded spending under his watch.
Last month, he ordered creation of a federal "Do Not Pay List" — a database that agencies ultimately must search before writing checks to individuals and contractors.
Obama has proposed a three-year freeze in spending not tied to national security. He has instituted changes in how government contracts are awarded to save billions in such costs, and he has directed agencies to sell excess or underused real estate.
Federal regulations issued Thursday will require a two-stage process.
First, consumers will appeal directly to the insurer. If they get a second denial, they can appeal to an independent reviewer whose decision is binding. Consumers can also use the system if their coverage gets canceled.
Many health plans already have a system for appeals, although not as friendly to consumers. The number of people covered by the new safeguards will grow from about 40 million next year to as many as 88 million by 2013.
Obama warned that wasteful red-tape, bureaucratic overlap and errors were throwing precious taxpayer dollars away, and said the government should emulate hardworking Americans by trimming its budget.
"When we continue to spend as if deficits don't matter, that means our kids and our grandkids may wind up saddled with debts that they'll never be able to repay," Obama said before signing the legislation at the White House.
"The challenge I'm making to my team today is to reduce improper payments by 50 billion dollars between now and 2012 -- And this goal is fully achievable."
The US budget deficit, which the White House warned earlier this year could reach 1.555 trillion dollars this year, has emerged as a huge political issue and threatens to crimp Obama's ambitious reform plans.
At a recent summit of the Group of 20 leading economies in Toronto, Obama vowed to halve the deficit within three years.
Republicans accuse Obama of running up the deficit with massive spending plans and a government takeover of vast sectors of the economy.
But Obama counters that former president George W. Bush blew open the fiscal gap with tax cuts that were not paid for and says his deficit spending was necessary to jumpstart the crisis-mired economy.
Improper payments by the government last year reached nearly 110 billion dollars, the highest total ever, according to the White House.
Inefficiencies in government over the past three years have seen the government pay out more than 180 million dollars in benefits to Americans who had died and more than 230 million to ineligible fugitives or convicts.
Obama agenda: Financial reform signed into law
The New York Times: 'President Obama signed a sweeping expansion of federal financial regulation on Wednesday, signaling perhaps the Democrats' last major legislative victory before the midterm elections in November, which could recast the Congressional landscape."
"Harvard Law School professor Elizabeth Warren, whose rise to prominence has been fueled partly by her proposal for a federal consumer protection bureau, now is at the center of a political fight over whether President Obama should nominate her to run the powerful regulatory body," the Boston Globe writes, adding: "That has prompted an uprising among Warren's legion of supporters, many of whom have come to know her from her appearances on newscasts, 'The Daily Show With Jon Stewart,' and in a Michael Moore documentary about capitalism. The possibility that Warren might be passed over for the job has prompted her backers to launch a lobbying campaign that had gained more than 160,000 online signatures this week."
The Washington Post notes how the Obama White House is besting the U.S. Chamber of Commerce.
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President Obama signed into law the most sweeping financial regulatory overhaul since the Great Depression Wednesday, saying that the new laws will foster innovation, not hamper it
Washington Wire condensed Obama's 89-page proposal for financial regulatory reform to a more manageable series of bullet points.
On June 17, 2009, President Obama proposed "sweeping overhaul of the United States financial regulatory system, a transformation on a scale not seen since the reforms that followed ...
After a classic David and Goliath showdown between Wall Street might and a small band of reformers, a 2,000 page Wall Street reform bill passed the U....
The financial regulatory reforms approved by the Senate and sent to President Barack Obama will provide important consumer protections. The financial regulatory reforms approved ...
African Americans stand to benefit from the new financial rules being pushed by President Barack Obama today, said Dr. Cecilia Rouse, a member of th
Financial reform will mean changes. Chicago Tribune 7/19/2010 3:47:00 AM GMT 2 ... Contact Us Advertise with Us Link to Us obama reform
It's better than nothing. But not much better. ... President Obama's big speech on financial reform is here. After hearing it, I don't feel so bad about being unable to make the subject ...
A blog by James Surowiecki. ... President Obama's speech on financial reform at Cooper Union was not rhetorically memorable, but substantively he hit the right notes.
The 2,319 page financial regulation bill that just passed Congress is filled with vague, complicated language. Some language will weaken our financial system and make it less ...
