Financial Regulation Winners and Losers

Let’s talk about Obama’s biggest achievement, THE achievement that will rally the public to the Democratic side in the upcoming election: FINANCIAL REFORM. . . (yawn), sorry. Any ways, here are the winners and losers. You probably won’t be surprised to hear that the well-connected banks are the winners and you are the loser.

The winners. . .

1. Goldman Sachs and the investment banks. This bill changes nothing for these boys (see 5 below).

2. Fannie Mae and Freddie Mac. These monster slush funds and dumping grounds for former Democratic staffers are big winners because somehow the Democrats couldn’t find it in their corrupt little hearts to fix their regulations. . . even though Fannie Mae and Freddie Mac directly caused the financial meltdown and will cost taxpayers $389 billion. Laughably, the MSM actually calls Fannie and Freddie “losers” on this because the lack of new regulations means the evil Republicans will keep talking about them. Boogey boogey boogey!!

3. Wal-Mart and the Retailers. Wal-Mart won a reduction in the amount that credit card companies can charge retailers for the use of a credit card -- which will save retailers $20 billion a year, which the Democrats are sure will be passed on to consumers. Wink wink.

4. Massachusetts Banks. To get Scott Brown’s vote, the bill includes exemptions for State Street bank and other Massachusetts banks from “the Volcker Rule,” which will keep banks everywhere outside of Massachusetts from trading with their own money. . . mostly.

5. CME Group. Blanche Lincoln forced a provision into the bill that requires that derivates be cleared by a third party and traded on an open exchange. The organization who led this charge is the CME Group, which coincidentally, provides just such an exchange! It's like a Christmas miracle!

6. Derivative Traders. Blanche Lincoln wanted to appear to crack down on the $600 trillion market in derivatives. So she put in place regulations that prevent banks from trading the more exotic derivatives. . . unless they do it through subsidiaries. This shell game is what is causing the MSM to call Goldman and the boys “losers” in this. Not coincidentally, the stock of Goldman and the boys went up between 4% and 6% right after this "punishing bill" was announced.


The losers. . .


1. Bank Customers. Bank fees are going up about $19 billion a year, almost the exact same amount the retailers won’t be sharing with you. If you believe the Democrats, then banks will pay these fees. If you aren’t stupid, then you know bank customers will pay these fees.

2. Retail Customers. Retailers also won the right to require minimum dollar amounts on credit card purchases.

3. The Democrats and the Liberal Press. The Democrats believe that they have finally achieved something they can sell to the public, and they are going to make this the focus of their campaign. Heh heh heh. . . oops, I mean, oh no, whatever will we do now!

4. Us. This bill does nothing to stop future bailouts, does nothing to clean up our archaic regulatory scheme, and simply ensconces the principle that big lobbyists get what they want from our government, and you pay for it. Moreover, a golden opportunity for true bi-partisan, expert-based reform is squandered. . . as usual.

In fact, the only good thing to come out of this bill is that mortgage issuers will now be required to hold 5% stakes in the mortgages they issue. This will slow mortgages and make them more expensive, but it will also help slow the growth of legal-yet-basically-fraudulent mortgages because the issuers will now stand to lose when they make bad mortgages.


There you have it. I hope you’re still awake. . . so do the Democrats.