Occupy Wall Street

[Jamie_B]

[quote name='Homer_Rice' timestamp='1342703922' post='1139597']
[url="http://chronicle.com/article/article-content/132813/"]What's happened to intellectual life on the right?[/url]
[/quote]

They've been replaced with folksy governors that say things that make thinking people cringe.

Which honestly is sad, because we could use thinkers no matter the party, because God knows we need to have someone taking Obama to task on real issues, not this OMG SOCIALISM bullshit.

[Jamie_B]

[left]
[size=4] Elizabeth Warren can do no wrong in my eyes.[/size]



[b] [url="http://www.washingtonpost.com/opinions/elizabeth-warren-libor-fraud-exposes-a-rotten-financial-system/2012/07/19/gJQAvDnDwW_story.html"]http://www.washingto...nDwW_story.html[/url][/b]

[b] [quote][/b][/left]



[left]

[color=#000000][font=arial][size=2][b] [size=4]Libor fraud exposes Wall Street’s rotten core[/size][/b]



[size=4][b] By [color=#666666]Elizabeth Warren[/color], [color=#6E6E6E]Thursday, July 19, [color=#CC131E]2:58 PM[/color][/color][/b][/size][/size][/font][/color][/left]

[left]

[size=4][color=#000000][font=arial]
[font=Georgia]

[font=Georgia, serif][i]Elizabeth Warren chaired the TARP Congressional Oversight Panel from 2008 to 2010. She is the Democratic nominee for a U.S. Senate seat in Massachusetts.[/i][/font] [/font]
[font=Georgia, serif]The Libor scandal is more than just the latest financial deception to come to light. It exposes a fraud that runs to the heart of our financial system.[/font]
[font=Georgia, serif]The London interbank offered rate is a benchmark for a range of interest rates, and the misdeeds making headlines have to do with how those rates are set. If insiders can manipulate the basic measurement of a loan — the interest rate — there is rot at the core of the financial system.[/font][/font][/color][/size][/left]


[left][color=#000000][font=Georgia, serif][size=1][size=4]The British financial giant [url="http://www.fbi.gov/washingtondc/press-releases/2012/barclays-bank-plc-admits-misconduct-related-to-submissions-for-the-london-interbank-offered-rate-and-the-euro-interbank-offered-rate-and-agrees-to-pay-160-million-penalty"]Barclays has admitted to manipulating the rate[/url] from 2005 to [url="http://www.fsa.gov.uk/static/pubs/final/barclays-jun12.pdf"]at least 2009[/url]. When the bank made a bet on the direction in which interest rates would turn, the Barclays employees who submit data for calculating interest rates would fake their numbers to help Barclays traders win the bet. Day after day, year after year, bet after bet, Barclays made money by fixing bets for its own traders.[/size][/size][/font][/color][/left]

[left][color=#000000][font=Georgia, serif][size=1][size=4]We don’t know who else was fixing bets. Other big banks, including some of the largest in the United States, are [url="http://blogs.wsj.com/deals/2012/07/09/who-else-is-under-investigation-for-libor-manipulation/"]under investigation[/url]. Barclays doesn’t appear to have acted alone, and it is clear that its fixes weren’t secret deals by rogue traders. Traders put requests to manipulate the rates in writing and even joked about delivering champagne to those who helped them.[/size][/size][/font][/color][/left]

[left][color=#000000][font=Georgia, serif][size=1][size=4]It is also clear that many of those who didn’t have a fixer — including consumers, community banks and credit unions — lost money. Barclays padded its bottom line by taking money from everyone else. It won when it shouldn’t have won — and others lost when they shouldn’t have lost. The amount of money involved is staggering. On any given day, [url="http://www.economist.com/node/21558281"]$800 trillion[/url] worth of credit-related transactions are linked to Libor rates.[/size][/size][/font][/color][/left]

