Friday, January 22, 2010

Time for Action

UK considers Obama-style banking revolution

US officials will fly to London next week to discuss with ministers how sweeping changes to the banking system outlined by President Barack Obama to fight Wall Street's excesses might be implemented in the City. Top Wall Street banks are to face tough limits on their size and will be ordered to dismantle lucrative chunks of their business after Obama responded to a series of political setbacks by turning his fire on a "binge of irresponsibility" by financiers. "Never again will American taxpayers be held hostage by a bank that is too big to fail," said Obama, who framed his plans in aggressive terms and accused banks of deploying an "army of lobbyists" to block reforms. "If these folks want a fight, it's a fight I'm ready to have."

Posted by devo @ 07:01 AM (1524 views)
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25 thoughts on “Time for Action

  • The bailouts make reform necessary, because they have completely distorted the market. But, had these wreakless banks gone bankrupt, as they should have, if justice existed, no regulation will have been required, because the free market will have done the job already. However, the politicians who allowed the scam would have to go also. Can that explain part of the zeal behind the bailout?!

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  • Ayn Rand had a word to say about Justice and those who pander to the guilty in her book. In this passage, consider Robin Hood as the government, and the needy as the bankers who would have gone bankrupt without being bailed out with our money Atlas Shrugged:

    I’ve chosen a special mission of my own. I’m after a man whom I want to destroy. He died many centuries ago, but until the last trace of him is wiped out of men’s minds, we will not have a decent world to live in.”

    “What man?”

    “Robin Hood.”

    Rearden looked at him blankly, not understanding.

    “He was the man who robbed the rich and gave to the poor. Well, I’m the man who robs the poor and gives to the rich—or, to be exact, the man who robs the thieving poor and gives back to the productive rich.” “What in blazes do you mean?”

    It is said that he fought against the looting rulers and returned the loot to those who had been robbed, but that is not the meaning of the legend which has survived. He is remembered, not as a champion of property, but as a champion of need, not as a defender of the robbed, but as a provider of the poor. He is held to be the first man who assumed a halo of virtue by practicing charity with wealth which he did not own, by giving away goods which he had not produced, by making others pay for the luxury of his pity.

    He is the man who became the symbol of the idea that need, not achievement, is the source of rights, that we don’t have to produce, only to want, that the earned does not belong to us, but the unearned does. He became a justification for every mediocrity who, unable to make his own living, has demanded the power to dispose of the property of his betters, by proclaiming his willingness to devote his life to his inferiors at the price of robbing his superiors. It is this foulest of creatures—the double-parasite who lives on the sores, of the poor and the blood of the rich—whom men have come to regard as a moral ideal. And this has brought us to a world where the more a man produces, the closer he comes to the loss of all his rights, until, if his ability is great enough, he becomes a rightless creature delivered as prey to any claimant—while in order to be placed above rights, above principles, above morality, placed where anything is permitted
    to him, even plunder and murder, all a man has to do is to be in need.

    Do you wonder why the world is collapsing around us? That is what I am fighting, Mr. Rearden. Until men learn that of all human symbols, Robin Hood is the most immoral and the most contemptible, there will be no justice on eaway for mankind to survive.”

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  • She also said that those who feel sorry for people like bankers, who suffer from their own willing immorality, are incapable of valuing the true human virtues of an innocent, honest individual. Any amount of sorrow one feels for the plight of fraudulent bankers takes away ones ability to admire the honest small business owner. Any actions to help the fraudulent steals property from the unfraudulent, so the pity itself is a fraud.

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  • “Any amount of sorrow one feels for the plight of fraudulent bankers”

    Who the hell feels any sorrow for those thieving barstewards?

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  • cat and canary says:

    MG, good point. What did the FSA say? Because they are now claiming that Obama’s plans are in-line with theirs…

    Gordon Brown should have plenty of financial backing now. No problems with the Labour party campaign funding anymore.

