$15 Minimum Wage Battle Moves To Other Industries

[GG]

 

Because reality is subordinate to making people feel good about themselves. [/Critical Theory]

Which encapsulates every single progressive platform

[GoBills808]

Which encapsulates every single progressive platform

I'll say MANY if not the majority of progressive platforms are guilty of being bleeding heart liberal feel-good circle jerks but there are a few that are worthwhile, financial sector reform being my main contention.

[GG]

... but there are a few that are worthwhile, financial sector reform being my main contention.

 

 

Such as what?

 

This should be fun.

[GoBills808]

I think amending the Volcker rule to something like 1% of Tier1 capital would be a good start, limiting the incest between private sector and government positions by increasing the length of time for appointees in cabinet positions, and strengthening the training for regulators would be a good start.

 

Oh, and reinstate Glass-Steagall as originally constructed, of course.

[GG]

I think amending the Volcker rule to something like 1% of Tier1 capital would be a good start, limiting the incest between private sector and government positions by increasing the length of time for appointees in cabinet positions, and strengthening the training for regulators would be a good start.

 

Oh, and reinstate Glass-Steagall as originally constructed, of course.

 

How is 1% of Tier 1 capital going to insure safety of the financial system?

 

What kind of additional training would regulators benefit from?

 

How did the end of Glass Steagall contribute to the financial debacle?

[GoBills808]

 

How is 1% of Tier 1 capital going to insure safety of the financial system?

 

What kind of additional training would regulators benefit from?

 

How did the end of Glass Steagall contribute to the financial debacle?

1: it limits the damage speculation on investments like derivatives can do to the working capital of the institution, which insulates shareholders and investors from risky trading. I'm not actually firm on 1%, we need to get my guy Foxx in here to break down exactly what percentages provide the best protection.

 

2: being able to understand the derivative market. It's the #1 area of concern IMO where oversight is most needed.

 

3: I was just joking to see if you'd bite. But you have to admit, a hard split between commercial and investment banking would have solved a lot of the liquidity issues that contributed to the recession. Wouldn't have solved everything, obviously. And I forgot one: Give the OCR some real teeth beyond what Dodd-Frank says to hold the credit rating agencies liable.

[GG]

1: it limits the damage speculation on investments like derivatives can do to the working capital of the institution, which insulates shareholders and investors from risky trading. I'm not actually firm on 1%, we need to get my guy Foxx in here to break down exactly what percentages provide the best protection.

 

2: being able to understand the derivative market. It's the #1 area of concern IMO where oversight is most needed.

 

3: I was just joking to see if you'd bite. But you have to admit, a hard split between commercial and investment banking would have solved a lot of the liquidity issues that contributed to the recession. Wouldn't have solved everything, obviously. And I forgot one: Give the OCR some real teeth beyond what Dodd-Frank says to hold the credit rating agencies liable.

 

Exactly which derivatives are you referring to?

[GoBills808]

 

Exactly which derivatives are you referring to?

I think the concept of futures and options are pretty straightforward, but CDOs and credit default swaps to name two should be subject to much greater scrutiny IMO. It's an introduction of greater risk into a market that is supposed to be a buffer against hedging, which is completely backwards.

[GG]

I think the concept of futures and options are pretty straightforward, but CDOs and credit default swaps to name two should be subject to much greater scrutiny IMO. It's an introduction of greater risk into a market that is supposed to be a buffer against hedging, which is completely backwards.

 

 

CDO is not the same thing as CDS, and not quite a derivative. But I understand how acronyms can confuse the uninformed.

[GoBills808]

 

 

CDO is not the same thing as CDS, and not quite a derivative. But I understand how acronyms can confuse the uninformed.

Yes, CDOs and credit default swaps are two different things, which is why I said 'to name two'. And they absolutely are derivatives.

 

And TBH answering questions in good faith until the other guy runs out of ideas and resorts to name calling is tedious. Especially when the other guy's wrong. Because you are. I'm perfectly willing to continue, but relax on the 'uninformed'...I'm not an expert by any means but by your last post neither are you.

[GG]

Yes, CDOs and credit default swaps are two different things, which is why I said 'to name two'. And they absolutely are derivatives.

