McDonald on Deutsche Bank: Similar dynamic to Lehman 6 Hours Ago | 02:19
German officials could be about to find themselves in an uncomfortable position: Being called on to show they’re ready to rescue a bank in a part of the world where such operations are considered taboo.
Deutsche Bank came under intensified market fire Thursday, the latest salvo being a Bloomberg report that a small number of hedge funds are trimming their sails at the German bank.
In a broad perspective, the move would represent a minor dent in Deutsche’s derivatives clearing business. Barry Bausano, chairman of Deutsche’s hedge fund business, told CNBC on Thursday that while there have been some outflows, there have also been inflows, which he said is “part of the typical ebbs and flows” of the prime brokerage business.
WASHINGTON (AP) — Key assertions by Hillary Clinton in defense of her email practices have collapsed under FBI scrutiny.
The agency’s yearlong investigation found that she did not, as she claimed, turn over all her work-related messages for release. It found that her private email server did carry classified emails, also contrary to her past statements. And it made clear that Clinton used many devices to send and receive email despite her statements that she set up her email system so that she only needed to carry one.
FBI Director James Comey’s announcement Tuesday that he will not refer criminal charges to the Justice Department against Clinton spared her from prosecution and a devastating political predicament. But it left much of her account in tatters and may have aggravated questions of trust swirling around her Democratic presidential candidacy.
A look at Clinton’s claims since questions about her email practices as secretary of state surfaced and how they compare with facts established in the FBI probe:
The Clinton’s are absolutely crooks. The only reason why she had the clintonmail.com private server created was to simply keep the financial deals where access and preferential Government treatment was sold to the highest bidders. The reason the decision was made by the FBI was down to pressure from above. To recommend charges would have created all kinds of political problems. Basically, it was a case of too big to fail. This will probably hurt her by costing her a few votes, but she will still make it to the WH due to blind loyalty from women, Democrats, and most of all, the mainstream media.
This has to be the lowest point in any run-up to a Presidential election.
Ridgewood NJ, THE MOST important financial decisions in life aren’t made in Wall Street board rooms or by bureaucrats in Washington — they’re made around kitchen tables. Around these tables families look at their bills, their savings, their job prospects and their personal finances and try to figure out how to get ahead in this terrible economy. Unfortunately, the Dodd-Frank Act, the law that was enacted in 2010 with huge promises of economic recovery, has stifled the financial success of families, businesses and entrepreneurs.
And while you might not know Dodd-Frank by name, you have certainly felt its impact in your wallet. The architects of Dodd-Frank crafted an onerous maze of regulations and rules that put Washington priorities ahead of the needs of American families. Since Dodd-Frank became law, free checking has largely disappeared, and the American Dream has become more difficult to make a reality — especially if you’re self-employed — since it’s become harder to obtain a loan to buy a new house or start a business. In fact, the rate of new business start-ups is near a 20-year low, and last month’s jobs report was the worst since 2010.
Not only has Dodd-Frank made it harder for Americans to get ahead, it makes yet another bailout of Wall Street more likely. During the 2008 crisis, the taxpayers were forced to bail out big banks considered “too big to fail.” Today, those banks are bigger, and Dodd-Frank enshrines in law the expectation that taxpayers will once again be on the hook for costly bailouts.
I’m joining my colleagues on the House Financial Services Committee to propose a blueprint for American financial success. The Financial CHOICE Act — which stands for Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs — is designed to revitalize economic growth through competitive capital markets. This plan will fix the problems of Dodd-Frank by increasing punishment for crooks, ending taxpayer bailouts, scaling back poorly designed regulations and holding Washington accountable to We the People.
Penalties for fraud
To better protect consumers, the Financial CHOICE Act imposes the toughest — and most expensive — penalties in history for fraud and deception. The Securities and Exchange Commission will have new authority to increase punishment for repeat offenders and link fines to investor losses. This will make sure that fraudsters who stole or scammed huge amounts of money from inno-cent people won’t get just a slap on the wrist for their crimes.
Our plan offers economic opportunity for all and bailouts for none. Dodd-Frank made promises to end “too big to fail” that were never kept. We can end this cycle by forcing failing institutions to file for bankruptcy. Our plan reforms the bankruptcy code to protect taxpayers and instill much-needed market discipline. Taxpayers shouldn’t be on the hook for the mistakes of big banks and Wall Street, and under our plan they never will be again.
One of the key tenets of the Financial CHOICE Act is an optional “off-ramp” for financial institutions to break free of Washington’s one-size-fits-all rules. But the condition for being free of excess regulation is a strong capital standard, which means that banks will be forced to hold assets to back up their liabilities. By passing the CHOICE Act, we can both manage liabilities and let banks do what they do best: invest in the next American Dream.