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  • What’s the view of regulars on here? I for one would be in favour of splitting the banks.

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  • Timmy, if you got rid of the bailouts (and I’m including a decade of artificially low interest rates), bankruptcy would have split up the banks years ago!! Of course, lets have bailouts, but let them be in accordance with bankruptcy law. If government split them up, the businesses are distributed amongst vested interests. This is crony capitalism, not the free market.

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  • freemanphil – I agree with you but we are where we are. But I’m not sure what your preference is in terms of splitting/remaining as is.

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  • mountain goat says:

    Timmy t

    Speculative investing with tax payer guarantees to cover crippling losses should not happen again.

    Whether splitting the banks is the best way to achieve this I am less sure or undecided.

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  • Timmy, I am against the government splitting and re-distributing businesses. You would have opportunity to buy stocks in the smaller companies in a lawful bankruptcy, but, the new businesses will be doled out amongst the bankers behind the crisis if we let politicians do the job.

    No, what we must do is end the bailouts and let the firms go through lawful bankruptcy courts. Get government out of the way.

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  • Timmy, I am against the government splitting and re-distributing businesses. You would have opportunity to buy stocks in the smaller companies in a lawful bankruptcy, but, the new businesses will be doled out amongst the bankers behind the crisis if we let politicians do the job.

    No, what we must do is end the bailouts and let the firms go through lawful bankruptcy courts. Get government out of the way.

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  • MG – No government would let the public lose their savings, so either banks cannot invest them, or the government (tax payer) must guarantee them. As I think the whole world would agree with you that bailouts can’t happen again, that only leaves banks not being able to invest them. I think the best way to ensure this happens is to physically break them up – although this may be because I simply wouldn’t trust banks to be self-regulating.

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  • freemanphil – agree entirely philosophically but it will never happen with the public’s deposits at risk.

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  • Timmy, there is such thing as the moral law. Would the people prefer hyperinflation and unemployment? You can’t have it all.

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  • cat and canary says:

    share price of barclays, JP morgan, bank of america, RBS, deutsche etc etc. all down

    ..so im for splitting them up.

    if they really do that much for society and global business, now they can prove it.

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  • [email protected] “No government would let the public lose their savings”

    Are you sure?

    As I see it, that’s already happening by stealth, i.e. higher inflation with rock bottom interest rates.

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  • [email protected] “No government would let the public lose their savings”

    That’s already happening as I see it: Rising inflation with rock bottom interest rates.

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  • C&C… exactly! Share price down because splitting them up is bad for them. Held together, they make bumper profits in the good times and get bailed out when it goes bad. Broken up, the playing field is much more level.

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  • Mr g – very valid point although most of the population are far too busy reading OK magazine to realise.

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  • “share price of barclays, JP morgan, bank of america, RBS, deutsche etc etc. all down”
    – Yes, and they are vulnerable to hostile takeovers, from companies would could then afford to turn the businesses around, but, those responsible for the crisis, in bed with government would get a hair cut. Government is stepping in to stop this from happening to their friends, in the revolving door that is the City of London and Westminster.

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  • freemanphil – weird they have taken down your Schiff posting! Just as i tried to repost about S&Ls etc. – must be because you did some youtube embedding. Sometimes we are too clever for our on good!!!

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  • cat and canary says:

    ….”those responsible for the crisis, in bed with government would get a hair cut. Government is stepping in to stop this from happening to their friends, in the revolving door that is the City of London and Westminster.”

    …yep, where are you Alastair Darling?

    Gordon?

    Not a peep, not even 24 hours after Obama administration wiped 10’s billions of global stocks.

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  • Thats because Gordon is a moron!

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  • 22. cat and canary said…

    Not a peep, not even 24 hours after Obama administration wiped 10’s billions of global stocks.

    10’s billions off global stock……, that are bubbling up for no good economic or market reasons.

    Pass Go and collect a zillion

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