No action from the FDIC for 3 weeks, this may be the longest stretch without closings in a year.’
That being said, there were 2 credit union closings last week that I missed: (Sorry)
It’s been an odd 2 weeks.
For those of you have followed my blog for a while, I started it in May of 2007, I have been suggesting that the Euro was likely to supplant the US as the world’s reserve currency.
Well, I missed a couple of things:
Now, I’m inclined to believe that, absent a German exit from the Euro, that the unified currency is doomed, and the EU may be as well.
Unlike my hairier brother,* I do not think that another war in Europe is inevitable, though I think that an EU breakup has a potential of leading to some shooting, or, more likely, some sort of a “Cold Peace.”
*The Indians call him “Carpet who walks”.
It looks like the Euro Zone may be letting the big banks get 100¢ on the dollar for bad sovereign debts:
Euro zone states may ditch plans to impose losses on private bondholders should countries need to restructure their debt under a new bailout fund due to launch in mid-2013, four EU officials told Reuters on Friday.
The possible move helped push stocks up in Europe and the U.S.
Discussions are taking place against a backdrop of flagging market confidence in the region’s debt and as part of wider negotiations over introducing stricter fiscal rules to the EU treaty.
Euro zone powerhouse Germany is insisting on tighter budgets and private sector involvement (PSI) in bailouts as a precondition for deeper economic integration among euro zone countries.
Commercial banks and insurance companies are still expected to take a hit on their holdings of Greek sovereign bonds as part of the second bailout package being finalized for Athens.
But clauses relating to PSI in the statutes of the European Stability Mechanism (ESM) — the permanent facility scheduled to start operating from July 2013 — could be withdrawn, with the majority of euro zone states now opposed to them.
The concern is that forcing the private sector bondholders to take losses if a country restructures its debt is undermining confidence in euro zone sovereign bonds. If those stipulations are removed, most countries in the euro zone argue, market sentiment might improve.
What is going on here is that the European Central Bank (ECB) was structured to eschew one of the most basic activities of a central bank, back-stopping debt sales in the presence of an investor panic.
The problem is that the ECB was structured largely in response to the German experience with hyperinflation in the 1920s, which led to the creation of the ECB as an organization committed to austerity and battling inflation to the exclusion of all other concerns.
I guess I kind of understand this, because, after all, they think that this period of extreme inflation led to the collapse of the German economy in the 1930s, and the rise of the Nazis, and WWII.
Of course, the German central bank of the 1930s was among the tightest of the central banks, and made the German depression particularly brutal, which could also tagged as leading to rise of the Nazis, and WWII.
Of course, if subscribe to the theory that roughly every century a war occurs in Europe, the parallels now, and 1914, when the Very Serious People in Europe, with the memory of the Napoleonic wars (1812), frantically tried to integrate the economies of Europe, which also sounds a lot like the entire Euro currency project.
My brother has predicted a new war in Europe, (see the comments)and this has led me to start looking at rather alarming echos of the past.
If there is one area where he differs from his predecessor, it is his anti-trust enforcement.
Another example of this is the pushback against the AT&T/T-Mobile merger, where FCC Chairman Julius Genachowski has come out strongly against the deal, and now has appeared to have killed it:
AT&T and T-Mobile USA edged closer to scrapping their proposed merger, saying on Thursday that they had withdrawn their application to the Federal Communications Commission to join their cellular phone operations.
Deutsche Telekom, the parent of T-Mobile, and AT&T said in a joint statement that they still intended to pursue the $39 billion merger and would prepare for a federal antitrust lawsuit that is seeking to block the deal. But the companies also said that AT&T planned to take a $4 billion charge against earnings to reflect the potential breakup fees that AT&T would have to pay Deutsche Telekom if the deal failed to go through.
The actions followed the decision this week by Julius Genachowski, the F.C.C. chairman, that the merger did not meet the commission’s standard for approval. Mr. Genachowski sent other commissioners a proposed order to refer the case to an administrative law judge, the first step toward a commission move to block the deal, which would combine the second- and fourth-largest cellphone carriers in the United States.
The application withdrawal appears in part meant to prevent the F.C.C. from making public AT&T and T-Mobile records about the potential effects of the merger, records that could then be used by the Justice Department in the antitrust trial.