[left][color=#000000][font=Georgia, serif][size=1][size=4]In most markets, consumers could simply take their business elsewhere once they learned that the scales were rigged. But interest rates are different. [url="http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/07/05/explainer-why-the-libor-scandal-is-a-bigger-deal-than-jpmorgan/"]Everyone who borrows money[/url] on a mortgage, credit card, student loan, car loan or small-business loan — basically, everyone — is affected by a crooked market on Libor. According to the[url="http://www.clevelandfed.org/research/trends/2012/0712/01banfin.cfm"]Federal Reserve Bank of Cleveland[/url], in 2008 more than half of all adjustable-rate mortgages were linked to Libor. [url="http://articles.boston.com/2012-07-07/business/32565725_1_libor-interest-rates-credit-card-rates"]Even those who didn’t borrow but saved[/url] for retirement or their children’s future got hit with interest rates that had been faked.[/size][/size][/font][/color][/left]

[left][color=#000000][font=Georgia, serif][size=1][size=4]It gets worse. During the financial crisis, Barclays and other banks also appear to have consistently manipulated Libor to show [url="http://www.publications.parliament.uk/pa/cm201213/cmselect/cmtreasy/uc481/uc48101.htm"]lower-than-real borrowing rates[/url] to convince the world — and their regulators — that the bank was stronger than it really was. In other words, they rigged the interest-rate reports so that [url="http://www.bloomberg.com/news/2012-07-03/diamond-s-exit-shows-libor-only-what-each-bank-says-it-is.html"]no one would know exactly how much trouble[/url] they were in.[/size][/size][/font][/color][/left]

[left][color=#000000][font=Georgia, serif][size=1][size=4]With a rotten financial system once again laid bare to the world, the only question remaining is whether Wall Street has so many friends in Washington that meaningful reform is impossible.[/size][/size][/font][/color][/left]

[left][color=#000000][font=Georgia, serif][size=1][size=4]Real accountability would mean prosecuting the traders and bank officials who violated federal laws and prosecuting the executives who knew what they were up to. It would mean forcing executives to pay back any inflated compensation that was based on padded profits.[/size][/size][/font][/color][/left]

[left][color=#000000][font=Georgia, serif][size=1][size=4]Going forward, the rules would be changed so that Libor is calculated on actual borrowing costs, not estimated or claimed costs. And enforcement agencies would have the resources they need to launch investigations, to fight the armies of private lawyers the banks hire and to prosecute the law-breakers.[/size][/size][/font][/color][/left]

[left][color=#000000][font=Georgia, serif][size=1][size=4]But the heart of accountability lies deeper. It rests on acknowledging that we cannot trust Wall Street to regulate itself — not in New York, London or anywhere else. The club is corrupt. When Mitt Romney says he will move to repeal all of the new financial regulations, he supports a corrupt system. When members of Congress grill regulators for being too tough on Wall Street and slash the budgets of the regulators charged with overseeing Wall Street, they prop up a corrupt system.[/size][/size][/font][/color][/left]

[left][color=#000000][font=Georgia, serif][size=1][size=4]Financial services are critical to the economy. That’s why everyone — every family and every business — has a stake in an honest system. The fantasy that reducing oversight of the biggest banks will make us safer is just that — a dangerous fantasy. The Libor fraud exposes rot at the core. Now, who will stand up to fix it?[/size][/size][/font][/color][/left]


[/quote]

[Vol_Bengal]

[quote name='Jamie_B' timestamp='1342741906' post='1139747']
[size=4] Elizabeth Warren can do no wrong in my eyes.[/size]
[/quote]

She can in mine... but let me preface why.

She is so staunchly anti-big bank (which in and of itself I'm good with) that when Obama created the CFPB a lot of the regulation, etc. that is coming out of that office has substantially detrimental affect on the smaller financial institutions that didn't cause the problem to start with. The regs that were / are put in place trickle down to all FI's and the monetary burden on the smaller establishments can be insurmountable. I speak from a credit unions perspective. We're a $350 million asset credit union but the regulatory burden that continues to flow down (due in large part to what Warren started while at CFPB) has a substantial effect on ability to help members in a timely manner, waste on disclosure literature that 99 1/2% of gets thrown in the trash can as they walk out the door, and the expense of having at least 1 full time person just to keep up with the changing regulation is enormous.

