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Banks vs. American People - Can Wall Street Reform Be Done?

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Guest LAW

Secretary Tim Geithner's Remarks Before the American Enterprise Institute on Financial Reform

 

"We are at a defining moment in the great debate about financial reform. It's been two and a half years since the crisis started. It's been nine months since President Obama first laid out a proposal for comprehensive reform. And it's been three months since the House of Representatives passed a major reform bill. This is an enormously complicated issue. We have to get it right. But we know all about the choices. Now we have to decide whether or not we are going to act."

 

"If we fail to act, America will lose this opportunity to set the global agenda, to define new high standards for all financial companies, and to lead the debate in shaping a level playing field on terms that play to our strengths. If we fail to act, American firms that operate globally will face a more balkanized system, with higher costs of doing business and riddled with pockets of lower standards designed to attract the exact types of risky behavior we are seeking to end."

 

"I urge everyone to watch this process closely, for it will be a test of our capacity as a nation to deal with complex and consequential problems. When you see amendments designed to weaken the basic protections of reform; when you see amendments proposed to exempt certain types of financial firms or financial instruments from rules; ask why we should be protecting those private interests at the expense of the public interest."

 

"These are difficult issues and our legislators and their staffs often look to the financial industry for advice as they try to sort out what makes sense. This is important to get right but be careful whose voice you listen to. Listen less to those whose judgments brought us this crisis. Listen less to those who told us all they were the masters of noble financial innovation and sophisticated risk management. Listen less to those who complain about the burdens of living with smarter regulation or who oppose having to pay a fee for the costs of this or future crises.

 

"Instead, listen to the families and businesses still suffering from this crisis. Listen to those who borrowed responsibly but today can't get a loan or refinance their mortgage. Listen to those who lost their jobs and their healthcare and their pension savings. Listen to them."

 

"The test we face is whether we enact real reforms that provide strong protection for consumers, strong constraints on risk taking by large institutions, and strong tools to protect the economy and tax payers from future crises. We will not accept a bill that does not meet that test."

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Guest HUMAN

Lady, Will your group "the Democrats" concede ALL the power again to the Executive?

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Secretary Tim Geithner's Remarks Before the American Enterprise Institute on Financial Reform

 

"We are at a defining moment in the great debate about financial reform. It's been two and a half years since the crisis started. It's been nine months since President Obama first laid out a proposal for comprehensive reform. And it's been three months since the House of Representatives passed a major reform bill. This is an enormously complicated issue. We have to get it right. But we know all about the choices. Now we have to decide whether or not we are going to act."

 

"If we fail to act, America will lose this opportunity to set the global agenda, to define new high standards for all financial companies, and to lead the debate in shaping a level playing field on terms that play to our strengths. If we fail to act, American firms that operate globally will face a more balkanized system, with higher costs of doing business and riddled with pockets of lower standards designed to attract the exact types of risky behavior we are seeking to end."

 

"I urge everyone to watch this process closely, for it will be a test of our capacity as a nation to deal with complex and consequential problems. When you see amendments designed to weaken the basic protections of reform; when you see amendments proposed to exempt certain types of financial firms or financial instruments from rules; ask why we should be protecting those private interests at the expense of the public interest."

 

"These are difficult issues and our legislators and their staffs often look to the financial industry for advice as they try to sort out what makes sense. This is important to get right but be careful whose voice you listen to. Listen less to those whose judgments brought us this crisis. Listen less to those who told us all they were the masters of noble financial innovation and sophisticated risk management. Listen less to those who complain about the burdens of living with smarter regulation or who oppose having to pay a fee for the costs of this or future crises.

 

"Instead, listen to the families and businesses still suffering from this crisis. Listen to those who borrowed responsibly but today can't get a loan or refinance their mortgage. Listen to those who lost their jobs and their healthcare and their pension savings. Listen to them."

 

"The test we face is whether we enact real reforms that provide strong protection for consumers, strong constraints on risk taking by large institutions, and strong tools to protect the economy and tax payers from future crises. We will not accept a bill that does not meet that test."

