Could it be because he seems to have no concept of fighting for principle? Because he has some exaggerated idea of his abilities, some need to be "cool" at all times?
This is no longer a simple little job he has. He is, for better or worse, OUR President. The way our government runs these days, if he does not show some leadership -- nothing gets done.
Congress has become useless. They are so accustomed to being a partisan rubberstamp they have forgotten how to LEGISLATE for anything more than their district or state. Totally useless.
This from Bloomberg:
"
By Nicholas Johnston and Julianna Goldman
Jan. 21 (Bloomberg) -- President Barack Obama, tapping into voter anger over bank bailouts, called for limiting the size and trading activities of financial institutions as a way to reduce risk-taking and prevent another financial crisis.
The proposals, to be added to an overhaul of regulations being considered by Congress, would prohibit banks from running proprietary trading operations solely for their own profit and sponsoring hedge funds and private equity funds. He also proposes expanding a 10 percent market-share cap on deposits to include other liabilities such as non-deposit funding to restrict growth and consolidation.
“While the financial system is far stronger today than it was one year ago, it’s still operating under the same rules that led to its near collapse,” Obama said at the White House after meeting with former Federal Reserve Chairman Paul Volcker, who has been an advocate of taking such steps. “Never again will the American taxpayer be held hostage by a bank that is too big to fail.”
The proposals could affect trading at some of the nation’s largest banks, including New York-based Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co., said Frederic Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon. Banks conduct proprietary trading for their own benefit, not for that of their clients.
JPMorgan, Morgan Stanley and Bank of America Corp. tumbled more than 5 percent in New York trading, leading the S&P 500 Financials Index down as much as 3.3 percent, its biggest decline since October. Goldman and Citigroup Inc. dropped more than 4 percent.
Congressional Approval
The plan is subject to approval by Congress, where the president’s earlier regulatory proposal has hit resistance from some lawmakers and opposition from financial firms. Financial industry executives, lobbyists and analysts were critical of the proposal.
Obama’s proposals are “arbitrary restrictions on growth and activities” of banks, the chief executive officer of Wall Street’s main lobbying group said in a statement today.
Tim Ryan, CEO of the Securities Industry and Financial Markets Association, said the group supports “strengthened regulatory oversight, and flexibility like that originally proposed by the administration.”
Obama anticipated that reaction in his remarks.
“If these folks want a fight, it’s a fight I’m ready to have,” he said.
Election Concerns
Voter concerns about the struggling economy, taxpayer bailouts and growing bank profits at a time of 10 percent unemployment, as well as a federal deficit that rose to $1.4 trillion last year, will figure in congressional elections in November. A Bloomberg National Poll taken Dec. 3-7 showed almost two-thirds of Americans say the government’s bank rescue was a bad idea.
The elections will determine whether Obama’s Democratic Party can sustain majorities in the House and Senate. Democratic candidates suffered defeats in gubernatorial races in Virginia and New Jersey last November and this week lost the U.S. Senate seat in Massachusetts that had been held been held by the late Edward Kennedy, a Democrat, for more than four decades.
Obama said he wants to “strengthen capability and liquidity requirements to make the system more stable.”
More Oversight
The new rules, Obama said, would close loopholes that allow big financial firms to trade products like credit-default swaps and other derivatives without oversight and while benefiting from Federal Reserve lending programs and taxpayer insurance of consumer deposits.
“When banks benefit from the safety net that taxpayers provide,” Obama said, “it is not appropriate for them to turn around and use that cheap money to trade for profit.”
Additionally, Obama said caps on deposits that prevent too much risk from being concentrated in a single bank will be applied to other types of funding to prevent firms from growing too large.
“The American people will not be served by a financial system that comprises just a few massive firms,” Obama said.
Glass-Steagall
David Viniar, Goldman’s chief financial officer, called the proposals “impractical” and said they harken back to the Depression-area Glass-Steagall Act. That law, repealed in 1999, required the separation of institutions involved in capital markets from those engaged primarily in traditional consumer banking.
“You have global institutions around the world who are set up in a certain way and to put rules in place that roll back the financial system by 10 years I think is going to be a very, very hard thing to do,” he said in a conference call with reporters.
Austan Goolsbee, a senior economic adviser to Obama, said the rules wouldn’t amount to a return of Glass-Steagall restrictions. They’re intended to restrain banks from investing with money backed by taxpayer funds, he said at a briefing.
David Nason, managing director of Promontory Financial Group, a financial-services consulting firm in Washington, said separating proprietary trading and private equity activities “will be very difficult to implement.”
“It’s one of those things that’s very easy to say, hard to do,” Nason said in a Bloomberg Television interview. “We’re in the third inning and we’ve got a lot of innings to go to see if this actually happens.”
Safer Investments
Jim Vogel, an interest rate strategist for FTN Financial in Memphis, Tennessee, said Obama’s comments caused bond investors to gravitate more toward safer investments like U.S. Treasury’s and government-backed mortgage bonds. The cost of credit default swaps on several major U.S. banks, which insure against failure, also rose sharply following Obama’s comments, he said.
“If this proposal freezes or reduces the banks’ ability or willingness to invest, other investors will pull back until other asset managers step in to take up the slack,” he said.
The proposals announced by Obama today are in addition the overhaul of U.S. financial regulations that the administration proposed in June to fix lapses in oversight and excessive risk- taking that helped push the economy into a prolonged recession.
Last week the president also announced a plan to impose a fee on as many as 50 financial companies to recover losses from the federal government’s Troubled Asset Relief Program.
To contact the reporters on this story: Nicholas Johnston in Washington at njohnston3@bloomberg.net; Julianna Goldman in Washington at jgoldman6@bloomberg.net
Last Updated: January 21, 2010 13:42 EST
No comments:
Post a Comment