I applaud her appetite for taking on "big bank" as it is needed. But there has to be a means by which that regulatory burden (that was put in place due to about 10-15 super banks) doesn't have such a negative effect on the smaller places. The answer may be to break them back up into smaller units again as they once were. Until that time, every time I see Elizabeth Warren I just cringe at the thought of what is coming down the pike next that we have to jump through hoops to satisfy.

[|Lucid|]

[quote name='Vol_Bengal' timestamp='1342803464' post='1139882']
She can in mine... but let me preface why.

She is so staunchly anti-big bank (which in and of itself I'm good with) that when Obama created the CFPB a lot of the regulation, etc. that is coming out of that office has substantially detrimental affect on the smaller financial institutions that didn't cause the problem to start with. The regs that were / are put in place trickle down to all FI's and the monetary burden on the smaller establishments can be insurmountable. I speak from a credit unions perspective. We're a $350 million asset credit union but the regulatory burden that continues to flow down (due in large part to what Warren started while at CFPB) has a substantial effect on ability to help members in a timely manner, waste on disclosure literature that 99 1/2% of gets thrown in the trash can as they walk out the door, and the expense of having at least 1 full time person just to keep up with the changing regulation is enormous.

I applaud her appetite for taking on "big bank" as it is needed. But there has to be a means by which that regulatory burden (that was put in place due to about 10-15 super banks) doesn't have such a negative effect on the smaller places. The answer may be to break them back up into smaller units again as they once were. Until that time, every time I see Elizabeth Warren I just cringe at the thought of what is coming down the pike next that we have to jump through hoops to satisfy.
[/quote]

I'm not an economist.. But when creating a network it's best to lock everything down to start and open holes as needed.

[|Elflocko|]

Excellent analogy.

[Vol_Bengal]

[quote name='Lucid' timestamp='1342910437' post='1140071']
I'm not an economist.. But when creating a network it's best to lock everything down to start and open holes as needed.
[/quote]

Your analogy... works mostly, provided you're putting in a brand new network (for the record, I"m the same as you in that scenario). The issue is the network has been in place for decades. What you, or whomever else, has done is hired an additional network admin to oversee it. Try to go into a working, functioning network and lock it down...

A lot of money is lost in actual dollars as well as people hours lost. A lot. My only point was I wish there were a way to actually penalize those institutions that caused the issues without it trickling down to those that had nothing to do with it.

[Jamie_B]

I think her biggest thing is that these are products like any other products and should all be regulated the same way.

[Vol_Bengal]

[quote name='Jamie_B' timestamp='1343046447' post='1140243']
I think her biggest thing is that these are products like any other products and should all be regulated the same way.
[/quote]

I agree with you, and her in this instance. I didn't mean it as a blanket statement... as I said above, there is a lot of which I agree with her on. She's a big proponent of regulation, regulation, regulation and on the big banks it is necessary... but it hurts the smaller FI's.

Most of what she says is very valid - but it is one of those sweeping, broad brush type of things where it has unintended consequences and I was just stating that I wince whenever she's discussing these items for this very reason.

[sois]

[quote name='Vol_Bengal' timestamp='1343043784' post='1140238']


Your analogy... works mostly, provided you're putting in a brand new network (for the record, I"m the same as you in that scenario). The issue is the network has been in place for decades. What you, or whomever else, has done is hired an additional network admin to oversee it. [B]Try to go into a working, functioning network and lock it down.[/b][/quote]

Yeah but we're talking about the US banking system, not some hypothetical functional system.

[Vol_Bengal]

[quote name='sois' timestamp='1343092426' post='1140364']
Yeah but we're talking about the US banking system, not some hypothetical functional system.
[/quote]

I'll agree it has its flaws, pretty significant ones at that... don't know if you were being funny or what, but lock down our existing banking system as it stands today akin to what was suggested and see how that works.

There would be mass hysteria...

[|Lucid|]

[quote name='Vol_Bengal' timestamp='1343129331' post='1140403']
I'll agree it has its flaws, pretty significant ones at that... don't know if you were being funny or what, but lock down our existing banking system as it stands today akin to what was suggested and see how that works.

