Christopher John Dodd D-Senator from Connecticut could block the Lincoln derivative bill and water down the Volcker rule (*1). The Financial Overhaul Bill is over 1500 pages, I guaranty you, most of senators nor congressmen/congresswomen did not bother to read it. Financial lobbyists were busy to do their job and they succeed. I believe it was the life time opportunity to take advantage of unpopularity of banks and pass a strong bill to regulate the financial industry to stop them from gambling with our future, but they missed it. I'm speechless. Chris Dodd did it again! The Wall Street bailout was not enough he did one more favor for his friends in the Wall Street.
D-Senator Blanche Lincoln’s proposal was supposed to stop commercial banks from derivative trading. The original proposal would force banks to spin off their derivatives businesses entirely. They water down her bill and forced her to make significant changes to the bill. The new proposal clarified that the legislation would allow banks to trade and deal derivatives through separately capitalized affiliates. The new proposal also would give large bank-holding companies up to two years to follow the new rules and shield most community banks from limits. Yes you heard it right they are going to give bankers two years to follow the new rules. So for the next two years we are going to face business as usual. They cannot give banks taxpayers guaranty and allow them to gamble on synthetic derivatives. Wasn't it the reason AIG went belly up in 2008. How couldn't they learn their lesson? If banks want to act like hedge funds let them risk to default. Why should taxpayers pay for their risky bets? Depository banks should not allowed to use the depositors' money to gamble in Wall Street. The repeal of the Glass-Steagall Act of 1933 effectively removed the separation that previously existed between investment banks and depository banks is the caused by the collapse of the subprime mortgage market that led to the recent financial crisis. What are they thinking? A couple weeks ago, I called my senator and let him know what do I think. Problem is not many people understand the significant of financial reform nor they care what is going on in Washington. I start to wander if there is any patriotic person left in House or Senate? What are they doing to this country? History will blame Dodd and his colleagues for their shameful actions. If you wandering, why does senator Dodd beat his chest for bankers? The charts below would be a clear answer.
Top 20 Industries contributing to Senator Dodd:
Top 20 Contributors to Senator Dodd :
It's interesting to see even Dick Bove(financial analyst at Rochdale Securities) thinks this bill is useless.
I usually disagree with him, but this time I could not agree more. Here is a link to part of his interview with Bloomberg. click here to watch the video: Bove interview on Financial Overhaul bill .
(*1) Volcker Rule: The proposal specifically prohibits banks or institutions that owns banks from engaging in proprietary trading that isn't at the behest of its clients, and from owning or investing in a hedge fund or private equity fund, as well as limiting the liabilities that the largest banks could hold.
Source: The White House Office of the Press Secretary