Analysis: Wall Street won (banks keep derivatives units; Volcker rule softened)

[brentspeak]

If have you foisted upon you some melodramatically-intoned announcement of the "the most important financial regulation in the past x-number of years", you'll know that that person is full of hot air.

http://www.huffingtonpost.com/2010/06/25/financial-reform-bill-pas_n_625191.html

Shahien Nasiripour
First Posted: 06-25-10 06:37 AM | Updated: 06-25-10 10:26 AM

After nearly 20 hours over two final days filled with backroom dealing, House and Senate negotiators struck a grand compromise to merge the two chambers' competing bills to reform the nation's financial system in a party-line vote. But the long hours of closed-door meetings also appear to have fulfilled http://www.huffingtonpost.com/2010/06/18/wall-street-reform-could_n_616393.html">Wall Street's greatest wish: Many of the measures that offered the greatest chances to fundamentally reshape how the Street conducts business have been struck out, weakened, or rendered irrelevant.

Democrats unanimously supported passage; Republicans unanimously voted against it, warning that the bill doesn't accomplish its central objective: ending the perception that some financial firms are too big to fail.

The two most high-profile provisions were the last items to be considered. Neither emerged intact. One would have forced banks to stop trading financial instruments with their own capital and give up their stakes in hedge funds and private equity funds, named after its original proponent, former Federal Reserve Chairman Paul Volcker. The other would have compelled banks to raise tens of billions of dollars because they'd have to spin off their derivatives-dealing operations into separately-capitalized affiliates within the bank holding company, pushed by Senate Agriculture Committee Chairman Blanche Lincoln. As currently practiced both activities are highly lucrative, annually generating billions for the nation's megabanks.

snip

Ultimately, despite widespread approval among those pushing for fundamental reform in the wake of the worst financial crisis since the Great Depression, yet perhaps aided by near-unanimous revulsion among those on Wall Street, both were watered down in front of C-SPAN cameras beginning around 11 p.m. ET. Democratic lawmakers had been rushing to complete the bill by Friday morning under a self-imposed deadline. The final vote was recorded at 5:40 a.m. The conference began their final day just before 10 a.m. on Thursday.

[Name removed]

1. Deleted message

Sub-thread removed by moderator. Click here to review the message board rules.

[ProSense]

2. How did Wall Street win if

the two provisions that were expected to be stripped are still in the bill?

"Volcker rule softened"?

Does the author know what he's talking about? Merkley-Levin was added to the bill, strengthening the Volcker rule.

[kirby]

7. Didn't you read the article I posted

that you replied to earlier?

The one Lincoln provision was watered down because they added exemptions. Those exemptions mean that only 8% of stuff in the original Lincoln provision is subject to the changes.

As far as the Volcker rule, I have seen conflicting info. One says it survived the committee in tact, the other says it was watered down at the last minute.

[ProSense]

8. You mean where I

posted this?

"As far as the Volcker rule, I have seen conflicting info. One says it survived the committee in tact, the other says it was watered down at the last minute. "

Adding Merkley-Levin strengthened the bill. Period.

[kirby]

13. Take a look at this...

http://economicsofcontempt.blogspot.com/2010/05/merkley-levin-is-joke.html

[Nite Owl]

3. Goldman Sachs

seems pretty happy
http://www.google.com/finance?q=gs

[tridim]

4. FDL sure is slacking this morning..

Congrats HuffPo on beating FDL to the punch with your typical anti-Dem bullshit.

[WI_DEM]

5. Why don't you challenge Obama in the primaries in '12? once you get in you can really get things

done instead of bitching all the time.

[Tarheel_Dem]

10. Do you think the op could muster a quorum for anything? Who would

caucus with him? He seems to despise democrats more than republicans. What could he possibly get done?

[Cant trust em]

11. Probably doesn't get high marks for "plays well with others" nt

[brentspeak]

14. Funny, I've posted hundreds of threads over my time here blasting Republicans

And you confuse criticism of Obama's policies and criticism of the Republican-like "New" Democrats with "Democrats" as a whole.

Next time you claim someone here "despises democrats", get a clue. Or else don't comment.

[Tarheel_Dem]

15. ...

:rofl:

[phleshdef]

6. More cherry picking and willful ignorance of the significant from the incoherent wing of the left.

[Cant trust em]

9. Some people have trouble seeing the forest for the trees. nt

[Cant trust em]

12. I don't think that Wall Street's greatest wish would be a slightly weakened Volcker rule passing.

Man. We sure have set a high bar for success.

[Dr Morbius]

16. No bill which Wall Street found intolerable could be passed,

in this era of unprecedented financial control of the Congress. Whether Wall Street likes it or not, if Wall Street considers it unacceptable, they will spend whatever figure is required to stop it. So if we've got before us legislation that helps, a law which eliminates most of the most egregious behavior and establishes some rudimentary regulation, it's important to get it passed... rather than focus on trying to make Wall Street "lose."

They can't lose. It's their damn ball. Let's try to keep living in the real world.

[Phoebe Loosinhouse]

17. The Lincoln Derivatives amendment was similar to the Public Option in that

it was one of the only parts of the financial reform that made any large significant difference. And, like the public option, it's death was aided and abetted by the White House working behind the scenes as had been predicted weeks ago:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=8535589&mesg_id=8535927

same old same old.

Excellent Huffington Post piece.