Would you support "real" financial reform?

[donheff]

The Dodd Bill is moving along like health care reform, crippled in the view of the progressives and the right. But what would real financial reform look like? And how would it effect aging retirees like us? Unlike the health care bill, I suspect real financial reform would scare the heck out of Wall Street punching another hole in our portfolios. Would transparency and effective oversight have beneficial results in time to help us out? Or are we (from a purely self interested point of view) better off letting the Street keep gambling with our futures until we can quietly move on to our final rewards?

 

[FinanceDude]

Trusting Dodd to do good reform is like the fox guarding the hen house. Look at his affiliations with Countrywide Mortgage and Fannie Mae and Freddie Mac. Can't we get someone with at least some moral fiber to run with this?

 

[ChrisC]

Trusting Dodd to do good reform is like the fox guarding the hen house. Look at his affiliations with Countrywide Mortgage and Fannie Mae and Freddie Mac. Can't we get someone with at least some moral fiber to run with this?

Barney Frank, where are you?

 

[FinanceDude]

Frank and Dodd are somewhere toasting themselves on all the good they've done..................

 

[Gone4Good]

It has to start with regulating leverage in the financial system. After that the other stuff is easy.

 

[ChrisC]

It has to start with regulating leverage in the financial system. After that the other stuff is easy.

I thought the invisible hand took care of that!

 

[youbet]

But what would real financial reform look like?

We would each receive according to our needs and contribute according to our abilities. Our shared values and common worship of our secular "leader" would serve as motivation enough to consume fairly and contribute eagerly. No greedy capitalistic drivers needed.

 

[youbet]

Can't we get someone with at least some moral fiber to run with this?

Well, we'd have to find someone and elect them. There's no one there now that fits that description.

 

[FinanceDude]

Well, we'd have to find someone and elect them. There's no one there now that fits that description.

Maybe if Paul Ryan could get in as a Senator.........

 

[Nodak]

I don't think there is such a thing as a politician with integrity.

 

[M Paquette]

I thought the invisible hand took care of that!

Goldman Sachs?

 

[Gone4Good]

I thought the invisible hand took care of that!

That worked well, didn't it?

 

[ChrisC]

That worked well, didn't it?

Especially, if you're like Goldman and play both sides.

 

[unclemick]

Jack Bogle and or Warren Buffett. In my mind all others are suspect.

Until I hear of their personal experiences with:

'The Red Bead Experiment.'

heh heh heh -

 

[ERD50]

I thought the invisible hand took care of that!

And maybe it would if we let it.

-ERD50

 

[ChrisC]

And maybe it would if we let it.

-ERD50

Nah, it can never smackdown the snake oil salesman.

 

[Gone4Good]

Pre-1933, little financial regulation . . . banking crisis
1933-mid-1970's, heavy financial regulation . . .no banking crises
mid-1970's-present - financial deregulation . . . two banking crises

 

[Tesaje]

Pre-1933, little financial regulation . . . banking crisis
1933-mid-1970's, heavy financial regulation . . .no banking crises
mid-1970's-present - financial deregulation . . . two banking crises

Not to mention the regulated period had the longest strongest economic period in history with the largest increase of the middle class.

Regulation is needed to level the playing field. Go too far and it is bad. Too little and you robber barons and a knee jerk reaction against them.

Without the big middle class bubble, who's going to buy the goods?

 

[billin]

My personal take on banking crises is that they appear when too much credit is extended. Government is holding interest rates down which by itself will do this but when you add the NINJA loans and so forth.......

 

[Westernskies]

The Dodd Bill is moving along like health care reform, crippled in the view of the progressives and the right. But what would real financial reform look like? And how would it effect aging retirees like us? Unlike the health care bill, I suspect real financial reform would scare the heck out of Wall Street punching another hole in our portfolios. Would transparency and effective oversight have beneficial results in time to help us out? Or are we (from a purely self interested point of view) better off letting the Street keep gambling with our futures until we can quietly move on to our final rewards?

Looks like you have already pre-assigned the blame if the Dodd Bill doesn't pass... (the content of the bill and the public will notwithstanding)

Transparency begins at home.

Hide your money under your mattress. Read the prospectus. Investing involves risk- you can't have it both ways. Stay away from the Street if you don't like the risk, but don't expect the returns.