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Guest U.S. Chamber of Commerce

The U.S. Chamber of Commerce today intensified its campaign for an alternative to the proposed Consumer Financial Protection Agency (CFPA). The Chamber has called for an alternative approach to strengthen consumer protection without creating an agency with unchecked powers and massive authority over the economy. The campaign, including grassroots outreach and national television, radio, and online ads, kicks into high gear today as members of Congress head home for the congressional recess.

 

"We're taking our call for bipartisan, balanced legislation to the states during the congressional recess, underscoring with the American people that we need financial reform that protects consumers without stifling job growth," said David Hirschmann, president and CEO of the Chamber's Center for Capital Markets Competitiveness. "The CFPA as presented in the Dodd bill would make it harder for small businesses to obtain credit and is the wrong approach to consumer protection. Rather than directly addressing the failures in regulation that contributed to the current economic crisis, the CFPA would simply add a new agency with unprecedented power on top of a broken regulatory system."

 

The Chamber has recommended creating a Consumer Protection Council to ensure coordination of regulatory and enforcement actions among the federal financial regulators. The council would ensure that regulatory gaps are eliminated, prescribe consistent disclosure and examination standards, and identify areas in which new regulations are necessary. The Chamber retained Andy Pincus of Mayer Brown to conduct an analysis of current regulatory problems and develop recommendations to strengthen existing weaknesses and improve consumer protections.

 

"The CFPA would significantly grow our government and saddle America's job creators with more federal bureaucracy," Hirshmann said. "The current proposals in Congress would also create a fragmented system of regulation that adds inconsistencies and confusion in regulatory standards. This would not improve consumer protections or simplify disclosures; it will make them worse."

 

The Chamber's television advertisement titled "No Sleep" highlights how Americans are losing sleep over the economy and illustrates the anxieties felt by small business owners as they struggle to get the capital they need to grow and create jobs. It calls on Americans to contact their representatives and urge them to stop the current proposal. Go to: http://www.stopthecfpa.com/ to view the ad. The ads are a part of a multi-million dollar nationwide grassroots campaign which has generated nearly 200,000 letters sent to Capitol Hill urging Congress to stop the CFPA.

 

Since its inception three years ago, the Center for Capital Markets Competitiveness has led a bipartisan effort to modernize and strengthen the outmoded regulatory systems that have governed our capital markets. The CCMC is committed to working aggressively with the administration, Congress, and global leaders to implement reforms to strengthen the economy, restore investor confidence, and ensure well-functioning capital markets.

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Goldman Sachs and Tourre violated the federal securities laws and made illegal profits from fraudulent statements to investors. Their scheme was investors to purchase securities-based swap agreements obtained money or property by means of untrue statements.

 

Goldman Sachs and Tourre knowingly or recklessly misrepresented in the term sheet, flip book and offering memorandum for ABACUS 2007-ACI that the reference portfolio was selected by ACA Capital Holdings, Inc. without disclosing the significant role in the portfolio selection process played by Paulson & Co. Inc. ("Paulson"), a hedge fund with financial interests in the transaction adverse to IKE, ACA Capital Holdings, Inc. and ABN. Goldman Sachs and Tourre also knowingly or recklessly misled ACA into believing that Paulson invested in the equity of ABACUS 2007-ACI and, accordingly, that Paulson's interests in the collateral section process were closely aligned with ACA's when in reality their interests were sharply conflicting.

 

Unbeknownst to ABN, Paulson played a significant role in the collateral selection process and

had a financial interest in the transaction that was adverse to ACA Capital Holdings, Inc. Capital and ABN.

 

http://www.sec.gov/litigation/complaints/2010/comp21489.pdf

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Guest Enron Ex

The Goldman Sachs Group, Inc. (NYSE: GS) responds to a complaint filed by the SEC today.

 

The SEC’s charges are completely unfounded in law and fact and we will vigorously contest them and defend the firm and its reputation.

