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Thread: Elizabeth Warren to Dems: Kill the bill

  1. #331
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    Re: Elizabeth Warren to Dems: Kill the bill

    Quote Originally Posted by Khayembii Communique View Post
    Has anyone explained in this thread yet why this entire thing is political grandstanding over the revocation of a technical and arbitrary rule that has little to no impact on "derivatives trading" and risk allocation in the financial industry? Because this entire thing is pointless politicking. The push out rule is dumb and should be repealed.
    Actually, I already explained that.

    However, good to know that I'm not the only one who sees this.

  2. #332
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    Re: Elizabeth Warren to Dems: Kill the bill

    Quote Originally Posted by Khayembii Communique View Post
    Has anyone explained in this thread yet why this entire thing is political grandstanding over the revocation of a technical and arbitrary rule that has little to no impact on "derivatives trading" and risk allocation in the financial industry? Because this entire thing is pointless politicking. The push out rule is dumb and should be repealed.
    why is it not prudent to have the banks push out their derivative trades to an affiliate so that any losses sustained would not be subject to government assistance in the form of a bailout
    if the financial institution reaps the profits from such trades, why should the taxpayer be subject to absorbing the potential losses resulting from such derivative plays
    we are negotiating about dividing a pizza and in the meantime israel is eating it
    once you're over the hill you begin to pick up speed

  3. #333
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    Re: Elizabeth Warren to Dems: Kill the bill

    Quote Originally Posted by justabubba View Post
    why is it not prudent to have the banks push out their derivative trades to an affiliate so that any losses sustained would not be subject to government assistance in the form of a bailout
    if the financial institution reaps the profits from such trades, why should the taxpayer be subject to absorbing the potential losses resulting from such derivative plays
    Because it doesn't do anything, it requires banks to move client's hedging investments in certain swaps out of bank accounts and into broker dealer accounts, which really does nothing. Sure the bank accounts are FDIC insured and the broker dealer accounts aren't, but there's no scenario where the investment banks go down and the banks don't. Also, these types of derivatives (interest rate swaps, for example) had nothing to do with the financial crisis.

    So there's what it doesn't do. What does it do? Well, for one it basically lumps a bunch of different types of derivatives together and treats them in the same manner, without understanding the risk profile of the very, very different types of swap and forward contracts that it regulates. It increases issues in the banking industry because banks can't easily determine what kind of "risky" derivatives fall under the rule. The market is very complex, and this regulation shows that the SEC doesn't understand that. Finally, the concept of "risk" in certain derivatives isn't uniform. For example, many of the "riskier" swaps are used by companies to hedge, which actually stabilizes the market.

    Why do banks want the push out regulation revoked? Pretty simple. It increase costs and risk for the big banks that don't fully understand how to properly apply the regulation because the SEC themselves don't really know. It makes it more difficult to service these contracts, which aren't inherently risky so that isn't necessarily a good thing like most anti-bankster folks will claim. And so bank costs and difficulty of doing business go up, which translates into a lower level of service for their clients. This isn't a conspiracy to deregulate the financial markets, it's an attempt to revoke a very confusing and ignorant law that doesn't really do anything except make it tougher for banks to do business.
    "I do not claim that every incident in the history of empire can be explained in directly economic terms. Economic interests are filtered through a political process, policies are implemented by a complex state apparatus, and the whole system generates its own momentum."

  4. #334
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    Re: Elizabeth Warren to Dems: Kill the bill

    Quote Originally Posted by Khayembii Communique View Post
    Because it doesn't do anything, it requires banks to move client's hedging investments in certain swaps out of bank accounts and into broker dealer accounts, which really does nothing. Sure the bank accounts are FDIC insured and the broker dealer accounts aren't, but there's no scenario where the investment banks go down and the banks don't. Also, these types of derivatives (interest rate swaps, for example) had nothing to do with the financial crisis.

    So there's what it doesn't do. What does it do? Well, for one it basically lumps a bunch of different types of derivatives together and treats them in the same manner, without understanding the risk profile of the very, very different types of swap and forward contracts that it regulates. It increases issues in the banking industry because banks can't easily determine what kind of "risky" derivatives fall under the rule. The market is very complex, and this regulation shows that the SEC doesn't understand that. Finally, the concept of "risk" in certain derivatives isn't uniform. For example, many of the "riskier" swaps are used by companies to hedge, which actually stabilizes the market.

    Why do banks want the push out regulation revoked? Pretty simple. It increase costs and risk for the big banks that don't fully understand how to properly apply the regulation because the SEC themselves don't really know. It makes it more difficult to service these contracts, which aren't inherently risky so that isn't necessarily a good thing like most anti-bankster folks will claim. And so bank costs and difficulty of doing business go up, which translates into a lower level of service for their clients. This isn't a conspiracy to deregulate the financial markets, it's an attempt to revoke a very confusing and ignorant law that doesn't really do anything except make it tougher for banks to do business.
    You forgot to mention that it makes zero sense to actually prohibit something that is widely available in other nations. It deters competition in global financial markets, something that the US can't afford.

    But basically everything that you have just said.

  5. #335
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    Re: Elizabeth Warren to Dems: Kill the bill

    Quote Originally Posted by justabubba View Post
    why is it not prudent to have the banks push out their derivative trades to an affiliate so that any losses sustained would not be subject to government assistance in the form of a bailout
    if the financial institution reaps the profits from such trades, why should the taxpayer be subject to absorbing the potential losses resulting from such derivative plays
    You people had NO problem with the 5 Trillion bailout l of the two biggest players in the run up to the Subprime mortgage crisis.

    Neither does that Hack Warren. ( which is WHY she's a unmitigated hack )

    TARP was repaid, Fannie and Freddies debt is sitting on the Books of the Fed and the Treasury.

    Yours and Warrens selective outrage is a bit hypocritical.

  6. #336
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    Re: Elizabeth Warren to Dems: Kill the bill

    Quote Originally Posted by Fenton View Post
    You people had NO problem with the 5 Trillion bailout l of the two biggest players in the run up to the Subprime mortgage crisis.

    Neither does that Hack Warren. ( which is WHY she's a unmitigated hack )

    TARP was repaid, Fannie and Freddies debt is sitting on the Books of the Fed and the Treasury.

    Yours and Warrens selective outrage is a bit hypocritical.
    nowhere did i see you answer the question i posed
    here it is
    have another whack at it ... only this time, try to respond to the actual question:
    why is it not prudent to have the banks push out their derivative trades to an affiliate so that any losses sustained would not be subject to government assistance in the form of a bailout
    if the financial institution reaps the profits from such trades, why should the taxpayer be subject to absorbing the potential losses resulting from such derivative plays
    we are negotiating about dividing a pizza and in the meantime israel is eating it
    once you're over the hill you begin to pick up speed

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