Wall Street is Clinton's achilles heel and for Sanders's sake it will stay that way [View all]

[BlueMTexpat]

Interesting read from The Guardian. I am posting it here to avoid the snipers it will undoubtedly attract in GDP that will distract from its main points.

http://www.theguardian.com/money/us-money-blog/2015/dec/27/wall-street-hillary-clinton-achilles-heel-bernie-sanders?CMP=fb_gu

From the link:

Setting aside the idea that Wall Street, collectively, is as capable of conspiring effectively as Sanders believes (if it did, I doubt that we would have experienced the 2008 crisis, or that as many institutions or individuals within them would have been caught off guard, or nabbed by regulators for doing stuff that they shouldn’t), I’m not convinced that Clinton is the patsy that Sanders would like us to imagine her as being.
...
It’s true that Clinton’s reform plan for Wall Street isn’t as dramatic as that proposed by Sanders. She wants to keep the Dodd-Frank Act in place and keep funding for the Consumer Financial Protection Bureau at robust enough levels to ensure the organization is effective in fulfilling its mandate. Massachusetts senator Elizabeth Warren, who oversaw the creation of the CFPB and who has been an outspoken critic of Wall Street, hailed this and some other aspects of Clinton’s plans, even though the two differ on the extent to which Wall Street should be regulated.
...
Clearly, aggressive risk taking by banks was a major cause of the financial crisis. But of the institutions that were most directly responsible for triggering the 2008 crisis – Bear Stearns, Washington Mutual, Lehman Brothers, AIG, Fannie Mae – none was a big bank created by the repeal of Glass-Steagall. They were traditional investment banks, savings and loan institutions, insurance companies and a government-backed housing finance entity.
,,,
But it’s far from certain that simply restoring Glass-Steagall would be a panacea, or that failing to do so suggests that Clinton is in the bankers’ pockets. Indeed, Clinton’s plan has the virtue of stretching beyond the banks, and recognizing that real financial power on Wall Street often resides elsewhere: in the hands of hedge funds, private equity funds, offshore institutions, high-speed traders, and other kinds of trading platforms. The banks may be big and powerful, but they are the employees of these shadow institutions and individuals – folks like hedge fund manager John Paulson, whose firm made $15bn and who personally made $4bn (or $10m a day) shorting mortgage securities during the financial crisis. Clinton’s suggestions for regulating Wall Street call for more oversight of this “shadow” world.