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Guest Douglas Johnson

John Paulison walked away with a billion dollars. Wonder if he was buddies with Bernie Madoff?

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Guest wiki

John Alfred Paulson (born December 14, 1955 in Queens, NY) is founder and president of Paulson & Co., a New York-based hedge fund.

 

In 1994, he founded his own hedge fund with $2 million and two employees (himself and an assistant).

 

In April 2010, NY Times reported Paulson had earned $2.3 billion in 2009 & $2 billion in 2008 from fees received from his Hedge Fund Paulson & Co (He bet against sub prime mortgages long before the term became well known).

 

abc_rich_080418_mn.jpg

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Guest ALWAYSRED

Boehner Statement on SEC Charges Against Goldman Sachs, President Obama's Top Wall Street Ally GOP Leader: "Despite President Obama's rhetoric, his permanent bailout bill gives Goldman Sachs and other big Wall Street banks a permanent, taxpayer-funded safety net by designating them 'too big to fail.'

 

House Republican Leader John Boehner (R-OH) issued the following statement after the U.S. Securities & Exchanges Commission (SEC) announced it was charging Wall Street giant Goldman Sachs – which has been supportive of President Obama's bill to create a permanent bailout fund – with defrauding investors:

 

"These are very serious charges against a key supporter of President Obama's bill to create a permanent Wall Street bailout fund. Despite President Obama's rhetoric, his permanent bailout bill gives Goldman Sachs and other big Wall Street banks a permanent, taxpayer-funded safety net by designating them 'too big to fail.' Just whose side is President Obama on?

 

"Instead of permanent bailouts for President Obama's Wall Street allies, Republicans believe the best way to protect taxpayers is by reforming Fannie Mae and Freddie Mac, the government-sponsored companies that sparked the meltdown by giving high-risk loans to people who couldn't afford it."

 

NOTE: Goldman Sachs was President Obama's top Wall Street contributor during the 2008 election cycle, donating nearly $1 million to his campaign.

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Guest Anne

Guess it would be too much to ask that any penalty/fines/lawsuit settlements Goldman Sachs pays comes out of the bonus pool instead of tacking it on as an expense that comes out of the shareholders pocket books.

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Guest greenzen

It is time these investment banks just focus on underwriting loans, instead of gambling on hedge funds.

 

John Paulson needs to fully investigated for he designed the the security.

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Guest Smokescreen

This is what deregulation brings, unbridled greed and fraud. Conservatives were so happy about deregulating and the wonders of free market forces they wanted to privatize Social Security. Luckily, Democrats nixed that idea.

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Guest SueMVetforObama2

First Goldman gets hit for fraud and now Merrill

 

NEW YORK (Dow Jones)--Merrill Lynch & Co. engaged in the "same type of fraudulent conduct" that Goldman Sachs Group Inc. (GS) was accused of committing by the U.S. Securities & Exchange Commission in a lawsuit on Friday, a Dutch bank said Friday.

 

In a letter filed in New York State Supreme Court in Manhattan on Friday, lawyers for Cooperatieve Centrale Raiffeisen-Boerenleenbank BA, or Rabobank, said Merrill Lynch committed a similar fraud in the structuring of a $1.5 billion collateralized debt obligation, known as Norma CDO Ltd.

 

http://www.businessweek.com/news/2010-04-16/merrill-lynch-used-same-alleged-fraud-as-goldman-bank-claims.html

 

Why does the Republican leadership protect fraudulent firms??

Reply Favorite Flag as abusive Posted 07:57 AM on 4/17/

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Guest Alaska Tea Party

Boehner Statement on SEC Charges Against Goldman Sachs, President Obama's Top Wall Street Ally GOP Leader: "Despite President Obama's rhetoric, his permanent bailout bill gives Goldman Sachs and other big Wall Street banks a permanent, taxpayer-funded safety net by designating them 'too big to fail.'