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Wall Street slips post Ben Bernanke's comments
Published on Thu, Jul 22, 2010 at 07:46 | Updated at Thu, Jul 22, 2010 at 08:48 | Source : Moneycontrol.com
In US markets, a negative response to comments from Ben Bernanke about continued uncertainty in the economy and Fed's preparations to take more policy actions led to a sharp, broad-based slide after choppy trade for most of the session.
Nasdaq Composite was down 1.58% or 35.16 points at 2187.33. Standard & Poor's 500 was down 1.28% or 13.89 points at 1069.59. Dow Jones Industrial Average was down 1.07% or 109.43 points at 10120.53.
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Barack Obama, US President, "The fact is the financial industry is central to our nation's ability to grow to prosper to compete and to innovate. There are a lot of banks that understand and fulfill this vital role and there are a whole lot of bankers out there who want to do right and do right by their customers. This reform will help foster innovation not hamper. It is designed to make sure that everybody follows the same set of rules so that firms compete on price and quality not on tricks and not on traps."
Ben Bernanke, Chairman, US Federal Reserve, "We also recognize that the economic outlook remains unusually uncertain. We will continue to assess ongoing financial and economic developments and remain prepared to take further policy actions as needed."
In economic data, US mortgage applications jumped last week and demand for home refinancing loans hit the highest level in 14 months, according to the mortgage bankers association. The reports provided a glimmer of hope for the struggling housing market.
It's going to be a very important day in terms of economic data that's expected from US, all eyes would be on the key initial jobless claims to be released later today. The consensus estimates the number to come in higher than last week at 450,000 this week. It plunged to 429,000, the previous week.
Meanwhile, existing home sales for June is expected to be lower than last month at 5.26 million. In May they had fallen 2.2% to an annual sales rate of 5.66 million from April's 5.79 million.
The conference board's index of leading indicators gained 0.4% in May after no change in April. However, the figure for June is seen in negative territory at minus 0.2%.
Meanwhile, the euro fell sharply against the dollar while the yen rallied after Federal Reserve Chairman Ben Bernanke expressed concern about the US economy, dampening investors' appetite for risk.
Oil prices extended losses to more than a dollar after Federal Reserve Chairman Ben Bernanke's comments about economic uncertainty. A surprise increase in crude inventories last week also weighed on prices.
Base metals consolidated gains. Copper prices rose in London trade on Chinese buying and falling stockpiles. However, they are all trading lower in Asia this morning.
http://www.moneycontrol.com/news/internationalmarkets/wall-street-slips-post-ben-bernanke-s-comments-_471449.htmlPresident Obama lays into lenders
'Main Street' banks object, blame Wall Street for financial crisis
Thursday, July 22, 2010 - Updated 9 hours ago
President Obama engaged in some old-fashioned bank bashing as he signed the historic financial-reform bill that he guaranteed will forever end Wall Street bailouts.
The president's sometimes cutting remarks left bankers fuming and some predicting he may end up regretting his no-new-bailouts promise.
"As he has not done throughout this entire process, the president again failed to make a distinction between Wall Street companies and Main Street banks that weren't the cause of the financial crisis," said Bruce Spitzer, a spokesman for the Massachusetts Bankers Association.
Louis Harvey, president of Dalbar Inc., a Boston research firm, said the reform bill merely addresses the problems that caused the 2008 subprime-mortgage meltdown - and there's no way to tell when and in what form a future financial crisis will unfold.
"I have studied the bill and found no supporting evidence for his claim," Harvey said of Obama's anti-bailout vow.
As hundreds of dignitaries looked on in Washington, Obama said the bill will go after "unscrupulous lenders" who took advantage of consumers and other firms that engaged in unchecked "abuse and excess" over the years.
While bankers in general didn't like the president's speech, Obama did go out of his way to say blame lay from "certain corners of Wall Street to the halls of power in Washington."
He said the bill will protect consumers, foster innovation and promote industry responsibility.
"The American people will never again be asked to foot the bill for Wall Street's mistakes," he said. "There will be no more taxpayer-funded bailouts. Period."
Obama went out of his way to praise U.S. Rep. Barney Frank (D-Newton), the lead craftsman of the bill in the House, and Frank's counterpart in the Senate, Chris Dodd (D-Conn.). The president couldn't even finish a sentence in his prepared remarks before onlookers burst into loud and sustained applause for Frank and Dodd, both of whom stood next to the president.