The companies have maintained publicly that the deal would not lessen competition and that it would create jobs in the United States. But the Justice Department has said that the merger would severely restrict competition, and F.C.C. officials have said that AT&T’s confidential filings indicate the merger would eliminate jobs.
The withdrawal of the F.C.C. application “is a tacit acknowledgment by AT&T that this story is all but over,” said Craig Moffett, an analyst at Sanford C. Bernstein. “The fat lady hasn’t started singing yet, but she’s holding the mike, and the band is about to play.”
While Genachowski is still too timid for my tastes, compared to the Republican appointees, particularly the execrable Michael Powell, he is doing a creditable job.
I’m not sure if the Banksters have signed off on a disinformation, disruption, and infiltration program against Occupy Wall Street, but a a prominent Washington lobbying firm is trying to sell it to them:
A well-known Washington lobbying firm with links to the financial industry has proposed an $850,000 plan to take on Occupy Wall Street and politicians who might express sympathy for the protests, according to a memo obtained by the MSNBC program “Up w/ Chris Hayes.”
The proposal was written on the letterhead of the lobbying firm Clark Lytle Geduldig & Cranford and addressed to one of CLGC’s clients, the American Bankers Association.
CLGC’s memo proposes that the ABA pay CLGC $850,000 to conduct “opposition research” on Occupy Wall Street in order to construct “negative narratives” about the protests and allied politicians. The memo also asserts that Democratic victories in 2012 would be detrimental for Wall Street and targets specific races in which it says Wall Street would benefit by electing Republicans instead.
According to the memo, if Democrats embrace OWS, “This would mean more than just short-term political discomfort for Wall Street. … It has the potential to have very long-lasting political, policy and financial impacts on the companies in the center of the bullseye.”
The memo also suggests that Democratic victories in 2012 should not be the ABA’s biggest concern. “… (T)he bigger concern,” the memo says, “should be that Republicans will no longer defend Wall Street companies.”
It’s amusing, but it’s not time for a happy dance.
The thing to remember, and Chris Hayes is clear on this in the vid, is that this memo is just one pitch at creating a CoIntelPro type program, even if the American Bankers Association turned down this proposal.
There are dozens, if not hundreds of similar proposals in the works, and people who are trying to find someone obscenely rich mother f%$#er to bankroll them, so you have to figure that there are similar programs in process.
We are, after all, juxtaposing unconscionable levels of wealth with a sense of entitlement, and that’s a toxic brew.
And here they are, ordered, and numbered for the year so far.
2 a week is pretty close to trend. I would also note that while have been 9 credit union closing this year, but none since mid-July.
So, here is the graph pr0n with last years numbers for comparison (FDIC only):
*Which is why I’m not going with the MJ popcorn GIFTalk about mangling a metaphor, huh?*
But that’s the way I see the reports that the CFTC will be auditing all futures firms, in the hopes of preventing the theft co-mingling of funds that MF Global did under John Corzine:
Federal regulators have ordered an audit of every American futures trading firm to verify that customer money is protected, a move that comes after roughly $600 million in client funds were discovered to be missing from MF Global, the bankrupt brokerage firm once run by Jon S. Corzine.
The Commodity Futures Trading Commission, the federal regulator searching for the missing money at MF Global, will audit many of the nation’s largest futures commission merchants, according to a person briefed on the decision. Exchanges like the CME Group will examine smaller firms to ensure they are keeping customer money separate from company money, a fundamental rule on Wall Street.
The futures commission also announced on Thursday that it had formally opened an investigation into MF Global, a largely symbolic move that indicated the seriousness of the case. The agency has already issued subpoenas to MF Global and its auditor, PricewaterhouseCoopers, but the commission had to vote before announcing a full-scale investigation.
“The commission has determined it is in the public interest to confirm the existence of this particular investigation,” the agency said in a statement.
The thing here is that what MF Global did may be considered legal by regulators, as Jesse notes (BTW, he’s been on this like white on rice):
This is most likely a distortion of the principle known as ‘rehypothecation‘ in which a broker can use customer positions and holdings as collateral pledged for a margin loan for the purpose of securing funding from a third party to service that loan.
The principle at play here may be closer to a type of droit du seigneur, in which any assets you have posted at a futures brokerage may be used at will by the broker for their own purposes without regard to any customer obligations. It depends on the extent to which MF took customer assets and leveraged them.
In a way it is just making the unbalanced relationship between Wall Street and its customers official.
