President Obama's Wall Street Reform's "Volcker Rule Unveiled: May Slash Wall Street Bonuses"

[ClarkUSA]

This may be one reason why Wall Street "doesn't feel loved" by President Obama:
http://www.google.com/search?client=safari&rls=en&q=wall+street+doesn't+feel+loved&ie=UTF-8&oe=UTF-8

It's easy to see why Wall Street campaign donors have been snubbing President Obama:
http://www.nypost.com/p/news/local/manhattan/wall_street_bigs_kip_glitzy_apple_P9nLXvE0U04bHj7EHPxW1M

And why Goldman Sachs and others from Wall Street have been flocking to Romney:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=433x798833

The government’s biggest financial heavyweights released a long-awaited version of the financial regulation known as the Volcker Rule, which may regulate “high-risk” trading more closely and lead to smaller Wall Street traders’ bonuses... The proposed Volcker rule, named after former Federal Reserve chairman Paul Volcker, is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law in July 2010. The rule prohibits two activities among insured depository institutions — any bank or credit union that is federally insured and accepts deposits, and that includes traditional banks as well as Goldman Sachs, Morgan Stanley, and American Express.

First, it prohibits those financial companies from engaging in “short-term proprietary trading of any security, derivatives and certain other financial instruments” from an entity’s own funds. Second, it “prohibits owning, sponsoring, or having certain relationships with, a hedge fund or private equity fund.”... The Treasury said the rule details whether a nonbank financial company should be subject to “enhanced supervision” to prevent a future financial crisis. In the recent financial crisis, financial distress at certain nonbank financial companies contributed to “a broad seizing up of financial markets,” according to the council.

Under the proposed rule, traders’ bonuses could see a cut if they are paid based on revenue from fees, commissions, bid/ask spreads and not the appreciation or profit from their hedged positions.

Frank Keating, president of the American Bankers Association, said he feared the “complexity” of the rule will require bank employees whose sole jobs are to comply with the rule, further inhibiting “U.S. banks’ ability to serve customers and compete internationally.”

http://abcnews.go.com/blogs/business/2011/10/volcker-rule-unveiled-may-slash-wall-street-bonuses

[Vincardog]

1. Where is the Financial Transaction Tax? I am tired of baby steps

[ClarkUSA]

2. Easy. Why don't you primary Obama, win the general election, and get it passed through Congress?

Anyone calling the Volcker Rule a "baby step" is not cognizant of what it is. Where were you when Bubba repealed Glass-Steagall, a plutocratic wet dream which paved the way for what led to September 2008? I am tired of moving goalposts.

[girl gone mad]

6. If only it were a baby step.

It's already been watered down and loopholed to within an inch of its life. It's likely to be DOA by the time it's actually implemented (2 years from now?).

The new language, contained in a 174-page draft proposal for the rule released to regulators in August and reviewed by The Wall Street Journal, says hedging can cover bank risk on a "portfolio basis," including "the aggregate risk of one or more trading desks." In effect, that opens the door for banks to make all manner of bets on the market, observers said, because a bank might define the risk to its portfolio broadly, such as the risk of a U.S. recession.

If the language is confirmed in the final rule, expected by late October, it would be a victory for Wall Street firms that have lobbied to relax the ban on proprietary trading.

...

An expansive definition of hedging, as outlined in the draft proposal, could open the door for banks to make broad bets on the market, while still defining the bet as a hedge, observers said.

"If you can do portfolio hedging, that gives you a license to do pretty much anything," said Robert Litan, a former Clinton administration official and vice president for research and policy at the centrist Kauffman Foundation, a research group. Mr. Litan said the Volcker rule is misguided in general, because it is difficult to draw a bright line between proprietary trading and hedging.

[ClarkUSA]

7. Link? I don't trust anything written by Rupert Murdoch's "crown jewel" aka. The Wall Street Journal

In my OP quote, Frank Keating sure sounded pissed.

[girl gone mad]

9. Yet you link to the Post? n/t

[ClarkUSA]

10. They weren't analyzing financial policy. I also quoted other sources. Where's your link?

[banned from Kos]

12. your linkee is missing the entire point of the Volcker Rule

"Hedging anything" is fine. Interest rates and broad market moves are perfect examples of good hedging.

The Volcker Rule LIMITS THE AMOUNT of hedging a bank may do as a percentage of tier one capital (3%. Its true that it will take years to fully implement though.

