Dodd-Frank push-out provision: Volcker rule already makes it unnecessary

[ucrdem]

The Dodd-Frank push-out rule rolled back in the current spending bills says banks can't invest in derivatives and similar risky funds and have to "push out" such investments to non-federally insured affiliates. But removing it doesn't permit banks to invest in such funds again, because the "Volcker rule" -- requested by President Obama -- already says banks can't use their proprietary (FDIC) funds to make such investments:

http://en.wikipedia.org/wiki/Volcker_Rule

http://www.bloomberg.com/news/2014-10-20/did-bank-rules-kill-liquidity-volcker-frank-respond.html

Per NPR, Barney Frank, one of Dodd-Frank's authors, supported elimination of the push-out rule:

http://www.npr.org/2014/12/11/370156241/controversial-budget-bill-would-roll-back-dodd-frank-provision

Long and short: removing this provision won't cause the sky to fall.

...............
edit to fix subject line.

[VanillaRhapsody]

1. It would explain a thing or two...

[ucrdem]

2. Yes it would. . .

Didn't want to go there but nothing surprises me these days.

[MFrohike]

3. Hahaha

Of course, there is the tiny problem that the rule Congress addressed last in time will be seen as controlling by any court. That alone would create an exception to the "ban" on proprietary trading (not an outright ban). If it really was so harmless, nobody would be pushing to change it.

[alcibiades_mystery]

4. If it was meaningless, the GOP would not have added it

So they just included it for shits and giggles. And silly ole Liz Warren just doesn't know how to read that complicated old law, yeah?

Gimme a fucking break.

[ucrdem]

5. Chris Dodd and Barney Frank aren't GOP.

They wrote the bill.

[alcibiades_mystery]

6. And they're acting like goddamn fools, if they think repealing this crucial part of their law

is just an exercise in symbolism for the Citigroup lobbyists who wrote the fucking provision. Wait, was Dodd one of them?

Explain why it was included, if you can.

Because it has no effect and tra la la?

[ucrdem]

8. Inclusion of the Volcker rule was evidently requested by President Obama.

Making the push-out rule effectively redundant. I imagine the banks don't want either, but as I understand it they specifically complained that having both in Dodd-Frank caused compliance problems. In other words, if the Volcker Rule goes, then we've got a problem, but it went into effect after much contentious negotiation in April 2014, so I think it's here to stay.

[alcibiades_mystery]

11. Don't worry everybody: they just want to eliminate the push out rule because it's a compliance

headache.

It's redundant, and doesn't effectively limit their activity, which is already limited by Volcker, so they are expending all this energy to reduce at-home paperwork!

Jesus fucking Christ, tell me another one.

[ucrdem]

12. It would be far better to have both safeguards, I agree.

But if it's a question of keeping the checks in the mail in the dead of winter, I can live with this concession, which won't have any real effect. But I'm not saying I'm happy about it.

[geek tragedy]

18. Push out was authored by Blanche Lincoln.

So, yeah it helps somewhat, but it's not the centerpiece of the legislation, since it doesn't involve capital, balance sheets, or 90 % of derivatives.

Banks are greedy and want cheap liquidity as a subsidy to their b/d business.

[okaawhatever]

10. No, it's one down one to go. They apparently had to get rid of two provisions. The GOP has

accomplished two things
1. They're half way to getting rid of the derivative regulation
2. they got all the Dems pissed off at their own party.

[pnwmom]

7. I trust Sen. Warren't judgment about this. n/t

[ucrdem]

9. The bill had already been negotiated by both parties and the WH.

As I understand it, if it doesn't pass, it will have to be renegotiated in the next Congress, and we'll get another government shutdown to boot. I don't see how grandstanding at this point is going to gain anything.

[geek tragedy]

13. Push out involves trading certain derivatives

Volcker involves balance sheet.

[ucrdem]

14. "Proprietary trading" seems to be the term of art:

Volcker Rule, per wiki:

The proposal specifically prohibits a bank or institution that owns a bank from engaging in proprietary trading that is not at the behest of its clients, and from owning or investing in a hedge fund or private equity fund, and also limits the liabilities that the largest banks can hold.

http://en.wikipedia.org/wiki/Volcker_Rule

[geek tragedy]

15. Yeah diff is banks can still deal in derivatives

just can't hold them.