 

House Republican Leader John Boehner (R-OH) issued the following statement after the U.S. Securities & Exchanges Commission (SEC) announced it was charging Wall Street giant Goldman Sachs – which has been supportive of President Obama's bill to create a permanent bailout fund – with defrauding investors:

 

"These are very serious charges against a key supporter of President Obama's bill to create a permanent Wall Street bailout fund. Despite President Obama's rhetoric, his permanent bailout bill gives Goldman Sachs and other big Wall Street banks a permanent, taxpayer-funded safety net by designating them 'too big to fail.' Just whose side is President Obama on?

 

"Instead of permanent bailouts for President Obama's Wall Street allies, Republicans believe the best way to protect taxpayers is by reforming Fannie Mae and Freddie Mac, the government-sponsored companies that sparked the meltdown by giving high-risk loans to people who couldn't afford it."

 

NOTE: Goldman Sachs was President Obama's top Wall Street contributor during the 2008 election cycle, donating nearly $1 million to his campaign.

 

Obama needs to move away from hiring Goldman Sachs employees. It is starting to look like he has be bought.

 

http://www.americanbankingnews.com/2009/10/19/is-goldman-sachs-nysegs-obamas-personal-financial-farm-team/

 

The announcement last week that yet another executive from Goldman Sachs (NYSE:GS) was installed in a major financial regulatory position of the Obama administration raised even more red flags on the growing and apparently disturbing relationship directly between the administration and Goldman Sachs.

 

Adam Storch, vice president in Goldman Sachs’ Business Intelligence Group, is the latest to be added to the Obama financial team, picked to be the COO of the enforcement division of the Securities and Exchange Commission (SEC), a new position at the SEC.

 

This is primarily motivated by the failure to identify the Bernie Madoff scandal, even though there were numerous markers pointing to it for some time over a 20-year period.

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Guest The White House

WEEKLY ADDRESS: President Obama Says We Must Move Forward on Wall Street Reform

WASHINGTON – In his weekly address, President Barack Obama said that in the wake of the economic crisis Wall Street reform is too important an issue for inaction. The plan moving through Congress will end bailouts, hold Wall Street accountable, and protect consumers, taxpayers and the economy from the kind of abuses that helped bring about the economic crisis. Every day without reform, those abuses, and the system which allowed them, remain in place. It is time to move forward with real reforms for Wall Street.

 

Remarks of President Barack Obama

As Prepared for Delivery

The White House

April 17, 2010

 

There were many causes of the turmoil that ripped through our economy over the past two years. But above all, this crisis was caused by failures in the financial industry. What is clear is that this crisis could have been avoided if Wall Street firms were more accountable, if financial dealings were more transparent, and if consumers and shareholders were given more information and authority to make decisions.

 

But that did not happen. And that’s because special interests have waged a relentless campaign to thwart even basic, common-sense rules – rules to prevent abuse and protect consumers. In fact, the financial industry and its powerful lobby have opposed modest safeguards against the kinds of reckless risks and bad practices that led to this very crisis.

 

The consequences of this failure of responsibility – from Wall Street to Washington – are all around us: 8 million jobs lost, trillions in savings erased, countless dreams diminished or denied. I believe we have to do everything we can to ensure that no crisis like this ever happens again. That’s why I’m fighting so hard to pass a set of Wall Street reforms and consumer protections. A plan for reform is currently moving through Congress.

 

Here’s what this plan would do. First, it would enact the strongest consumer financial protections ever. It would put consumers back in the driver’s seat by forcing big banks and credit card companies to provide clear, understandable information so that Americans can make financial decisions that work best for them.

 

Next, these reforms would bring new transparency to financial dealings. Part of what led to this crisis was firms like AIG and others making huge and risky bets – using things like derivatives – without accountability. Warren Buffett himself once described derivatives bought and sold with little oversight as “financial weapons of mass destruction.” That’s why through reform we’d help ensure that these kinds of complicated financial transactions take place on an open market. Because, ultimately, it is a marketplace that is open, free, and fair that will allow our economy to flourish.

