Five Reasons the Financial Reform Bill Is Bogus

MinyanVille ^ | 04/26/2010 | Jeff Macke

[SeekAndFind]

Hello from New York where we refuse to apologize for focusing on Goldman Sachs (GS), again. We go with whatever happens to be capturing our inner-irritation or mental attention, in that order. The inescapable stench of the way “financial reform” is being jammed down our throats terrifies me. What do you want me to do? Fake up some shock that the Greeks are crooks? The Greeks have always been regarded shady, in terms of economics. Or at least they’ve had their bad decades. I’m not explaining. Google it. My point is I remain pissed about the financial-reform circus -- I don’t have anything else to pay attention to. That adds up to, “deal with it in another article.” Please. Let’s get on with it. In no particular order, here’s what’s mindless about the bill and why I’m annoyed. You’ll be quizzed as to which is which.

Reason #1: Literally No On Earth Knows What It Means

No one knows what it really means. The wonks are baffled because the terms aren’t finalized. The casual fans, like me, refuse on principal to deal with excessively long documents. Not because I’m lazy. I’m not. It’s more practical to ignore large documents. You know what works well? Short books. Short lists of rules. The Ten Commandments makes sense. Few of the amendments to the Constitution are logical. You know what are always packed full of lies and crap? Books you can’t read or explain to a (smart) kid. The tax code, the health-care bill, and the financial-reform bill. Obviously I could continue.

The financial reform bill is rumored to be some 1,408 pages. It may be larger or smaller. I don’t care because if the rumor was over 1,000 pages, it necessarily meant the document was a pile of tree-killing lies designed to be impenetrable. You win, government. The bill is impenetrable. I also say it’s crap. If you disagree, you’re lying.

Reason #2: It Won’t Ever Work

Let’s just say the bill is one-thousand four-hundred and eight pages long, because I saw the number on the Internet. You know what the lawyer/wonks who actually read this thing are going to do with their unparalleled comprehension? They’re going to explain to their employers (the evil banks sucking the life blood of Main Street) how to go about making absurd amounts of money by trading and selling financial devices that pass through loopholes in the bill. The lawyers aren’t necessarily “bad people” for conducting themselves in this manner. The banks are paying the lawyers absurd amounts of money solely to find the bill’s loopholes. Bankers and lawyers are uneasy allies. This isn’t a moral issue; it’s a business deal.

The lawyers write a brief. Many of the practices suggested in this brief, and what the traders do with it, will someday be page 1,409 of a future reform bill. But, at least for the next few years, the brief is a license to print money doing stuff that won’t be illegal for ages. The banks will deal with repercussions then. For now, “Surfs back up, boys... and, uh, you, Betty!”

This whole rule-book work-around will take Wall Street firms about a week. Some time for the lawyers', some time for the traders’ ideas to exploit it. Then the band will start working on how to market it. Then it’ll be in practice, somewhere well under the radar, at first, within a couple weeks the final reform bill being signed. If it’s a fancy product (like CDOs), the pitch will be personal and include documents that have no pictures except graphs. If it’s meant for consumers, it’ll have no (detailed) graphs but a ton of pictures; mostly of old people, young parents trying to save a buck, and animals like bulls, bears, and lions. TV commercials for the simple ideas will have someone like George Clooney or Gene Hackman doing a voice-over.Reason #3: None of the Accused Parties Are Going to Jail

Banks like Goldman don’t hire preening blowhards like Fab because of their social skills with people who aren’t in their spiritual fraternity. These are kids who make millions more than their peers. Their jobs are second in prestige only to high-level traders at huge hedge funds or guys with their own hedge shop. Did you honestly expect them to be people you’d want your 20-year-old daughter spending weekends with? Goldman hires guys like that because they have no ethical qualms about exploiting the wonks in the firm who outline that 1409th-page work-around. Also, guys like Fabu Fab probably went to good business schools or are oilier than a new Little League glove. Fab is indiscreet and foolish but I bet he’s smarter than any of us would like. We’ll see if he’s poised. Anyway, Goldman’s fix isn’t going to be to stop hiring obnoxious blowhards.

Goldman’s solution is going to be to take away the obnoxious blowhards’ email privileges. And maybe firing Fabu. One of the two, or both. But the machine won’t even hiccup.

Reason #4: The SEC Went After Goldman for Political Reasons and the Press Knows It

I read the New York Times because the current administration leaks news to it. The Wall Street Journal is a better paper, but I generally know what they’re going to say. The Times is more apt to flabbergast me. I enjoy a good flabbergasting.