[joshcryer]

16. Be careful, you'll be called a far right winger for noting this.

[Octafish]

17. So long as the taxpayers foot the bill at the casino, everything's all right.

Government by Goldman Sachs means bailouts for billionaires.

[Rex]

19. Well you know Congress, can't do anything until the very last minute.

Why is that? What the fuck do they get paid for if they do everything at the last minute? Lazy good fer nothings. And when they do something at the last minute, they slip in something to let rich people buy more politicians or better politicians? I can't decide which the plutocracy wants. What do you think? More or Better ones?

Next we will let Exxon Mobile write our environmental policy. No doubt it would be praised as a glorious step forward.

[Octafish]

30. They want everything.

In 1991, I met Jean Bertrand Aristide, then the president in exile of Haiti. It was a short time after the generals, with the tacit approval of Poppy Bush, overthrew the first democratically elected leader in 70 years of the poorest nation in the hemisphere. Aristide said, in Haiti, the top 1-percent own 99-percent. I wrote about it 13 years or so later on DU:

Aristide told me the Generals ran Dope, Inc. on Haiti. Personally.

Posted by Octafish in General Discussion (Through 2005)
Sat Mar 20th 2004, 06:49 PM

Sorry if the following is an old read. The thing held true then and holds true still…

I met Jean Bertrand-Aristide after he was deposed by the generals in the early 90s. He came to metro Detroit and spoke before the Cranbrook Peace Foundation.

The newspaper I then worked for didn’t see any reason for sending me to cover Aristide’s speech. The editors weren’t BFEE, but the events on a Caribbean island just weren’t “local” enough for their budget. So, I went on my own time.

The Cranbrook people were happy to see me. They wanted, of course, as much coverage as possible. So, they invited me and the other interested reporter types to have at him for an hour before his address.

I’m ashamed to report, at an important event in two nation’s larger media market, only a couple of CBC radio reporters out of Windsor and one local Detroit TV crew bothered to show. I was the lone print guy. Anyway…

Aristide answered every question asked in English or French. He also told us about life in Haiti, where there were four doctors to care for 4 million people. Another interesting stat: One percent of the population own 99-percent of the property.

I asked Aristide what the United States could do to help him restore democracy to Haiti? Aristide said all Poppy Doc Bush had to do was pick up the phone, call the generals and say, “Get out,” and they would quit their coup and the first democratically elected leader of Haiti in 75 years would be returned to power. Bush didn't and Aristide wasn't until Clinton sent the US Marines, many years and many Haitian lives later.

The reason for Bush Senior's inaction? Aristide said he didn’t know the answer, but he suspected Bush’s politics favored the landowners over the masses. (“Sounds familiar,” I then thought and still think today.)

Aristide said that the generals were deep into the wholesale cocaine importation business. Now who would be their partner in all that? Besides the wealthy landowners, for whom the Generals worked, I mean.

Original OP from 2004: http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=104&topic_id=1257891&mesg_id=1259743

The Bushes and the people they front for are doing to the United States of America what the landowners of Haiti -- and those in Columbia and the other nations of the world where the small minority control the majority of wealth, land and resources. These undemocratic tools only work to enhance their own privileged positions and holdings. The rest of humanity could be cattle or piss-ants, for all they care.

You know I am a broken record when it comes to Nov. 22, 1963: The problems our nation and world face today -- from war without end to inequality and welfare for the wealthy to pollution and overpopulation to those who think "There's nothing we can do..." stem from that moment when the forces of totalitarianism took control of the US government from democracy.

[ucrdem]

32. Thanks Octa, Aristide is a hero who speaks the truth, no question.

Great memory and thanks a million for sharing it. But the way I'd connect it to this episode is to put Obama in the same position and be thankful he hasn't succumbed to the Aristide treatment he's gotten 24/7 since he's been in office, namely, demonization of every conceivable misstep, near misstep, or strategic maneuver, not to mention the crimes of his predecessors he had nothing to do with. You might see him as a prevaricator but I see him as a Houdini who keeps escapting traps laid for him not unlike the beartrap that snatched Aristide out of Port-au-Prince.