I agree with you on effective oversight. Let's start with public officials who don't pay their taxes.

 

[donheff]

Looks like you have already pre-assigned the blame if the Dodd Bill doesn't pass... (the content of the bill and the public will notwithstanding)

Transparency begins at home.

Hide your money under your mattress. Read the prospectus. Investing involves risk- you can't have it both ways. Stay away from the Street if you don't like the risk, but don't expect the returns.

I agree with you on effective oversight. Let's start with public officials who don't pay their taxes.

I'm not sure what you are saying or assuming I was saying. My personal opinion is that transparency and effective oversight of the financial industry are important to our future. I am willing to put my money where my mouth is and take a hit in my pocketbook if that is what it takes to get reform. At the same time, I acknowledge that I am not sure what effective reform should be. Thus I asked two questions I am actually interested in hearing about: 1) what does real reform look like?; and 2) if we get it will it spook the Street enough to punch a big hole in our portfolios? The final note asking whether it is in our interests to let Wall Street to continue with their shenanigans while we whistle our way to our graves was tongue-in-cheek.

 

[FinanceDude]

Not to mention the regulated period had the longest strongest economic period in history with the largest increase of the middle class.

Really? The aftermath of the Depression lasted until we go involved in World War II. That finally cranked up GDP and production in the name of the war effort. National pride in USA made goods ran rampant, it was thought patriotic to buy US good, not "junk" from Japan and China......

After the war, the govt offered very low interest loans to vets, and a housing and baby boom followed. Companies grew and hire workers, offering good wages and the promise of nice pensions and the promise of long term employment to workers. With all that in place, it was almost a foregone conclusion the explosion of the middle class.

How much of that was the result of regulation? I am not sure, but it seemed there were other economic factors that contributed more.......

 

[ERD50]

re: the 'invisible hand'

That worked well, didn't it?

And maybe it would if we let it.

-ERD50

Nah, it can never smackdown the snake oil salesman.

You are correct (or at least I agree with you, maybe we are both wrong ).

Trouble is, the regulators can't smack down the snake-oil salesmen either. Where was the SEC with Bernie Madoff? Why didn't Tim Geitner get audited by the IRS? and on and on....

The snake oil salesmen (and women) can move 1000x faster than those hundreds of people in Congress. The (largest part of) answer is transparency and education.

Why did so many people on this forum express shock at all those who were taken by Madoff? Simple, we are educated enough in basic financial matters to know the warning signs, we would look for more transparency, etc.

Don't get me wrong, I think that some forms of regulation are a good thing and I welcome them. But I really want to see them focus on education and transparency. I just love that old quote - "You can't cheat an honest man." Nah, it's not 100% true, but there is a lot of truth to it.

-ERD50

 

[Westernskies]

I'm not sure what you are saying or assuming I was saying.

Originally Posted by donheff
The Dodd Bill is moving along like health care reform, crippled in the view of the progressives and the right.

My personal opinion is that transparency and effective oversight of the financial industry are important to our future.

I agree. We've heard a lot of talk about "transparency" recently. Just that, talk. And effective oversight is too much to expect from officials who require oversight just to pay their own taxes, IMO.

I am willing to put my money where my mouth is and take a hit in my pocketbook if that is what it takes to get reform.

Great, write a check to the US Treasury if that makes you feel better- I believe we are already being taxed for government services for which we are not receiving value commensurate to what we pay.

At the same time, I acknowledge that I am not sure what effective reform should be.

I agree with you on this point.

Thus I asked two questions I am actually interested in hearing about: 1) what does real reform look like?; and 2) if we get it will it spook the Street enough to punch a big hole in our portfolios?

1. I would start with : Succesful reform is when Americans can trust Wall Street, and more importantly those whom we elect and or appoint to oversee it- in equal measures. Not sure how you can quantify that, though. Investor confidence? Failures? Bailouts? Indictments?

2. Wall Street is understandably skittish about more government intervention and the Dow drops a hundred points every time an administration official speaks. There has to be mutual trust. Don't see that happening anytime soon.

The final note asking whether it is in our interests to let Wall Street to continue with their shenanigans while we whistle our way to our graves was tongue-in-cheek.

As was my answer...

 

[Keim]

I don't think there is such a thing as a politician with integrity.

Sure there is: The one that stays bought once they've been paid off.