There would be mass hysteria...
[/quote]

I'm not sure what you think I was suggesting.. But I was making an allusion in response to what you viewed as draconian measures that was in your opinion necessary on some levels but was causing institutions like the one you work for unnecessary burden. I don't remember you suggesting that the measures implemented had completely robbed your institution of the ability to conduct business. I was making the point that personally, I like the idea of locking things down perhaps a bit too tight at first, and loosening things as needed, as opposed to the opposite.

[Vol_Bengal]

[quote name='Lucid' timestamp='1343168916' post='1140499']
I'm not sure what you think I was suggesting.. But I was making an allusion in response to what you viewed as draconian measures that was in your opinion necessary on some levels but was causing institutions like the one you work for unnecessary burden. I don't remember you suggesting that the measures implemented had completely robbed your institution of the ability to conduct business. I was making the point that personally, I like the idea of locking things down perhaps a bit too tight at first, and loosening things as needed, as opposed to the opposite.
[/quote]

I guess I was reading what you typed and going from there...
[quote]But when creating a network it's best to lock everything down to start and open holes as needed.[/quote]

maybe I'm being too literal (and for that I beg your pardon) with your quote but we're not creating a network here... we're modifying an existing one. And, since you're correlating to networks... you know that it is quite a bit more difficult to add restraints once people have been given a wide berth for a long time. And, you're right, it hasn't completely robbed us of our ability to transact business. But, it puts substantially more expense into providing services to members (which like it or not affects rates paid and charged), slows the ability serve the member (I'd think from this standpoint more people here, once they recognize this, would be up in arms about), and generates a significant amount of waste. An FI that is 8 employees with $80 million in assets has to pay a full time compliance officer just the same way that a 50 employee $250 million asset FI does... that makes no sense. Places instead of hiring an additional loan officer or teller to speed up helping members instead have to fund a person to do nothing but continually monitor compliance issues.

Again, I'm all for making changes to limit what the banking system and big banks can do. All I said was there has to be (or should be) a method to do that without putting undo hardship on FI's that are quite a bit smaller and frankly caused 0% of the original crisis. My initial thoughts are re-invoke Glass-Steagall and break the largest banks back up into smaller individual ones that aren't "too big to fail" and if/when they get stupid again let em sink.

[|Elflocko|]

[quote name='Vol_Bengal' timestamp='1343217289' post='1140591']
I guess I was reading what you typed and going from there...


maybe I'm being too literal (and for that I beg your pardon) with your quote but we're not creating a network here... we're modifying an existing one. And, since you're correlating to networks... you know that it is quite a bit more difficult to add restraints once people have been given a wide berth for a long time. And, you're right, it hasn't completely robbed us of our ability to transact business. But, it puts substantially more expense into providing services to members (which like it or not affects rates paid and charged), slows the ability serve the member (I'd think from this standpoint more people here, once they recognize this, would be up in arms about), and generates a significant amount of waste. An FI that is 8 employees with $80 million in assets has to pay a full time compliance officer just the same way that a 50 employee $250 million asset FI does... that makes no sense. Places instead of hiring an additional loan officer or teller to speed up helping members instead have to fund a person to do nothing but continually monitor compliance issues.

Again, I'm all for making changes to limit what the banking system and big banks can do. All I said was there has to be (or should be) a method to do that without putting undo hardship on FI's that are quite a bit smaller and frankly caused 0% of the original crisis. [b] My initial thoughts are re-invoke Glass-Steagall and break the largest banks back up into smaller individual ones that aren't "too big to fail" and if/when they get stupid again let em sink.[/b]
[/quote]

This.

[Jamie_B]

SO on board with Glass-Stegal, I'd like to see it fully brought back, not just to what it was before the crisis.

[Homer_Rice]

I've been an advocate for separating merchant and commercial banking for a long time. I was pissed that Glass-Stegall was repealed under Clinton via Rubin. But I personally do not think that will be enough to right the ship. I also advocate the following:

--closing offshore loopholes; not making them illegal necessarily, but being punitive towards those who exploit them.
--increasing the capital gains tax to the same levels as regular income is taxed, with the exception of a predefined long terms capital gains rate (1 yr?, 2 yr?, 5yr?) Most stock market transactions, by volume, are high frequency trades where automated processes are in and out of a trade in seconds (actually milliseconds in some cases.) This kind of arbitrage needs to be subordinate to actual investing in a real economy and not merely a casino bet.
--instituting a transaction tax on all derivatives.
--reining in private equity firms by forcing them be more transparent and subject to merchant banking rules.