Washington desperately needs transparency. Dodd-Frank created bureaucracies like the Consumer Financial Protection Bureau that gave immense power to a single, politically appointed director who makes economic decisions on your behalf. The CFPB tells you what financial products you can have or not have because they think they know what’s best for you when it comes to loans, mortgages and car purchases.
Our plan makes the CFPB, and other unaccountable agencies, into bipartisan commissions. We would also require all financial regulations to undergo strict cost-benefit tests to make sure they’re not doing more harm than good. And we would change the system to ensure that all major financial regulations are approved by Congress before they are imposed on the American people.
Resistance by banks
I expect that it will be difficult to get support for bottom-up solutions like the Financial CHOICE Act in Washington. This plan is hated by big banks and crony capitalists that are all going to lose influence and power over the rest of America if this bill is passed. However, I believe that Congress can make this necessary reform with the support of people who are more concerned about the financial decisions made around kitchen tables than they are with protecting the interests of Washington insiders.
People in northern New Jersey don’t need economic reports to tell them that the economy is still in bad shape. We see it every day in our bank accounts and in our towns. Recovery can happen, and we can be prosperous again, but it has to start in our communities — not in Washington. The Financial CHOICE Act can help make that possible.
Rep. Scott Garrett, R-Wantage, serves New Jersey’s 5th Congressional District. He is chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises.
A Wall Street credit ratings agency has warned that Atlantic City’s financial problems are unlikely to be solved by rescue legislation signed by Gov. Chris Christie earlier this month. Brent Johnson, NJ.com Read more
Atlantic City breathed a sigh of relief last month when Governor Christie signed a badly needed and long-delayed financial rescue package for the resort town. Salvador Rizzo, The Record Read more
Ridgewood NJ, Joshua S. Gottheimer is a lawyer, speechwriter, and public policy adviser. He has been active within the Democratic Party as a speechwriter for Bill Clinton and an advisor for the presidential campaigns of Wesley Clark, John Kerry, and Hillary Clinton. He is currently running for the United States House of Representatives in New Jersey’s 5th congressional district.
The New York Times called Gottheimer a “Protégé of Clintons” saying , “few can claim as direct a connection to the former secretary of state as Mr. Gottheimer, who began his career as a young speechwriter in the Clinton White House and advised Mrs. Clinton’s 2008 campaign. Mr. Clinton and Chelsea Clinton have already quietly appeared at a Manhattan fund-raiser in late October, where Ms. Clinton introduced Mr. Gottheimer as something of a family member.” https://www.nytimes.com/2015/12/26/nyregion/protege-of-hillary-and-bill-clintons-targets-us-congressional-seat.html
On February 8th the FBI disclosed in a federal court filing, that it is looking into Hillary Clinton’s use of a private email server. On March 2nd the Justice Department granted immunity to a former State Department staffer, who worked on Hillary Clinton’s private email server, as part of a criminal investigation into the possible mishandling of classified information, according to a senior law enforcement official.
While the Ridgewood blog has already reported that Gottheimer is being funded by Wall Street interests looking to expand the current “too big to fail” policies and make Wall Street and Corporate bailouts even more frequent something Garret is vehemently opposed too. The NYT again reported ,”Mr. Gottheimer reported raising around $1 million for his campaign through September. A review of his filings found that about one dollar in six came directly from fellow alumni of the Clinton White House and campaigns — many of whom are scattered across powerful companies like Time Warner Inc., Bloomberg L.P. and Goldman Sachs — or from major donors and employees of consulting firms tied closely to the Clintons. “https://www.nytimes.com/2015/12/26/nyregion/protege-of-hillary-and-bill-clintons-targets-us-congressional-seat.html
And all this before any mention of the Clinton foundation ,which the National Review called an , ” elaborate slush fund, includes numerous donors and even one-time board members with dodgy backgrounds, shady dealings, and even criminal convictions that should repel rather than lure a once and perhaps future president of the United States. Peter Schweizer’s meticulously researched new best-seller Clinton Cash” (complete with 635 endnotes) delineates this ultimate power couple’s sordid circle. https://www.nationalreview.com/article/419791/clinton-foundation-reeks-crooks-thieves-and-hoods-deroy-murdock
Because it is completely misreading the situation. Early in the new year, on Sunday, January 3, Federal Reserve vice chair Stanley Fischer delivered a hawkish speech to the American Economic Association.
Completely misreading the economy, which is woefully weak while inflation is virtually nil, Fischer strongly hinted that the Fed would be raising its target rate by a quarter of a percent every quarter for the next three years.
