April 25, 2010 · 10:41 pm

Holy goose poop, I never thought they were so stupid

Golden Goose

Senate ready to force banks to quit dealing in derivatives. It’s earnings from those that power real estate sales in New York, New Jersey and Connecticut. Got an offer on your house? Take it.

5 Comments

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5 responses to “Holy goose poop, I never thought they were so stupid”

  1. shoeless
    April 26, 2010 at 8:06 am

    You know where I stand on the political spectrum, but even I agree that significant derivative reform is needed. The idea that Chinese walls actually keep prop trading at arm’s length from the rest of the institution is pure folly. The idea that banks can wade into this market with the FDIC as the ultimate backstop needs to be revoked.

  2. shoeless
    April 26, 2010 at 10:01 am

    If we split their trading/derivatives businesses from their banking operations, that would have the desired effect, no?

    Any other wishy-washy rule which allows banks to continue to operate in their present form would likely leave us on the hook for the “privatize gains/subsidize losses” approach.

  3. Retired IB'er
    April 26, 2010 at 11:13 am

    The problem goes beyond FDIC backing. Just taking that away will not solve the problem as the trading institutions have, in and of themselves, become too big. Therefore, with or without FDIC backing, the FED/Treasury will “blink” again and bail, baby, bail.

    This whole messy approach started with Greenspan when he didn’t let LTCM (not an FDIC issue at all) fail in the ’90’s. We have been following the same play book ever since.

    I am convinced the only solution is to break these operations up, maybe under anti-trust regulations, as it appears the large institutions are controlling/manipulating the markets: and irony of irony, many with taxpayer monies.

  4. Cos Cobber
    April 26, 2010 at 4:45 pm

    Great. All you have done is push these products overseas. Get ready to trade commodities Singapore.