So thanks, Floyd Norris, for the Fortunate Timing Seals a Deal article in this morning’s Times. Floyd says the SEC going after Goldman Sachs on the basis of something which was obnoxious but seemingly not illegal (see Why Charges Against Goldman Will Have No Market Impact) was just plain luck by supporters of the bill.

When I didn’t bother to call but rather pretended to have a conversation with SEC Chairwoman, Nancy Shapiro, she commented: “Did bringing a legally absurd, ignorant but high-profile case against the very firm which personifies ‘Wall Street elitist, secret-handshaking billionaires’ to our imaginary Main Street somehow bring attention to that incomprehensible, press-concocted, and utterly ineffective financial reform bill the Democrats are trying to ram into law in about two weeks? Was that bill coming up for vote soon? Because we had no idea when we drummed up this charge.”

Which is a comment, I believe, would have gone quite a long way toward proving my points, had she said it to me. Even without it, the SEC folks who voted to bring the charges are either so very, um, “focused” (read: not bright), they’re unaware of the financial reform bill that will change their very role, or it was a political favor too well-timed to remotely be a coincidence. Decide as you will.

But Floyd Norris rocks. I’m screwing around here. Floyd is money. He’s just sort of a Democrat-type guy. Floyd wants to write “I Have Freaking Proof the Goldman Case Was Coming This Week Six Months Ago." But Floyd’s stuck with the reality of this being an obvious set-up. Mr. Norris is simply too good to sell out totally.

Finally, Reason #5: The Bill Was Passing Anyway; Holding a Pep Rally Was Just Running Up the Score

Democrat Chris Dodd, a Senator who previously had the yarbles to back up his friends at Wall Street (many of whom happen to live in Connecticut) is pulling a Senator Geary from Godfather 2. You know, the “special friend” of the Corleone Family who refused to defend the Family in a senatorial committee. The banks don’t have the politicians as indebted to them as Geary was to the Corleones. (It’s a sordid tale.) Goldman just seems to have once employed or bankrolled or both to about a quarter of the people on either side of the aisle in the Senate.

Hope you Pols don’t happen to own championship-quality stud horses of which you’re particularly proud, but that doesn’t matter until the end of the second reel. This movie is just getting rolling.

But the bill is obviously passing. If Senator Dodd is throwing Wall Street under the bus, albeit as politely as possible, this thing was done. The details? The Democrats have the ball, man. That may or not be a bad thing. I just root for “smart.” Either way, the Democrats just threw everything short of a pep rally at Cooper Hall yesterday. You think the “financial lobbyists” trying to put down this bill, no doubt without a counter-party of lobbyists on the other side, are going to be holding a rally that actually was on Wall Street? By the way, “financial lobbyist” was the oiliest term in President Obama’s terrific speech. The President’s voice is an advertisement for smoking -- it has that cool, smooth pitch the occasional smoke can give your voice. A better world would allow the President to sell tobacco on the back of magazines. Like Mickey Mantle. It was a good speech. President Obama could sell America Greek debt. And he probably will. When the President is rolling he could pull off winning a Nobel Prize and escalating in Afghanistan in the same year. He’s that good.

So, get used to the bill. Don’t pay that much attention (except of course to rumors) to the final details. If you’re a Republican, don’t be sad about your assorted representatives rolling over like Evel Knievel in Wembley Stadium (fast forward to 3:20 on the video). Politics, and life, is just like Evel Knievel in Wembley. Sometimes you’re the guy landing the jumps. Other times you hit that last double-decker bus. What are you gonna do?

[OneLoyalAmerican]

Greetings SeekAndFind:

We should oppose all further legislative activities of the Pelosi-Reid congress. Frankly, this congress betrayed the American people. I do not trust them to name another Robert C Byrd outhouse in WV, let alone a post office or warship.

Cheers,
OLA

[Son House]

oppose all further legislative activities of the Pelosi-Reid congress

^
Yes, the pattern of non-transparency and finish writing the legislation after the bill is passed is well established. The only time I seen a Republican get excited was when Boehner was asking Democrats if they read their Health Care Insurance reform bill. Too little, too late.

I’d should be screaming you will not write anything more into a bill, and you have to be able to explain every clause before the vote. Democrats have it too easy...

[Psycho_Bunny]

lol....I like this guys writing style.