 

And TBH answering questions in good faith until the other guy runs out of ideas and resorts to name calling is tedious. Especially when the other guy's wrong. Because you are. I'm perfectly willing to continue, but relax on the 'uninformed'...I'm not an expert by any means but by your last post neither are you.

 

CDOs are not considered derivatives by anyone but the uninformed who get their financial knowledge from Elizabeth Warren.

 

How did CDOs affect the financial players working capital?

[GoBills808]

Because they started mixing the good with the high risk and still selling them as triple A. When these go belly up the bank is left holding the bag of a bunch of worthless ABS based largely on subprime loans in the lead up to the mortgage crisis for example. So they doubled down and repackaged them, or sold swaps for insurance, so they could continue showing volume of trades for fees. Once the CDO gets downgraded you've got liquidity issues because you've got big losses on the books and interbank lending dries up, at which point capital is effected.

[GG]

Because they started mixing the good with the high risk and still selling them as triple A. When these go belly up the bank is left holding the bag of a bunch of worthless ABS based largely on subprime loans in the lead up to the mortgage crisis for example. So they doubled down and repackaged them, or sold swaps for insurance, so they could continue showing volume of trades for fees. Once the CDO gets downgraded you've got liquidity issues because you've got big losses on the books and interbank lending dries up, at which point capital is effected.

 

Not quite what happened, but lets say it did. How would have your proposals eliminated the crisis?

[GoBills808]

 

Not quite what happened, but lets say it did. How would have your proposals eliminated the crisis?

Maybe not exactly, but I'd say it's pretty close....the first proposal would have limited the volume of the affected markets, which may (again, the percentages are speculative) have softened the subprime collapse. I think the third would have prevented mis-rating a CDO comprised of subprime tranches, as happened to upwards of 80% of the time before 2008 IIRC. The second is just common sense.

[/dev/null]

 

How is 1% of Tier 1 capital going to insure safety of the financial system?

 

Think like a Progressive:

Problem = need for Government

Need for Government = need to pay for program

Need to pay for program = new tax

 

But when the government intervention fails to solve the problem, it is not because the government intervention failed it is because the government did not intervene enough

[GG]

Maybe not exactly, but I'd say it's pretty close....the first proposal would have limited the volume of the affected markets, which may (again, the percentages are speculative) have softened the subprime collapse. I think the third would have prevented mis-rating a CDO comprised of subprime tranches, as happened to upwards of 80% of the time before 2008 IIRC. The second is just common sense.

You honestly believe that the rating agencies would have assigned different ratings if they were regulated?

 

Hint, a big reason for the real estate run up were regulations and NGOs.

[DC Tom]

You honestly believe that the rating agencies would have assigned different ratings if they were regulated?

 

In the spirit of Clarke's Third Law, I give you DC Tom's Second Law:

 

All proposed regulation, sufficiently liberal, is indistinguishable from voodoo.

[GoBills808]

You honestly believe that the rating agencies would have assigned different ratings if they were regulated?

 

Hint, a big reason for the real estate run up were regulations and NGOs.

A big reason for the bubble was a lot of things, including deregulations like GLB and the institution of adjustable rate mortgages. And absolutely, government programs promoting affordable housing certainly contributed, the FMs definitely, the list goes on and on.

 

And yes, to answer your question. Let me pose you one in return: do you consider the finance industry capable of self policing?

[GG]

A big reason for the bubble was a lot of things, including deregulations like GLB and the institution of adjustable rate mortgages. And absolutely, government programs promoting affordable housing certainly contributed, the FMs definitely, the list goes on and on.

 

And yes, to answer your question. Let me pose you one in return: do you consider the finance industry capable of self policing?

 

Of course the industry is capable of self policing. The real question is what do you want the financial sector to do in an economy? Do you want it to be a utility taking deposits and making loans, or do you want it to be the engine behind real economic growth?

 

Read Dimon's diatribe from last week to get a better clue.

[Chef Jim]

A big reason for the bubble was a lot of things, including deregulations like GLB and the institution of adjustable rate mortgages. And absolutely, government programs promoting affordable housing certainly contributed, the FMs definitely, the list goes on and on.

 

And yes, to answer your question. Let me pose you one in return: do you consider the finance industry capable of self policing?

It already does. It's called FINRA. But for some reason the Obama administration got the oblivious DOL involved and it has really !@#$ed things up.