[freshwest]

20. Hi, ucrdem. A party based on helping the vulnerable and poor doesn't shut down government, because:

The current system still keeps people alive (transport, public order, healthcare for some, general order that enables the movement of necessities such as food to most people), and you can't let that all go at once without damage. And the president is responsible for keeping the current system functioning.

That's from Muriel. And that is what Obama is charged with saving. Those who are not on the edge don't have any problem with shutting it down. It is their luxury and they won't die because of it.

[neverforget]

21. I remember how the Great Recession created a bunch of poor because

of what the banks did. I guess it's okay now so the banks can do it again.

[freshwest]

22. Tell me about your own personal story, please.

[neverforget]

23. Do I have to be poor in order to understand that hundreds of thousands lost their jobs

and homes because of what the banks did? Seriously? I'm not poor now but I've been there. I don't lack empathy to understand the plight of those less fortunate than me.

[freshwest]

24. Do you have sympathy for those who will not be able to pay their rent in January with a shut down?

This is an honest question. I may be confusing you with those who are almost gleeful at the thought of a shut down to win a pyrrhic victory. I saw this same mood expressed in 2011, 2012 and 2013.

Rand Paul was ecstatic at the choice that the rightwingers would have to 'manage catastrophe':

http://www.democraticunderground.com/10023822515

Is it the feeling of those who want a shut down, that those 100 million people have nothing to lose in this?

Since it's basic civics that CR's, no matter how odious, save lives. I think certain people do have a lot to lose, and in their case, the loss would be immediate and catastrophic. Most will be unable to recover, the LP idea that churches and family will swoop in and make things works is callous, inaccurate falsehood.

During the last shut down threat, a DUer posted how his aging mother, who'd paid for her home but needed all of her SS check to live where she'd put in all her savings to make it through her retirement years. I know a number of people who are only one month away from permanent homelessness, if they don't get their SS check. He was terrified for her, as he couldn't afford to support her, and the house was in an area where it was not going to be able to sold in such a short time to make ends meet.

And in the long term, there will be no solution but to continue the current safety net paid for by the federal government. No one else wants to, or is capable of sustaining even in the most minimal fashion, 100 million. Imagine the fire sale on all of their land and possessions, which would not go to the poor to help them out, but to the rich who simply saw this as a time to swoop in and get tracts of land for nothing. They have the money to wait these thing out, they always do, and they wanted a shut down the last time. As they won't be hurt.

Losing all they ever had or what now sustains the poor would kill them. That would be the effect on the most vulnerable of society, they are living month to month. This most recent threat was explained by a DUer who served people Meals on Wheels in her community and said the elderly she deals with are so anxious about this that they are in a state of terror again. They have no place to go, no IRA, investments, ability to work, and they followed all the rules and didn't speculate or have money to burn.

Many are extremely vulnerable, and yes, we are being blackmailed by the GOP. We are being faced with lousy choices. Slow pain or quick pain. Some can't wait out a shut down, they will lose all they had, and they are in no position to take the brave stance others may feel emboldened to have, which is why I say they won't die from this. Perhaps they should reconsider and take a more inclusive approach. It's for sure that the rich won't, they want these folks dead, and as Cruz said, in their opinion, the poor are poor because they are unrighteous and should lose everything. I forget if he said they should die, but that was the general gist of what his cohorts believe.

We had a member at DU who worked for the government during the Clinton shut down. People were not able to get approval for Medicaid to get life saving care, their need for continuous access to the government services that provide such things was shut off and they died. Sometimes a few days causes death. Government is like a hospital, they should never close their doors because the need is 24/7/365 a year. Shutting it down will not hurt Cruz, Paul, Boeher, etc. They already 'got theirs,' and don't care. Our party was built on caring, setting up programs to keep people alive and healthy. That is what we stand for, not being arrogant like the the GOP is.

Others have died from not being able to negotiate a continually hostile milieu that gives them no room to change their lives or manuever in times such as are unnecessarily being foisted upon them.

Yes, the banks are where the money is but they were not always an bad engine for the American people. They have morphed into the now widespread social darwinism set of the ultrawealthy who know that by killing people off, they will inherit the spoils. I don't want Obama to miss the big picture when nearly a third of the population is at state.

That OP I references is the tip of the iceberg about the crisis that would result with a shut down. We can't let this happen, we have to get these nihilists out of power, not cave in to them by giving them what the really, really want - a total shut down.

