Memo to Senator Dodd: Financial Reform Need Not Be Complicated [View article]
Perhaps it will prevent the crash of 2012!
On Nov 11 03:25 PM woollyB wrote:
> Glass-Steagall was passed in 1932-33 (actually 2 acts) to prevent > the market crash of 1929, and it was repealed in 1999, just in time > for the next big turn down. If we reinstate it in 2010 to prevent > the crash of 2008, we'll end up repealing it again once we get into > a long enough uptrend for everyone to believe that the Act is inhibiting > growth and profits. > > P.S. to MyrEnforker, when was banking ever for the public good? Not > in any banking history I've ever read.
Memo to Senator Dodd: Financial Reform Need Not Be Complicated [View article]
The only "regulations" we need are:
(1) Public should not bail out any failed private enterprise. If its failure threatens our security, it should be nationalised with its shareholders losing out and its bondholders taking a haircut. This is what gov't did with GM & Chrysler, and this is what should have been done with any bank, no matter how large. No amount of regulation will work as long as the upside goes private and the downside goes public.
(2) Stop manipulating interest rates and let markets set them based on equilibrium between willing lenders and borrowers.
(3) Institute an "Alternative Maximum Tax" that ensures creative entrepreneurs, the true engine of our economy, don't choose "early retirement" and "spend more time with family" ......, when they really mean "I've earned enough money, and the incremental after-tax income is not worth the extra effort" !
Capitalism and free markets have brought us prosperity, and the only "regulations" we need are to stop distorting them.
The Death of Mortgage Banking and the Shadow Banking System [View article]
This sounds like a reasonable set of rules to reduce liklihood of another bubble and more egregious losses being passed on to the overburdened public treasury. Too bad there isn't a minimum downpayment requirement, just like there used to be until the 1990's. My understanding is that in Canada, buyers still must put 20% down, but if this appears onerous, perhaps we should start with 10% then increase it to 20% after a few years, after the market has stabilized.
As head of the house banking committe, Rep. Frank bears much responsibility for the current mess. Had he exercised sound judgment and proposed such legislation a few years ago we would never have gotten to this sorry state of affairs.
How to Profit from Market Manipulation [View article]
In the long-term, fundametals win.
If the hedge funds are cooperating with the PPT to buy stocks, do you expect them to end up in a year owning vast amounts of shares priced at 40x earnings and yielding 0.5%? I doubt it.
In the short term, they can act as a damper to slow down a plunge, or as a rocket to power up a spike, but eventually, fundamentals will rule. So private investors just have to consider probable PPT actions as one more facet adding complexity to short-term price movements.
Memo to Senator Dodd: Financial Reform Need Not Be Complicated [View article]
On Nov 11 03:25 PM woollyB wrote:
> Glass-Steagall was passed in 1932-33 (actually 2 acts) to prevent
> the market crash of 1929, and it was repealed in 1999, just in time
> for the next big turn down. If we reinstate it in 2010 to prevent
> the crash of 2008, we'll end up repealing it again once we get into
> a long enough uptrend for everyone to believe that the Act is inhibiting
> growth and profits.
>
> P.S. to MyrEnforker, when was banking ever for the public good? Not
> in any banking history I've ever read.
Memo to Senator Dodd: Financial Reform Need Not Be Complicated [View article]
(1) Public should not bail out any failed private enterprise. If its failure threatens our security, it should be nationalised with its shareholders losing out and its bondholders taking a haircut. This is what gov't did with GM & Chrysler, and this is what should have been done with any bank, no matter how large. No amount of regulation will work as long as the upside goes private and the downside goes public.
(2) Stop manipulating interest rates and let markets set them based on equilibrium between willing lenders and borrowers.
(3) Institute an "Alternative Maximum Tax" that ensures creative entrepreneurs, the true engine of our economy, don't choose "early retirement" and "spend more time with family" ......, when they really mean "I've earned enough money, and the incremental after-tax income is not worth the extra effort" !
Capitalism and free markets have brought us prosperity, and the only "regulations" we need are to stop distorting them.
The Death of Mortgage Banking and the Shadow Banking System [View article]
As head of the house banking committe, Rep. Frank bears much responsibility for the current mess. Had he exercised sound judgment and proposed such legislation a few years ago we would never have gotten to this sorry state of affairs.
How to Profit from Market Manipulation [View article]
If the hedge funds are cooperating with the PPT to buy stocks, do you expect them to end up in a year owning vast amounts of shares priced at 40x earnings and yielding 0.5%? I doubt it.
In the short term, they can act as a damper to slow down a plunge, or as a rocket to power up a spike, but eventually, fundamentals will rule. So private investors just have to consider probable PPT actions as one more facet adding complexity to short-term price movements.