Hailing the new Wall Street reform bill as one that will "empower consumers and investors, bring the shadowy deals that caused this crisis into the light of day, and put a stop to taxpayer bailouts once and for all," President Barack Obama on Wednesday signed into law the nation's broadest financial regulations since the Great Depression.
Following months of contentious debate, Wednesday's signing provided a moment for the White House to bask in another major legislative victory as the president announced, "The fact is, every American -- from Main Street to Wall Street -- has a stake in our financial system. . . . That's why we all stand to gain from these reforms. We all win when investors around the world have confidence in our markets. We all win when shareholders have more power and information. We all win when consumers are protected against abuse. And we all win when folks are rewarded based on how well they perform, not how well they evade accountability."
Ah, yes, "accountability."
That's President Accountability's favorite word.
How's that accountability thing going for the financial industry, President Obama?
Have you held accountable the "folks" who nearly brought down the economy back in 2008?
Are the new financial regulations and "reforms" you promoted and signed into law going to keep those same "folks" from bringing the economy down again?
Judging by the front page Times article that relates how the same "folks" who nearly brought the economy to collapse in 2008 are STILL engaging in risky Big Casino Wall Street bets, it doesn't look like much has changed:
When Congress passed a new financial regulation bill last month, it sought to prevent federally insured banks from making speculative bets using their own money. But that will not stop banks from making bets that some critics deem risky, even as the rules go into effect over the next few years.
That is because many such bets — on the direction of the stock market or the price of coal, for example — are done on behalf of clients. So, the banks say, they will continue to be allowable despite the new restrictions.
Indeed, several trades that were made on behalf of clients went bad for the banks even as the new rules were being debated in Washington this year. JPMorgan Chase and Goldman Sachs, for example, each lost more than $100 million on transactions handled for customers in the period from April to July.
Blowups like these, only larger, contributed to the financial crisis and forced the federal government to spend billions of dollars to bail out financial institutions. Yet analysts are quick to point out that many of those transactions were handled by the banks, ostensibly to serve clients.
“You can use client activity as a cover for basically anything you are doing,” said Janet Tavakoli, who runs her own structured finance consulting firm. “It’s very problematic that losses like this are showing up. It’s a prime example of what the financial reform bill doesn’t address.”
That ambiguity could have broad consequences for the future of trading on Wall Street.
Given the size of the banks, these recent losses were relatively small. But they highlight how banks will continue to be able to make bets where their own money is at risk — a practice that has yielded huge profits on Wall Street in recent years.
Though these trades were made on behalf of clients, they subjected the banks to the kind of risk that Congress sought to curtail when it devised the Volcker Rule, which banned banks from speculating with their own money. That practice is known as proprietary trading.
Even before the new rules were passed, Morgan Stanley and JPMorgan began dismantling their stand-alone “prop desks” and shifting those traders into client-related businesses. Goldman is considering changes that could turn some of its star proprietary traders into asset managers who rely on capital from outside investors.
But for all the talk of shutting down trading desks and reassigning employees to prepare for the Volcker Rule, proprietary-style trading will probably survive, if under a different name.
The administration told us yesterday, through Arne Duncan's "Naming Names" speech, that
"The truth is always hard to swallow, but it can only make us better, stronger and smarter," according to remarks he plans to deliver in Little Rock, Ark. "That's what accountability is all about — facing the truth and taking responsibility."
Fair enough, Arne.
Here's some truth for the "folks" in the Obama administration.
The financial "reform" bill does NOTHING to keep the same "folks" who stole billions then came to the federal government for billions more in bailouts to CONTINUE TO STEAL BILLIONS and come back to the federal government or the Federal Reserve for more free money when the deals go sour again.
Which means what happened in 2008-2009 will happen AGAIN.
Hell, the Times says it is ALREADY happening.
And rather than actually hold the "folks" who brought the economy either to the brink of or to complete collapse, Obama will blame the education system and say public schools just aren't educating people with the 21st century skills they need to succeed.
You want to hold somebody accountable, Mr. President?
Take a look around at your economic advisers - Treasury Timmeh and Leisure Suit Larry.
Then take a look at the hedge fundies and other Wall Street criminals you're vacationing with on Marthas's Vineyard.
Finally, take a look in the mirror.
Those are the people they need to be held accountable for the economic mess we are in.
Instead you blame teachers and send your secretary of education out to give speeches about how names need to be named and teachers need to be fired.
Yeah, that'll keep the next market plunge and economic collapse from happening.