The next day the S&P 500 dropped 1.5 percent. In the week that followed, the broad index fell 6 percent. The week after that it fell over 2 percent. During that two-week period, the Dow Jones dropped 1,437 points.
The dollar went up. Oil plunged 21 percent. Raw-material commodities dropped. And credit risk spreads in the high-yield junk market rose substantially. Actually, it was a global event, as stock markets around the world plunged. Utter chaos.
Gathering for the first time after their epoch-ending decision to raise interest rates in December, the backdrop couldn’t be more different for Federal Reserve policy officials.
The long-awaited rate increase went smoothly, but simmering concerns over China, the global economy as a whole, deflating commodities and financial market valuations have since risen to the fore. Even fund managers that were relaxed about slightly tighter monetary policy last month are now wondering whether that was complacent.
“It is reasonable for investors to wonder whether Fed’s December rate hike was a policy error,” admits Bob Michele, chief investment officer of JPMorgan Asset Management. “Historically the Fed has raised rates because either growth or inflation was uncomfortably high. This time is different — growth is slow; wage growth is limited; deflation is being imported.”
Perhaps most of all, many investors now fret that they are operating without a safety net they had grown attached to during the post-financial crisis era.
Garrett Introduces Bill to Hold FSOC Accountable to the American People
Sep 18, 2015
the staff of the Ridgewood blog
WASHINGTON, D.C. – Rep. Scott Garrett (NJ-05), Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, today introduced H.R. 3557, the Financial Stability Oversight Council (FSOC) Transparency and Accountability Act, to bring much-needed transparency and accountability to the FSOC.
“The Financial Stability Oversight Council (FSOC) is one of the most notorious examples of the kind of secretive and unaccountable government bodies that could only be a creation of Washington, D.C. The Dodd-Frank Act vested the FSOC with the authority to designate nonbank financial institutions as “too big to fail,” essentially giving them unprecedented authority over an entire sector of the U.S. economy without adequate checks and balances.
“The Council continues to hold closed-door meetings, refuses to publish substantive transcripts, and stonewalls requests from the people’s representatives when we need more information about its operations. No agency should be allowed to operate above the law in this way, and my bill will shed some much-needed light on this shadowy government body.”
Garrett’s legislation would:
Subject the FSOC to the Government in the Sunshine Act
Subject the FSOC to the Federal Advisory Committee Act
At all FSOC meetings, allow for the participation of all members of the Commissions and Boards represented
Require that any vote taken by the principal of a Commission or Board represented must first be taken by that Commission or Board and the principal must then in turn vote that same decision at the Council
Allow for Members of Congress on the Congressional oversight committees of FSOC to be able to attend all FSOC meetings
A previous version of the legislation passed the House Financial Services Committee in June, 2014.
Five years ago today, the Dodd-Frank Act was signed into law amidst promises that the legislation would protect American consumers, make our economy more competitive, and end ‘too big to fail.’ Instead, Dodd-Frank has stifled economic growth, made it more difficult for Main Street businesses to obtain credit, and increased the likelihood that taxpayers will be on the hook for additional Wall Street bailouts. Most importantly, this law has and has made it harder for Americans to find a job, buy a home, and save money for their family’s future. Rep Scott Garrett
House Financial Services Committee chairman Jeb Hensarling (R-Texas) will say in a policy speech on Tuesday that the 2010 Dodd-Frank Wall Street Reform law has made the country “less financially stable.”
Hensarling’s attack on the fifth anniversary of Dodd-Frank, will come during a speech at the American Enterprise Institute in Washington.
“The Dodd-Frank architecture, first of all, has made us less financially stable,” Hensarling will say, according to excerpts obtained by The Hill. “Since the passage of Dodd-Frank, the big banks are bigger and the small banks are fewer… Dodd-Frank concentrates greater assets in fewer institutions. This is bad policy and bad economics.”
He will argue that Dodd-Frank’s regulations — despite being written largely for financial institutions — have impacted “grocery markets, cable TV servers and bowling alley chains” that “must comply with regulations imposing wage controls, salary ratios and private compensation disclosures made for Wall Street investment firms.”
Hensarling made similar arguments on Saturday, when he delivered the Republicans’ weekly address, as well as in an op-ed for The Wall Street Journal published earlier Monday.
Liberals like Sen. Elizabeth Warren (D-Mass.) and Democratic presidential candidate Sen. Bernie Sanders (I-Vt.) have argued that Dodd-Frank didn’t go far enough in regulating the markets.
They have criticized the financial industry for lobbying heavily against Dodd-Frank to weaken its regulations.
WASHINGTON, D.C. – Rep. Scott Garrett (NJ-05), Chairman of the House Financial Services Capital Markets and Government Sponsored Enterprises Subcommittee, issued the following statement in response to Federal Reserve Chair Janet Yellen’s testimony before the House Financial Services Committee today.