[girl gone mad]

15. You're missing the point of the expert opinion in my link.

Which is that the very definition of what "hedging" is has been fundamentally altered on revision. Originally, the rule stated the hedging was “trades tied to specific bets," but the new proposed definition says that hedging “can cover bank risk on a ‘portfolio basis,’ including ‘the aggregate risk of one or more trading desks."

The only bank that would even be remotely effected by the 3% limit is Goldman, and Goldman is already planning to eliminate its bank holding co. charter so that it will not be subject to the Volcker ruler at all.

[ClarkUSA]

16. You didn't include a link. For the third time, where's the link to your alleged quotes?

[girl gone mad]

17. I did include a link.

You refused to accept the source. The link includes documentation of the revised language as well as interviews with several interested parties. It's a decent piece of reporting, typical of the work which the Journal's news division has historically been held in high esteem for. It was not produced by the editorial department and is not an opinion column.

[ClarkUSA]

25. I just checked all of your replies and there is no link at any of them.

Post the link in your next reply to me.

[girl gone mad]

32. The piece is from the WSJ. It says so right in the article..

and you seemed to understand that, but here's a link:

http://tinyurl.com/3llymvc

[ClarkUSA]

35. Your alleged quote said that but you've yet to furnish a link to an "article". Why the runaround?

The tinyurl you gave me is to a search engine.

Still playing reindeer games? What are you hiding?

Did you make up that "quote" yourself?

[banned from Kos]

18. Didn't miss it, rather, I am in favor of broad (portfolio) hedging

And 3% is 3% for everyone. Some have complained that trading levels won't fall but they miss the point. Their tier 1 capital is healthy now. Let their assets drop and the ratio will go sour and force trading restrictions as designed.

And sure, Goldman may drop its charter but I say good. Then the complaints about favorable Fed treatment for them will have to go away.

[girl gone mad]

19. 3% is meaningless when..

1. Goldman is the sole firm to ever have even come close to this limit, and
2. Goldman will not have to comply with the limit.

For the complaints about favorable treatment to go away, the favorable treatment will first need to go away.

[banned from Kos]

22. You don't want regulation. You want annihilation.

The goal was to get the strongest regulation ever for financial companies.

Goal attained.

[girl gone mad]

24. It's hard to take you seriously in any way..

when you resort to hyperbolic statements such as the three in this single comment.

[ClarkUSA]

26. It's hard to take you seriously when you don't post links to your alleged quotes.

[girl gone mad]

31. What "alleged" quote?

[ClarkUSA]

33. Your original reply to me, where you claimed to quote Rupert Murdoch's Wall Street Journal. Link ->

Reply #6: http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=433&topic_id=799121&mesg_id=799150

Playing reindeer games? It's clear you are.

Where's the link to the alleged quote?

[girl gone mad]

20. In the initial version, it was 3% of tangible common equity..

which actually would have been meaningful. The banks successfully lobbied to have that changed.

[cui bono]

11. "Why don't you run...?" naner naner naner

Wow, that's an intelligent response. Sheesh.

It is a citizen's right to discuss and criticize their government. If you hate that right so much why do you come on this board?

[ClarkUSA]

14. "naner naner naner... Wow, that's an intelligent response."

I couldn't have said it better. :rofl:

[cui bono]

21. Really? You really didn't get that that was showing you what you sounded like?

No, of course you didn't.

[ClarkUSA]

28. You really didn't get the irony of your saying that to me given your schoolyard patter?

No, of course you didn't.

[cui bono]

29. Wow. I'd tell you which 5th grade method you're using now but you'll just think

... oh nevermind... it's past time to go to bed. Not really worth it.

Maybe I'll change my stance on not using the ignore function.

[ClarkUSA]

30. Please do. You seem to have had a lot of practice at this "method".

I always stood up to bullies who picked on me in 5th grade.

[geek tragedy]

3. Waaaah. nt

[banned from Kos]

4. There was never any such thing.

Why do some people like to piss on accomplishments by bringing up irrelevant trivia?

People whine about Glass-Steagall without realizing Dodd-Frank is far more comprehensive.

[young but wise]

5. +1000000

[girl gone mad]

8. That's the problem.

We need a transaction tax, now. This bullshit tinkering around the edges is worse than futile; it's counterproductive.

[banned from Kos]

13. Wrong place for a transaction tax. The purpose of D-F was regulation.

And it would not have passed with such a tax. It needed Scott Brown's vote as it was.

[boppers]

34. I think the point is that "regulation" is easily evaded.

That being said, it's easy to bundle transactions as well, and evade transaction taxes.

[Romulox]

23. LOL! nt

[golfguru]

27. A good move!