It means that customers are bearing hidden counterparty risks on assets to which they thought they had a clear title, such as Treasuries, and foreign currencies, and warehouse receipts for precious metals.
It means that brokers can go beyond the mere provision of funding for loss, and use customer accounts to fund their own leveraged speculation under exemptions duly granted by their ‘regulators.’
(emphasis mine)
Basically, what it means is that MF Global was allowed to use customer funds as collateral, without telling the customers, and without sharing any of the profits derived from this leverage.
What is going to happen here is that no one (except perhaps Corzine, since he’s clearly a Democrat) will see any serious jail time, and there will be no change in the rules, because, after all the system must be preserved, which is pretty much a mantra of both the professional staff at the various regulatory agencies and the White House.
As to preserving the existing system, it is merely a system of rent-taking, and if we were to take it down completely, and replace it trained elephants doling out loans, we’d probably do better, because elephants, at least, work for peanuts.
It was probably just because today is Veteran’s Day, and while a lot of people were at work today, the FDIC wasn’t.
88 failures so far this year.
At this point, I would say that it’s 50-50 whether or not we hit 3 digits for bank failures this year:
Community Bank of Rockmart in Rockmart, GA.
This is obviously out of the ordinary for the FDIC (the NCUA doesn’t wait until Fridays), so I’m wondering if something is odd, as in criminal indictments to follow, or if this Thursday is Friday, because of the
Nigel Tufnel
Veteran’s Day holiday.
We’ll find out tomorrow, when I’ll post my regular update, with graph, tomorrow.
Silvio Berlusconi has offered to resign:
The European debt crisis appeared to claim its most prominent victim on Tuesday when Prime Minister Silvio Berlusconi of Italy, cornered by world markets and humiliated by a parliamentary setback, pledged to resign after Italy’s Parliament passes austerity measures demanded by the European Union.
Although Mr. Berlusconi’s exit was not immediate — weeks of political wrangling over the austerity measures probably lie ahead — political commentators said they could see no escape this time for the prime minister, whose Houdini-like ability to wriggle free from scandals is legendary.
“A season is over,” said Mario Calabresi, the editor in chief of the Turin daily newspaper La Stampa, who said Mr. Berlusconi told him that he was not only stepping down, but also would not run for office again.
In the end, it was not the sex scandals, the corruption trials against him or even a loss of popular consensus that appeared to end Mr. Berlusconi’s 17 years as a dominant figure in Italian political life. It was, instead, the pressure of the markets — which drove Italy’s borrowing costs to record highs this week — and the European Union, which could not risk his dragging down the euro and with it the world economy.
It’s good that he’s going, but the bigger picture is that Berlusconi’s continued political success has been almost entirely due to his near complete dominance of Italian television.
Self-serving clowns like Silvio are the inevitable result of media consolidation, whether it’s the Italian monopoly on commercial TV (and effective control of state TV), or the media oligopoly in the United States.
The problem is that while one can have free and fair elections, but without an independent and heterogeneous media, you stand a real risk of not having a free and fair campaign.
In describing a new, “informal leadership directorate” in Europe, the “leaders of Germany and France, the presidents of the executive European Commission and of the European Council of EU leaders, the heads of the European Central Bank and the International Monetary Fund, the chairman of euro zone finance ministers, and the European Commissioner for economic and financial affairs,” is described as a “New Politburo“.
Heh.
I missed last week’s closings, so it’s included here this week.
It appears that the little spike over weeks 41 and 42 is over.
And here they are, ordered, and numbered for the year so far.
So, here is the graph pr0n with last years numbers for comparison (FDIC only):
The European Central Bank, in the first meeting since Mario Draghi replaced the clueless Jean-Claude Trichet as president, the ECB has chosen to cut rates.
Seeing as how the whole world, and in particularly the increasingly desperate cluster f%$# that is the Euro Zone, are in the the midst of a liquidity crisis/debt overhang where cheap money won’t do much.
That being said, the fact that Draghi did not wait a few months in order to save face for the ECB, and that he’s actually warning of an upcoming recession indicates that he is a bit more of a “reality based” than your typical central banker, who typically only give a sh%$ about inflation.
It should be noted that this is actually a significant departure from prior ECB policy, because Draghi appears to be sending a message that he will, at least temporarily ignoring the (under the current circumstances absolutely absurd) 2% inflation target.