“The Federal Reserve has proven itself to be one of the most unaccountable and least transparent agencies in the federal government, and today’s hearing did little to change that reality. From being unresponsive to subpoena requests from our Committee to dismissing concerns over serious problems in the fixed income markets, the Fed is the poster child of a shadow regulatory system that threatens taxpayers and our broader economy. It is an agency in dire need of change, and I look forward to continuing our Committee’s efforts to bring real reforms to the Federal Reserve.”
Rep. Garrett has been a longtime critic of the Federal Reserve’s lack of transparency and its failed monetary policy. He is the author of two pieces of legislation that would shed light on the Federal Reserve’s notoriously opaque operations:
H.R. 113, The Federal Reserve Accountability and Transparency Act of 2015
H.R. 2625, The Bailout Prevention Act of 2015
Legislation adds transparency to bailout authority under Section 13(3)
WASHINGTON, D.C. – U.S. Representatives Scott Garrett (R-N.J.), Chairman of the House Financial Services Capital Markets and Government Sponsored Enterprises Subcommittee, and Mike Capuano (D-MA), member of the Financial Services Committee, today introduced H.R. 2625, the Bailout Prevention Act of 2015.
During the financial crisis of 2008, the Federal Reserve used broad powers under Section 13(3) of the Federal Reserve Act to provide trillions of dollars in low-cost loans to a handful of financial institutions. While the Dodd-Frank Act included provisions that were intended to restrict some of the Fed’s broad powers under 13(3), the Fed’s proposed rule in 2014 to implement Dodd-Frank failed to make any meaningful changes, creating a need for Congressional action.
“Amidst the financial crisis of 2008, we witnessed the worst kinds of government cronyism when huge financial institutions were bailed out through section 13(3) of the Federal Reserve Act without much prudence or oversight,” said Garrett. “While Dodd-Frank promised to end the cycle of ‘too big to fail,’ all it did was codify this unfair practice into law and put the American taxpayers on the hook for untold billions—or even trillions—of dollars. I’m happy to introduce this bill with Rep. Capuano to implement the systemic changes and Congressional oversight needed to ensure that the notoriously opaque Federal Reserve is held accountable to our constituents.”
“America’s largest financial institutions received unprecedented assistance from the Federal Reserve during the crisis, much of it unknown to the Congress or public at the time,” said Capuano. “While the Dodd-Frank Act brought some reforms, the perception lingers that some financial institutions are simply Too Big to Fail and could be bailed out again. This perception has consequences favoring the biggest players in the financial system. We may not know today what the next crisis will look like, but we all have a right to know the full extent of measures that may be taken to prevent a crisis. This legislation will help protect taxpayer dollars by increasing oversight of the Federal Reserve’s emergency lending powers and bringing much needed transparency to the process.”
H.R. 2625, the Bailout Prevention Act (BPA) of 2015, would:
Prohibit the Fed from lending to borrowers that are insolvent. The BPA would require an institution’s relevant financial regulators to confirm that a borrower is solvent based on the previous four months of financial data, and would deem insolvent any institution that is undergoing a bankruptcy proceeding.
Establish a penalty rate for borrowers using a lending facility under 13(3). The BPA would require a “penalty rate” for borrowers under 13(3) of 500 basis points (5%) over comparable treasuries.
Establish criteria for lending facilities to be “broad-based.” The BPA would require that any lending facility under 13(3) have a minimum of five borrowers, eliminating the Fed’s ability to pick and choose whether to lend to individual institutions.
Require Congressional approval for facilities that do not meet the “broad-based” criteria. The BPA allows for expedited procedures in Congress if the Fed believes that loans must be made to less than five institutions due to unusual circumstances.
Make reports available to the public in a timely manner. The BPA would reduce public reporting time to 60 days. It would also require that GAO audits of the lending facilities are made public within 60 days after they are shut down.
Similar companion legislation was introduced last month by U.S. Senators David Vitter (R-LA) and Elizabeth Warren (D-MA).
The Federal Reserve’s ability to give emergency loans to distressed institutions in a crisis would be restricted under legislation being prepared by lawmakers who want to stop “backdoor bailouts”.
The proposed legislation — a striking challenge to the Fed from a bipartisan pair of senators — will reignite debate over whether the US succeeded in ending banks’ “too big to fail” status with its response to the financial crisis.
The Fed contained panic during the crisis by offering emergency loans to institutions facing liquidity crunches. But, after the meltdown, Congress introduced restrictions to prevent the bailout of single struggling entities, while preserving Fed powers to provide liquidity to groups of firms.