One person who wasn't in attendance was U.S. Sen. Scott Brown (R-Mass.), who provided a key vote to ensure the bill's passage. But a Brown spokeswoman said the senator declined an invitation to the ceremony, saying Brown "believes the Congress and the administration needs to finally turn the focus onto job creation and fixing the economy."
Attorney General Martha Coakley, who lost to Brown in last January's special U.S. Senate election in Massachusetts, did attend the ceremony. Coakley has forced Wall Street firms to ante up hundreds of millions of dollars to compensate victims of the financial debacle.
http://www.bostonherald.com/business/general/view.bg?articleid=1269462
Financial reform law helps U.S. insurers, reinsurers: Analysis
Posted On: Jul. 22, 2010 12:43 PM CENTRAL | Add a comment | Reprints
Mark A. Hofmann
NEW YORK—The Dodd-Frank Wall Street Reform and Consumer Protection Act could help U.S. insurers and reinsurers "maintain their competitive positions in the global marketplace," according to an analysis released Thursday by Standard & Poor's Corp.
S&P cites the creation of a Federal Insurance Office within the Treasury Department as an example. S&P notes that the office will represent the United States in the International Assn. of Insurance Supervisors and aid in negotiating international agreements.
"This could constructively address a concern that some regulatory parties within the international community raised as they evaluate the level of supervisory equivalency to be placed on the U.S. system of national insurance regulation," said S&P.
S&P said this would be of value to U.S. reinsurers that would be "particularly vulnerable" to higher operational costs and lower profit margins if the U.S. regulatory system failed to gain full equivalency recognition.
S&P also notes that some insurers have used securitizations and derivatives as a means of managing risks, and said that the new law "only marginally affects" such activities.
The rating agency said it does not expect the law, which President Barack Obama signed Wednesday, to have an immediate credit impact on its ratings of U.S. insurers and reinsurers.
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Timothy Geithner: Obama will look at changing tax code next year
Ron SchererAssociated Press
Published: Thursday, July 22, 2010 11:49 a.m. MDT
Elizabeth Warren may have received some important support from the Secretary of the Treasury Tim Geithner to run the new Consumer Financial Protection Bureau — an appointment that would be sure to be opposed by many Republicans.
In a Monitor sponsored breakfast for reporters, Mr. Geithner said the Harvard law professor, who was also an early and harsh critic of the financial institutions, would be "an enormously effective" leader of the institution which is part of the financial reform bill President Obama signed into law on Wednesday. He said Ms. Warren would bring "enormous credibility" as a critic of the credit boom that lead to the bailout of the banks.
''She pointed out the extent of things happening in the mortgage market and consumer credit markets that ultimately helped bring the economy to the edge of collapse," said Geithner.
However, the Treasury Secretary pointed out, the decision is up to President Obama and he said he had heard two other names — "people who are very well qualified," he added — mentioned by his colleagues in the White House. And, he added, "I've heard others," but he declined to name them except to say "they're good."
In his wide-ranging discussion with reporters, Geithner said the administration would take a look at corporate taxes next year, again a move that would likely be opposed by many Republicans if it involves raising taxes.
http://www.deseretnews.com/article/2012117/
Obama signs financial bill aiming to help consumers, prosperity
By KEVIN G. HALL, McClatchy
First published in print: Thursday, July 22, 2010 WASHINGTON -- With a broad smile and the stroke of a pen, President Barack Obama on Wednesday capped a contentious 18-month struggle and signed into law the broadest revamp of financial regulation since the Great Depression.
Read more: http://www.timesunion.com/AspStories/story.asp?storyID=953008&category=NATIONAL#ixzz0uR6pWl4I
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The British Example
22 Jul 2010 01:24 pm
Douthat believes that American conservatives could learn a thing or two from David Cameron:
Cameron's critics missed the forest for the trees: They took note of every centrist lunge, every compassionate-conservative gesture and every touchy-feely gimmick, while failing to recognize that the Tory leader and his brain trust were putting together a more sweeping and serious blueprint for cutting and decentralizing government than we've seen from any Republican politician since Newt Gingrich, and maybe Ronald Reagan.
Whether that agenda can succeed is still very much an open question. But its very existence offers an impressive example to American conservatives, and a rebuke to those on the right who see any attempt to reform and modernize the G.O.P. as a betrayal of conservative principle.