So, Obama has announced a new assistance program for homeowners with underwater mortgages, the Home Affordable Refinance Program, which is to succeed the thoroughly corrupt HAMP program, which was geared toward helping the banksters to defraud homeowners, to allow for that cash flow to paper over some of the evidence of their insolvency.
A quick perusal of the proposal gives us the the following bullet points:
I’m dubious because I believe that the Obama administration has been completely captured by the banksters, and so will not live up to its expectation, but Felix Salmon calls the program pathetic based on its basic features:
- If you’re a homeowner whose mortgage isn’t owned or guaranteed by Frannie, you’re out of luck.
- If your mortgage was sold to Frannie after May 31, 2009, you’re out of luck.
- If you want to get out of negative-equity hell by doing a principal reduction, you’re out of luck.
- If your bank doesn’t feel like participating, for whatever reason, you’re out of luck.
Salmon also notes that even by the FHFA, the agency that is managing this program, does not forecast a significant uptick in refinancing, and the initial program has refinanced less than ⅕ of the the anticipated activities.
So, it probably fails on both the specifics of the plan, and the fact that Timmy “The Bankster’s Bitch” Geithner will be supervising the implementation, which is a recipe for another blow job for big banks.
And here they are, ordered, and numbered for the year so far.
Two weeks of 4 bank failures in a row.
I’m not sure if this is a trend, I’d wait another week on that, but we are back to (exactly) a two bank failure per week.
So, here is the graph pr0n with last years numbers for comparison (FDIC only):
According to Senator Sanders, a recent GAO report has uncovered pervasive conflicts of interests at the Federal Reserve.
The language is steeped in the gentility of the Senate, but I think that the short version is, “Stop the looting and start prosecuting”.
Sanders’ full press release after the break.
GAO Finds Serious Conflicts at the Fed
October 19, 2011
WASHINGTON, Oct. 19 – A new audit of the Federal Reserve released today detailed widespread conflicts of interest involving directors of its regional banks.
“The most powerful entity in the United States is riddled with conflicts of interest,” Sen. Bernie Sanders (I-Vt.) said after reviewing the Government Accountability Office report. The study required by a Sanders Amendment to last year’s Wall Street reform law examined Fed practices never before subjected to such independent, expert scrutiny.
The GAO detailed instance after instance of top executives of corporations and financial institutions using their influence as Federal Reserve directors to financially benefit their firms, and, in at least one instance, themselves. “Clearly it is unacceptable for so few people to wield so much unchecked power,” Sanders said. “Not only do they run the banks, they run the institutions that regulate the banks.”
Sanders said he will work with leading economists to develop legislation to restructure the Fed and bar the banking industry from picking Fed directors. “This is exactly the kind of outrageous behavior by the big banks and Wall Street that is infuriating so many Americans,” Sanders said.
The corporate affiliations of Fed directors from such banking and industry giants as General Electric, JP Morgan Chase, and Lehman Brothers pose “reputational risks” to the Federal Reserve System, the report said. Giving the banking industry the power to both elect and serve as Fed directors creates “an appearance of a conflict of interest,” the report added.
The 108-page report found that at least 18 specific current and former Fed board members were affiliated with banks and companies that received emergency loans from the Federal Reserve during the financial crisis.
In the dry and understated language of auditors, the report noted that there are no restrictions in Fed rules on directors communicating concerns about their respective banks to the staff of the Federal Reserve. It also said many directors own stock or work directly for banks that are supervised and regulated by the Federal Reserve. The rules, which the Fed has kept secret, let directors tied to banks participate in decisions involving how much interest to charge financial institutions and how much credit to provide healthy banks and institutions in “hazardous” condition. Even when situations arise that run afoul of Fed’s conflict rules and waivers are granted, the GAO said the waivers are kept hidden from the public.
The report by the non-partisan research arm of Congress did not name but unambiguously described several individual cases involving Fed directors that created the appearance of a conflict of interest, including:
- Stephen Friedman In 2008, the New York Fed approved an application from Goldman Sachs to become a bank holding company giving it access to cheap Fed loans. During the same period, Friedman, chairman of the New York Fed, sat on the Goldman Sachs board of directors and owned Goldman stock, something the Fed’s rules prohibited. He received a waiver in late 2008 that was not made public. After Friedman received the waiver, he continued to purchase stock in Goldman from November 2008 through January of 2009 unbeknownst to the Fed, according to the GAO.