One thing we have lost, but which was crucial to Hamilton's view as first SecTreas, was that we need to minimize raw speculation while at the same time allowing "moneyed interests" to assume an important role in nation-building. We need to do something along similar lines, though of course it would look much different than the late 1700s.

[|Elflocko|]

I'll be damned. If this doesn't convince people that we need to revert current policies, then I have no hope of convincing them:


[b] [url="http://news.yahoo.com/blogs/ticket/wall-street-sandy-weill-break-big-banks-132940039.html"]Ex-Citigroup CEO Sandy Weill: ‘Split up’ the big banks[/url][/b]

[sois]

[quote name='Homer_Rice' timestamp='1343226762' post='1140627']
I've been an advocate for separating merchant and commercial banking for a long time. I was pissed that Glass-Stegall was repealed under Clinton via Rubin. But I personally do not think that will be enough to right the ship. I also advocate the following:

--closing offshore loopholes; not making them illegal necessarily, but being punitive towards those who exploit them.
--increasing the capital gains tax to the same levels as regular income is taxed, [b]with the exception of a predefined long terms capital gains rate [/b](1 yr?, 2 yr?, [b]5yr?[/b]) Most stock market transactions, by volume, are high frequency trades where automated processes are in and out of a trade in seconds (actually milliseconds in some cases.) This kind of arbitrage needs to be subordinate to actual investing in a real economy and not merely a casino bet.
--instituting a transaction tax on all derivatives.
--reining in private equity firms by forcing them be more transparent and subject to merchant banking rules.

One thing we have lost, but which was crucial to Hamilton's view as first SecTreas, was that we need to minimize raw speculation while at the same time allowing "moneyed interests" to assume an important role in nation-building. We need to do something along similar lines, though of course it would look much different than the late 1700s.
[/quote]

I'd propose a graduated rate. Sell after 1 year: 75% tax on gains. Yr 2 65%, 3 50%, 4 30%, 5 20% 6 15%.
Eliminate gambling, reinstate investing.
No more day traders.
It would reduce volume of transactions possibly bringing down stock prices, but it would smooth out volatility.
Shareholders would be INVESTORS, not leeches who are looking to flip.

It would be about more than the bottom line, it would be about believing in what the company does.

[Jamie_B]

[quote name='Homer_Rice' timestamp='1343226762' post='1140627']
I've been an advocate for separating merchant and commercial banking for a long time. I was pissed that Glass-Stegall was repealed under Clinton via Rubin. But I personally do not think that will be enough to right the ship. I also advocate the following:

--closing offshore loopholes; not making them illegal necessarily, but being punitive towards those who exploit them.
--increasing the capital gains tax to the same levels as regular income is taxed, with the exception of a predefined long terms capital gains rate (1 yr?, 2 yr?, 5yr?) Most stock market transactions, by volume, are high frequency trades where automated processes are in and out of a trade in seconds (actually milliseconds in some cases.) This kind of arbitrage needs to be subordinate to actual investing in a real economy and not merely a casino bet.
--instituting a transaction tax on all derivatives.
--reining in private equity firms by forcing them be more transparent and subject to merchant banking rules.

One thing we have lost, but which was crucial to Hamilton's view as first SecTreas, was that we need to minimize raw speculation while at the same time allowing "moneyed interests" to assume an important role in nation-building. We need to do something along similar lines, though of course it would look much different than the late 1700s.
[/quote]
[quote name='sois' timestamp='1343230160' post='1140638']
I'd propose a graduated rate. Sell after 1 year: 75% tax on gains. Yr 2 65%, 3 50%, 4 30%, 5 20% 6 15%.
Eliminate gambling, reinstate investing.
No more day traders.
It would reduce volume of transactions possibly bringing down stock prices, but it would smooth out volatility.
Shareholders would be INVESTORS, not leeches who are looking to flip.

