Posted by Karl Denninger
A proposal by former Federal Reserve Chairman Paul Volcker to limit bank’s proprietary trading will be either be dropped or significantly modified in the Senate, lawmakers and staffers told dealReporter.
Senate Banking Committee ranking member Richard Shelby (R-AL) said he opposes the so-called Volcker rule and the Obama administration’s call to levy a USD 90bn tax on banks.
A Dodd staffer said the senator is likely to quietly drop or modify many of the recommendations in the Volcker rule to ensure Republican support for regulatory reform.
Well it ain’t gonna be quiet no more!
These goons on Wall Street think they can keep this up. They might want to pay attention to the fact that there’s this thing called “an Election” coming in November, and the people are pissed, as noted in this Bloomberg article:
Feb. 1 (Bloomberg) — Politicians under pressure from angry voters to show progress on financial reform are losing patience with bankers waiting to reach global harmony on new rules.
The people are still short of endorsing clanedestine neck tie parties, but I suspect it’s not by much. When President Obama said that he was “all that was standing between the banksters and people with pitchforks and torches” he wasn’t kidding.
The idea that the people of this nation will simply sit still while the looting continues is somewhat of a fantasy on the part of those on Wall Street. Thus far the retaliatory actions have been both peaceful and lawful – mostly – such as “Move Your Money” and the like.
But there’s no guarantee that will remain the case, and the simple reality is that much of what went on during the 2000s was not “an error” or “bad judgment”, it was a blatant heist, and the people are wising up to what really happened.
Where the line resides is not something I can accurately predict. I can only note our Founding Fathers seemed to have a good grasp of things in The Declaration:
…all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed.
Indeed we have tolerated far more than we probably should have. But then The Founders warned….
But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.
Where and when does that line get crossed? How many people get thrown out of their homes, have 30% credit card interest rates, watch the banksters literally grab over a trillion dollars in printed money and claim “profits” for themselves of over $100 billion in bonuses, evade mandates on long-term holding of those bonuses in the form of stock to prevent cashing out before the sustainability of their practices can be proved up and more?
I do not know where the line is.
I only know that history says that it exists, that no man, no bankster and no government knows exactly where it is, but that once crossed it cannot be “un-crossed” just as an egg cannot be unscrambled.
We need solid, real financial reform. We must renounce “bubble-nomincs.” We must shut down the fraud-laced “securitization” machine permanently, prosecute those who have unlawfully concealed risks and lied about asset quality and return our economy to stable, productive output instead of financial speculation.
The Banksters all claim that if we were to do this that society would collapse and that our economy could not survive.
They’re wrong, just as Henry Paulson was wrong when he said he had “no choice” when, allegedly (according to his book) the Chinese and Russians threatened to collapse Fannie and Freddie.
Hank had a choice, assuming he’s not lying of course. He could have told the Russians and Chinese to bite him – on national television, with George Bush at his side. He could have told them that if they tried it that the United States Treasury would, by executive order, declare their Treasury Holdings worthless.
Yes, that would have stopped the “gravy train” of being able to spend more than we make in the government. Yes, this would have forced immediate austerity and facing of the truth.
Is that bad?
What have we done since? Added what – $2 trillion+ to the national debt – more debt we don’t have and can’t pay? Emitted another budget proposal, just today, to add $1.6 trillion more? Built yet another artifice – another fraud – on top of the previous ones? Written more “Option ARMs” on our children and grandchildren’s backs to prop up a cabal of banksters on Wall Street who then fawn all over The Senate with their “campaign contributions” so they can keep skimming off huge parts of our economic structure for a few thousand residing on Wall Street?
How’s that going to work out folks?
How will we settle up and ultimately pay this debt load down?
We won’t, of course. Neither will anyone else. Greece, Spain, the UK – all are lessons for us, if we choose to learn them before we get to live them.
Watch those nations. If you think this is just about Greece you’re nuts. The public employee pensions there are ridiculous. Guess what – they’re ridiculous here too. In the closest “little city” to here there are many retired police officers and firemen who have pensions north of $100,000/year. There are many places where six-figure pensions are considered “normal” or “reasonable” – for public safety workers and teachers. We don’t have the money, we can’t afford to gold-plate the steering wheels of the cop cars and despite all the bleating the fact remains that the primary function of the police department is to write traffic tickets and take a report after you are burglarized, raped or robbed.
Are these functions important? Yes. Do they call for better than a middle-class wage? Nope. Is a middle-class wage $100,000 a year? Nope. The 2008 Median Household income for California is $61,021. For Florida, $47,778. For New York, $56,033.
So why are we paying out pensions of double that to what should be middle-class employees in retirement?
Let’s face the facts folks – we can either stop the plundering across society – by both banksters and public employees – or we will face a crisis similar to what Greece is dealing with now.
It will be more pleasant for us to take our medicine voluntarily rather than having it forced down our gullet, but doing so starts with chaining the banksters and their penchant for offloading risk to others and, for those who refuse, jailing them outright, lest the public get ahold of them and not bother with the pleasantries (and constitutional right) of a trial by jury before handing up a sentence.
At the same time we must fix the public employee entitlement mentality, by firing them and replacing them with unemployed Americans if necessary. We have 1 in 5 working-age men between 25 and 54 out of work – there is no shortage of available people to take these jobs.
It is time to pay the check folks, before we are literally forced to eat it.