- Jeffrey Immelt The Federal Reserve Bank of New York consulted with General Electric on the creation of the Commercial Paper Funding Facility. The Fed later provided $16 billion in financing for GE under the emergency lending program while Immelt, GE’s CEO, served as a director on the board of the Federal Reserve Bank of New York.
- Jamie Dimon The CEO of JP Morgan Chase served on the board of the Federal Reserve Bank of New York at the same time that his bank received emergency loans from the Fed and was used by the Fed as a clearing bank for the Fed’s emergency lending programs. In 2008, the Fed provided JP Morgan Chase with $29 billion in financing to acquire Bear Stearns.At the time, Dimon persuaded the Fed to provide JP Morgan Chase with an 18-month exemption from risk-based leverage and capital requirements. He also convinced the Fed to take risky mortgage-related assets off of Bear Stearns balance sheet before JP Morgan Chase acquired this troubled investment bank.
To read a more detailed analysis of the GAO report prepared for Sen. Sanders, click here.
To read the full GAO report, click here.
Another day, another sell-out deal from Iowa Attorney General Tom Miller and the Obama administration:
Talks between U.S. states and top banks over mortgage abuses are nearing agreement on a major sticking point that has bogged down settlement negotiations for more than a year.
…………
Under the proposed terms of the settlement — which could total $25 billion — banks would get broad legal immunity from state lawsuits in exchange for refinancing underwater loans, those mortgages where borrowers owe more than their homes are worth, the sources said.
…………
Banks have been holding out on a multi-billion-dollar settlement because they wanted broader legal immunity than state attorneys general were prepared to offer.
Originally, the states were only considering immunity for shortcuts taken during mortgage servicing and foreclosures, including the so-called “robo-signing” of documents to evict people behind on their mortgages.
In recent days, the state attorneys general agreed to release major banks from claims that they made legal errors when first originating the loans, such as approving loans for borrowers without verifying any income, according to two people familiar with the talks.
In exchange, banks would agree to refinance mortgages for borrowers who are current on their payments but owe more than their homes are currently worth, the sources said.
So, as Biden notes (see vid), they are getting a (pretty lame) deal from a contractor for bad gutters, and he demands to be cleared for the roof and the gutter they put in too.
But, as Yves Smith observes, the relief, such as it is, would only apply to non-securitized mortgages (about 20% of the mortgages), and the banks get to write the deal for the homeowners, meaning more booby traps for the the people who get “relief”, and probably a waiver of private liability.
BTW, this likely f%$#s the MBS investors, because without an official investigation of the securitization process, any potential private suit will be hamstrung.
Bank of America is trying to take its Merrill Lynch’s dodgy derivatives division and move it to the FDIC insured bank.
Interestingly enough, this has created a conflict between the Federal Reserve (who want to green light this) and the FDIC (who oppose the move):
Bank of America Corp. (BAC), hit by a credit downgrade last month, has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits, according to people with direct knowledge of the situation.
The Federal Reserve and Federal Deposit Insurance Corp. disagree over the transfers, which are being requested by counterparties, said the people, who asked to remain anonymous because they weren’t authorized to speak publicly. The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting, said the people. The bank doesn’t believe regulatory approval is needed, said people with knowledge of its position.
Three years after taxpayers rescued some of the biggest U.S. lenders, regulators are grappling with how to protect FDIC- insured bank accounts from risks generated by investment-banking operations. Bank of America, which got a $45 billion bailout during the financial crisis, had $1.04 trillion in deposits as of midyear, ranking it second among U.S. firms.
“The concern is that there is always an enormous temptation to dump the losers on the insured institution,” said William Black, professor of economics and law at the University of Missouri-Kansas City and a former bank regulator. “We should have fairly tight restrictions on that.”
(Emphasis mine)
Gee, you think? Keeping banks from moving risky investments to federally insured divisions is a bad thing?
Moody’s Investors Service downgraded Bank of America’s long-term credit ratings Sept. 21, cutting both the holding company and the retail bank two notches apiece. The holding company fell to Baa1, the third-lowest investment-grade rank, from A2, while the retail bank declined to A2 from Aa3.