 

We would also close loopholes to stop the kind of recklessness and irresponsibility we’ve seen. It’s these loopholes that allowed executives to take risks that not only endangered their companies, but also our entire economy. And we’re going to put in place new rules so that big banks and financial institutions will pay for the bad decisions they make – not taxpayers. Simply put, this means no more taxpayer bailouts. Never again will taxpayers be on the hook because a financial company is deemed “too big to fail.”

 

Finally, these reforms hold Wall Street accountable by giving shareholders new power in the financial system. They’ll get a say on pay: a vote on the salaries and bonuses awarded to top executives. And the SEC will ensure that shareholders have more power in corporate elections, so that investors and pension holders have a stronger voice in determining what happens with their life savings.

 

Now, unsurprisingly, these reforms have not exactly been welcomed by the people who profit from the status quo – as well their allies in Washington. This is probably why the special interests have spent a lot of time and money lobbying to kill or weaken the bill. Just the other day, in fact, the Leader of the Senate Republicans and the Chair of the Republican Senate campaign committee met with two dozen top Wall Street executives to talk about how to block progress on this issue.

 

Lo and behold, when he returned to Washington, the Senate Republican Leader came out against the common-sense reforms we’ve proposed. In doing so, he made the cynical and deceptive assertion that reform would somehow enable future bailouts – when he knows that it would do just the opposite. Every day we don’t act, the same system that led to bailouts remains in place – with the exact same loopholes and the exact same liabilities. And if we don’t change what led to the crisis, we’ll doom ourselves to repeat it. That’s the truth. Opposing reform will leave taxpayers on the hook if a crisis like this ever happens again.

 

So my hope is that we can put this kind of politics aside. My hope is that Democrats and Republicans can find common ground and move forward together. But this is certain: one way or another, we will move forward. This issue is too important. The costs of inaction are too great. We will hold Wall Street accountable. We will protect and empower consumers in our financial system. That’s what reform is all about. That’s what we’re fighting for. And that’s exactly what we’re going to achieve.

 

Thank you.

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Guest Marcus

Mr. President,

Goldman Sachs have ruined millons of lives and still continue to do so. They are part of the aristocracy of wealth, arrogant and have no care about the country, unlike the classic capitalists who bought parks, built libraries etc. who appreciated the fact that their wealth and citizenship were entwined.

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Guest Blue Dog

That is why reform is so necessary. Members of the both side of the aisle need to discuss what is best the country, not what is best for their pockets. Meg Whitman is going to have a huge conflict of interest running California in the interests of Goldman Sachs.

 

Republicans, led by Senate minority leader Mitch McConnell of Kentucky, have criticized a provision that would give the government authority to take apart large financial firms that are failing, using a $50 billion industry-supported fund. Republicans say the provision would create a permanent taxpayer-funded bailout."

 

There is not basis to the Republican assertion that the bill "would create a permanent taxpayer-funded bailout", when the fund which is going to be used to break up failing institutions, not bail them out, is actually supported by funds for the banks?

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Guest Bill the Collector

Despite your feeble railing against bailouts, Senator Dodd wants a $50 billion special fund to buy up bank assets if they fail. And if that's not enough, it promises to let taxpayers pay more. That is a bailout to me. How are smaller banks able to compete.

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Guest Truthseeker

Republicans are going to bungle their chances of winning the elections in November by constantly calling financial reform more bailouts. Even their point man Senator Corker stated financial reform is not a bailout.

 

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Guest Bling Bling

Mitch McConnell (R-Ky.) is the one who started the rumor that the bill would institutionalize taxpayer bailouts of big Wall Street banks. Scott Brown is just an idiot when he made the one fifth jobs of Massachusetts bankers will lose their job if this bill was passed.

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Guest joiseydude

Mitch McConnell is the poster boy for all that is wrong with Washington. Here's a guy who has led the charge to kill campaign finance reforms and keep the bribe money flowing into his pockets.

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