Quote:
Originally Posted by Boss
The Trump administration has been weakening Dodd-Frank all along.
Each "tweak" weakens the banking regulation's which stabilized our economy.
That is the GOP way.
Today we have a guy in the WH who knows debt and bankruptcy.
It is showing as debt is forcing treasury to create more bonds of different length's. The credit crisis, which started in late 2019, is part of the damage Trump has done to our economy. That crisis created QE 4 when the Fed. went into the over night markets in Nov. 2019.
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I was looking for an explanation of what these specific measures would do, what practices they would allow the banks to now engage in. and thus, a discussion of whether they were reasonable or unreasonable.
Financial deregulation allowed Banks to enter into financial instruments which they had no business doing. We found out in 2008. I would suggest that ....
"Too big to fail" be completely stricken as a solution. It's anti-capitalist, and it allows/allowed Banks to undergo risks which are outside what function "Banks" are supposed to serve.
Banks shouldn't be involved in financial Credit Default Swaps. The credit markets failed because bad mortgages were made, the risks fraudulently hidden, and the financial instruments that were many multiples of the actual mortgages (ie, "bets") were NOT insured as they were claimed to be.
The Banks and "the rich" all have knowledge at their fingertips to mitigate or at least balance risk, if they choose to.
There are 2 ways to gamble:
1. Bookies try and get equal money betting on a game - those in favor of an outcome, and those who believe the opposite. And if they're right, then the Bookie earns 10% at no risk (except collection I suppose).
2. Insurance - the odds of something occurring are run through an actuarial table and the risk is taken off the insured's obligations. Your $1MM, 20 year term life insurance neither COSTS you $1MM in premiums over 20 years, nor dos the insurance company pay out $1MM on every policy.
In the CD markets, neither of the above happened. Thus, it was your classic house of cards, or perhaps more accurately, Ponzi scheme.
You'll note I never mentioned any party. It's not a partisan issue, and thus no need for you to make it so. When the pendulum swings, it always swings way to the other side. There are many measures in D-F that went too far, and so they get adjusted.
Is this one that got adjusted, or is it something that shouldn't be done?
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