Moody’s DowngradeThe Moody’s downgrade spurred some of Merrill’s partners to ask that contracts be moved to the retail unit, which has a higher credit rating, according to people familiar with the transactions. Transferring derivatives also can help the parent company minimize the collateral it must post on contracts and the potential costs to terminate trades after Moody’s decision, said a person familiar with the matter.
………
Moving derivatives contracts between units of a bank holding company is limited under Section 23A of the Federal Reserve Act, which is designed to prevent a lender’s affiliates from benefiting from its federal subsidy and to protect the bank from excessive risk originating at the non-bank affiliate, said Saule T. Omarova, a law professor at the University of North Carolina at Chapel Hill School of Law.
“Congress doesn’t want a bank’s FDIC insurance and access to the Fed discount window to somehow benefit an affiliate, so they created a firewall,” Omarova said. The discount window has been open to banks as the lender of last resort since 1914.
………
In 2009, the Fed granted Section 23A exemptions to the banking arms of Ally Financial Inc., HSBC Holdings Plc, Fifth Third Bancorp, ING Groep NV, General Electric Co., Northern Trust Corp., CIT Group Inc., Morgan Stanley and Goldman Sachs Group Inc., among others, according to letters posted on the Fed’s website.
The central bank terminated exemptions last year for retail-banking units of JPMorgan, Citigroup, Barclays Plc, Royal Bank of Scotland Plc and Deutsche Bank AG. The Fed also ended an exemption for Bank of America in March 2010 and in September of that year approved a new one.
Section 23A “is among the most important tools that U.S. bank regulators have to protect the safety and soundness of U.S. banks,” Scott Alvarez, the Fed’s general counsel, told Congress in March 2008.
If Bank of America is not actually insolvent, they wouldn’t be doing this. This is outright fraud.
What’s more, the Federal Reserve is an active accomplice in this .
H/t Naked Capitalism, where Yves Smith notes:
This changes the picture completely. This move reflects either criminal incompetence or abject corruption by the Fed. Even though I’ve expressed my doubts as to whether Dodd Frank resolutions will work, dumping derivatives into depositaries pretty much guarantees a Dodd Frank resolution will fail. Remember the effect of the 2005 bankruptcy law revisions: derivatives counterparties are first in line, they get to grab assets first and leave everyone else to scramble for crumbs. So this move amounts to a direct transfer from derivatives counterparties of Merrill to the taxpayer, via the FDIC, which would have to make depositors whole after derivatives counterparties grabbed collateral. It’s well nigh impossible to have an orderly wind down in this scenario. You have a derivatives counterparty land grab and an abrupt insolvency. Lehman failed over a weekend after JP Morgan grabbed collateral.
But it’s even worse than that. During the savings & loan crisis, the FDIC did not have enough in deposit insurance receipts to pay for the Resolution Trust Corporation wind-down vehicle. It had to get more funding from Congress. This move paves the way for another TARP-style shakedown of taxpayers, this time to save depositors. No Congressman would dare vote against that. This move is Machiavellian, and just plain evil.
(emphasis original)
Evil, incompetent, and convinced of their own Objectivist virtue. Ayn Rands supermen in a nutshell.
At least until the next time that they need to be bailed out by the Treasury and Federal Reserve.
It seems that they don’t like the Volker rule:
Goldman Sachs Group Inc. (GS) and Morgan Stanley may consider dropping their status as bank holding companies to avoid expenses tied to the Volcker rule, said David Hilder, an analyst at Susquehanna Financial Group LLP.
The rule in its current form would impose costs on lenders and drive capital to non-bank market makers, causing the two New York-based firms to consider whether to stop being banks, Hilder said in a note yesterday, when four regulatory agencies issued a 298-page draft of the rule for public comment.
Goldman Sachs and Morgan Stanley were the biggest U.S. securities firms before they converted to bank holding companies after the September 2008 bankruptcy of Lehman Brothers Holdings Inc. Both became subject to regulation by the Federal Reserve and won access to central bank programs such as the discount window, which are designed to protect deposit-taking banks.
“The regulators have proposed a massive new compliance burden on banks to prove that their market-making activities are just that, and not proprietary trading in disguise,” wrote Hilder, who’s based in New York. “If these regulations are adopted in anything close to their proposed form, there will be large additional costs imposed on banks as market-makers that will not apply to market-makers not owned by banks.”
Does anyone think that the Vampire Squid isn’t going to get bailed out when they f%$# themselves up again?
Seriously, just read his advice to the Wall Street protesters.