I couldn't agree more. Check out this first-hand account of how conservative thought and policy are thriving in Britain, infused with some liberalism from their coalition partners. They have not clung to Thatcherism as the GOP has to Reaganism, because they are Tories and know that societies and problems change, and so too must policy. This strikes me as very sharp:
James Forsyth made the point that Cameron himself is not a particularly ideological thinker. He is a traditional organic Conservative. The combination of the electorate's distaste for politicians and the financial swamp which emerged after the credit-crunch, means that his government must be a truly reformist administration. Modern Conservatives' big and radical ideas are driven by the huge and deep-rooted problems that were left on Cameron's desk when he arrived at No10.
No wonder he and Obama get along - although, of course, Obama is more liberal than Cameron on the economy and more authoritarian on civil liberties. Here's the future:
New politics and new economics will have the greatest chance of success if they are born in relationships that are based on trust. One of the roles of Government needs to be in creating open trust networks where people do not need bureaucracy because there exists ethos and intimacy. Those who cynically dismiss the possibilities of this happening should look at Zopa, the person-to-person lending service, or E-bay, the on-line auction house. In a system such as E-bay a person's trust rating is often worth more than a single financial transaction. This fact and the innate human desire to live in a fair and orderly society means that 135 million people each year give money to complete strangers for products they mostly have never seen. By tapping into the nature of trust it should be possible to significantly reduce transaction costs.
Phillip predicts that the Coalition will deliver mass mutualism because our future relies heavily on the success of relationships in economic environments.
They take climate change and civil liberties seriously; they are investigating torture; they are including everyone in conservative values. Can a reform Toryism save American conservatism? Or should I have stayed in Blighty?
(Photo: David Cameron and Nick Clegg by Christopher Furlong/Getty.)
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http://andrewsullivan.theatlantic.com/the_daily_dish/2010/07/the-british-example.html
Krishna, Clinton discuss Obama visit, India-Pakistan talks
US fears another Mumbai type attack to ignite Indo-Pak war
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Obama Financial Reform
Bank Reform Groups Celebrate Final Passage
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Judd Gregg and Ben Nelson: More Socialism Please
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Reformers, All! The GOP Would Like to Explain
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Bloomberg Critiques Obama's Financial Plan
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Financial reform is victory for Obama, consumers
In Print: Friday, July 16, 2010
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The financial regulatory reforms approved Thursday by the Senate and sent to President Barack Obama will provide important consumer protections and place new restraints on the ability of banks to make the kinds of investments that contributed to the economic meltdown. The legislation is far from perfect, but it is the most sweeping overhaul of bank regulation since the Great Depression and a significant victory for the president.
The bill passed the Senate because three Republicans, Massachusetts' Scott Brown and Maine's Susan Collins and Olympia Snowe, dared to think for themselves, rose above partisanship and voted with Democrats for much-needed reform. As expected, Florida Democratic Sen. Bill Nelson voted for the bill. Republican Sen. George LeMieux voted against it and continues to be an obstacle to reform.
The bill covers plenty of ground. Companies that own commercial banks no longer will be able to speculate with their own profits, and the banks will be able to invest just 3 percent of their capital in private equity or hedge funds. Credit rating agencies that helped fuel the economic collapse by giving high marks to junk investments could be held liable for investors' losses if they act recklessly. A new council of regulators will look for threats to the financial system to head off another too-big-to-fail scenario — and the costs of shutting down those that do fail would be paid by the surviving companies instead of taxpayers. A new consumer protection office within the Federal Reserve will oversee such services as mortgages, credit cards and short-term loans.
Of course, the legislation should have been stronger. For example, an effort to require banks to spin off risky derivatives-trading operations was squashed. But the new law will require many of these sorts of trades to be more transparent. Now the financial lobbyists will focus on the regulators who will write the rules to enforce the law and fill in the blanks. The administration cannot allow the intent of the reforms to be watered down.
As Obama said after the bill passed, the economic crisis was largely the result of "recklessness and irresponsibility in certain corners of Wall Street.'' Nearly two years since Lehman Brothers collapsed and the crisis began to rapidly unfold, Congress finally has embraced fundamental change to the financial system. Whether the reforms would have prevented the economic meltdown is guesswork, but they will provide more transparency and regulatory tools to recognize and head off the next one much faster. While some Republicans already are calling for its repeal, the legislation is an important victory for the president and for consumers who are still paying a painful price for the worst economic crisis in generations.
[Last modified: Jul 15, 2010 06:47 PM]
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Mary Bottari | Posted 07.16.2010 | Politics