Thanks for your thougtful reply.

[Cha]

25. Precisely fresh.. the President is trying to avoid a Shutdown like the goPhucks caused in 2013..

those who don't depend on getting checks like SS from the Gov and working for the Government.. don't give a shite about it. Millions do care.. I know I do.. and I know you do too. We all went through this last year and it was devastating and traumatic..

Nerdy Wonka @NerdyWonka
Follow
GOP shutdown the government in 2013. Democrats still didn't turn out in 2014, yet want to blame President Obama for the hand they dealt him.
5:30 PM - 11 Dec 2014 26 Retweets 19 favorites

http://theobamadiary.com/2014/12/11/a-tweet-or-two-186/

As someone on the link says.. (paraphrasing).. truly sickening how the gops got richly rewarded for their blatant treason by the voters and the non voters.

Thank you for you post, freshwest~

[ucrdem]

33. So true.

And from that perspective a redundant banking regulation doesn't come close to meriting the accusations of treason and betrayal getting tossed around last night.

[Cha]

36. Oh it wouldn't be them if they weren't showing off their ignorance and calling for his head.

[neverforget]

26. You asked me my story not if I had sympathy for those who

are going to be affected by the possible shutdown. Of course I have sympathy for them. Why wouldn't I? I am not "gleeful" or "ecstatic" aka Rand Paul about a shutdown, so don't even go there. The Republicans are looking to fuck anyone who is not wealthy.

The Republicans goal isn't a shutdown. It's to starve all the programs that help people and ultimately kill those programs. Right now, it's being done little by little, just a cut here and a cut there. But it adds up quickly and all those people you and I are concerned about, are out in the street, homeless and unable to pay their bills because the Republicans with some Democrats help helped put them there. Giving the banks what they want now is only enabling them and we'll go through this all over again.

When do we make a stand to stop that?

[aspirant]

28. We start taking a stand now!

The progressive voices are coming alive. There are protests in the streets.The repubs backlash from the shut-down was nil in the 2014 elections. Please tell me how a temporary shut down for the principles of the people is unjust. Anybody can see what's happening as it will only be a short time before all safety nets will be gone. Their will be homeless everywhere and we will be going up to gates of the filthy rich hoping they will put out a bowl of dog food for us. We won't have to worry about month to month, you will be living day to day. Legislative bills that cut money to the poor must be stopped any way we can. This has become an us vs them fight and if your not willing to fight and sacrifice, then go join them. For 6 years these filthy repubs have stopped the govt from passing much of anything for the people, literally shutting down the govt. So when we play the same game,we have people say please don't hurt the folks because they've gotten used to living month to month. Our children and grandchildren deserve better than this.

Neverforget, I'm with you, just added my emotional response to yours.

[GeorgeGist]

29. Extortion is lovely.

[ucrdem]

31. I don't see it as extortion.

I see it as politics, and as far as I can tell Obama got a pretty good deal, including funding for his immigration EO, which will make a huge difference in the lives of 4 million undocumented workers in the US. And he didn't give up much no matter what nasty hoo-haw AOL-Huffpo is selling.

[ucrdem]

34. Exactamundo freshwest.

When you really get down to cases, playing around with people's lives in this way is a dangerous business, to put it politely, worthy of hucksters like Rand Paul.

Nailed it.

[freshwest]

35. Thanks ucrdem. It's cruel and deadly.

[kevinmc]

27. if Barney Frank is for it makes me feel better about it n/t

[Cha]

37. Barney Frank? What did he say, kevinmc?

[ucrdem]

39. According to NPR he was for it before he was against it . . .

Old story I guess:

And actually, former congressman Barney Frank, one of the main authors of Dodd-Frank, made that point. In the past, he supported changing this derivatives rule. But putting an issue as complex as this into a huge spending bill is a huge mistake, he says.

http://www.npr.org/2014/12/11/370156241/controversial-budget-bill-would-roll-back-dodd-frank-provision

I agree on both counts: losing the rule is not a deal breaker, and Cromnibus is a lousy way to make laws, but given the lay of the land, it's about the only way available. Anyway, one last kick to cheer up anyone still convinced that the sky is falling. Good news: it ain't!

[Andy823]

38. K&R nt