It would be about more than the bottom line, it would be about believing in what the company does.
[/quote]

+1 to each of you

[quote name='Elflocko' timestamp='1343230121' post='1140637']
I'll be damned. If this doesn't convince people that we need to revert current policies, then I have no hope of convincing them:


[b] [url="http://news.yahoo.com/blogs/ticket/wall-street-sandy-weill-break-big-banks-132940039.html"]Ex-Citigroup CEO Sandy Weill: ‘Split up’ the big banks[/url][/b]
[/quote]

Who let him out of his cage?

[|Elflocko|]

[quote name='Jamie_B' timestamp='1343231308' post='1140640']

Who let him out of his cage?
[/quote]

Yeah, "I already made my billions by raping the system, let's go ahead and forget the fact that it never should have been changed in the first place".

[Jamie_B]

[quote name='Elflocko' timestamp='1343232218' post='1140643']
Yeah, "I already made my billions by raping the system, let's go ahead and forget the fact that it never should have been changed in the first place".
[/quote]

If he wants to be a real leader and gain the trust of Americans, give that money back.

[|Elflocko|]

[quote name='Jamie_B' timestamp='1343232781' post='1140645']
If he wants to be a real leader and gain the trust of Americans, give that money back.
[/quote]

[Jamie_B]

[quote name='Elflocko' timestamp='1343233550' post='1140646']

[/quote]

exactly

[Homer_Rice]

[quote name='sois' timestamp='1343230160' post='1140638']
I'd propose a graduated rate. Sell after 1 year: 75% tax on gains. Yr 2 65%, 3 50%, 4 30%, 5 20% 6 15%.
Eliminate gambling, reinstate investing.
No more day traders.
It would reduce volume of transactions possibly bringing down stock prices, but it would smooth out volatility.
Shareholders would be INVESTORS, not leeches who are looking to flip.

It would be about more than the bottom line, it would be about believing in what the company does.
[/quote]
Lol. You're much more ruthless than I am! I don't see any point in outlawing day-trading. It's the institutional stuff that is really killing us. And for day traders, current short term trades are taxed the same as regular income. I can't remember when the lower rate kicks in, but I think it is at least one year. And I think your suggested rates for capital gains are a bit prohibitive. IMO, the general idea is to do as you suggest--turn shareholders into investors--but not kill the market.

On the flip side of the coin, there is no reason why preferential treatment cannot be shifted away from "gambling" and directed towards more really productive investment--we already see a bit of this with munis, etc...

[Homer_Rice]

[quote name='Elflocko' timestamp='1343230121' post='1140637']
I'll be damned. If this doesn't convince people that we need to revert current policies, then I have no hope of convincing them:


[b] [url="http://news.yahoo.com/blogs/ticket/wall-street-sandy-weill-break-big-banks-132940039.html"]Ex-Citigroup CEO Sandy Weill: ‘Split up’ the big banks[/url][/b]
[/quote]
Interesting. We are starting to see more of this sentiment among bankers, especially in Europe. The LIBOR scandal has really shaken things up, as it should. It's the most outrageous scamming of the system in a long time. The cynical part of me is thinking that the banking industry wants to control the process of re-regulation to their advantage, just as they have controlled the process of de-regulation to their advantage. Which would be consistent with the nastier banksters out there--they don't really care about the social implications of their acts, so long as they get paid. And...so long as the geese with the golden eggs aren't murdered.

[Vol_Bengal]

[quote name='Homer_Rice' timestamp='1343269462' post='1140757']
The cynical part of me is thinking that [b]the banking industry wants to control the process of re-regulation to their advantage, just as they have controlled the process of de-regulation to their advantage.[/b] Which would be consistent with the nastier banksters out there--they don't really care about the social implications of their acts, so long as they get paid. And...so long as the geese with the golden eggs aren't murdered.
[/quote]

This. Isn't just cynical thinking... it is what is happening. The government will "re-regulate" and joe public will thing "all is well" again. When, in reality, your politician is going to say to anyone that comes with ideas of regulation that "let me see what the banks think"... before they'll do shit.

That is a fact - seen it happen.