# Are we going to have a strong financial reform law? **URL:** \ **Category:** Great Debates\ **Created:** [April 15, 2010, 5:24am UTC](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173 "2010-04-15T05:24:44Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![China\_Guy](https://avatars.discourse-cdn.com/v4/letter/c/779978/32.png) [@China\_Guy](https://boards.straightdope.com/u/China_Guy)\ **Post date:** [April 18, 2010, 1:10am UTC](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173/21 "2010-04-18T01:10:07Z")
> [@pancakes3](#): > > uh, really? i’m not an ibanker but i was under the impression that the derivatives market is rather important to hedging risk. even if it’s not, it seemed like a fairly innocuous and half-hearted attempts for money managers to seek arbitrage in a sea of noise. > > the recession was brought on by the bottoming out of one very small piece of the derivatives market - toxic repurposed credit derivatives. as a result, the entire derivatives market is going to be shut down? i don’t see the logic behind that. Key point is that derivatives \*can \*be used to hedge, and they \*can \*also be used for leveraged risk amplifying bets. [Saint-Etienne Swaps Explode as Financial Weapons Ambush Europe](http://www.bloomberg.com/apps/news?pid=20601109&sid=a30KHZKX1WJo). this Bloomberg story will give you an idea of why this is much bigger than just US housing bubble gone bad. Small European towns getting a $100k in lowered financing costs that ends up costing them tens of millions of dollars. Also you should read the vanity fair excerpts from Michael Lewis’ [The Big short](http://www.vanityfair.com/online/daily/2010/04/michael-lewis-tk.html). ---
**Author:** ![China\_Guy](https://avatars.discourse-cdn.com/v4/letter/c/779978/32.png) [@China\_Guy](https://boards.straightdope.com/u/China_Guy)\ **Post date:** [April 18, 2010, 3:53am UTC](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173/22 "2010-04-18T03:53:39Z")
And it’s not like this is new. Remember the [Orange Country](http://merage.uci.edu/~jorion/oc/case.html)$1.6B derivatives loss bankruptcy? Here’s a case study. ---
**Author:** ![Cisco](https://avatars.discourse-cdn.com/v4/letter/c/ccd318/32.png) [@Cisco](https://boards.straightdope.com/u/Cisco)\ **Post date:** [April 18, 2010, 6:22am UTC](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173/23 "2010-04-18T06:22:55Z")
[All 41 GOP Senators United in Opposition to Financial Reform Bill](http://www.cbsnews.com/8301-503544_162-20002732-503544.html?tag=mncol;lst;2) > [@](#): > > All 41 Republican senators have signed a letter to Senate Majority Leader Harry Reid saying they are opposed to the financial regulation bill put forward by Democratic Sen. Chris Dodd, Senate Republican Leader Mitch McConnell’s office announced today. > > The letter calls for further negotiations, but it does not go as far as to say all 41 senators would support a filibuster of the legislation. > > Republicans had sought to send Democrats a letter threatening a filibuster of the financial reform bill, but Sen. Susan Collins of Maine would not sign onto the letter, the Hill reports. ---
**Author:** ![hobscrk777](https://avatars.discourse-cdn.com/v4/letter/h/a6a055/32.png) [@hobscrk777](https://boards.straightdope.com/u/hobscrk777)\ **Post date:** [April 18, 2010, 4:20pm UTC](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173/24 "2010-04-18T16:20:59Z")
At this point I’m wondering what GOP Congresspeople are doing that couldn’t just as easily be accomplished by marking down 41 “No” votes on any piece of legislation that changes the status quo. Think of the potential savings! ---
**Author:** ![Digital\_Stimulus](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@Digital\_Stimulus](https://boards.straightdope.com/u/Digital_Stimulus)\ **Post date:** [April 18, 2010, 4:52pm UTC](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173/25 "2010-04-18T16:52:26Z")
I was gonna open a GQ thread about the upcoming bill, but figured this thread might be sufficient – what are the Republicans’ objections to the bill (preferably specific, but even general)? I understand that one objection, mentioned in **Cisco** ’s link, concerns the creation of “a $50 billion bank liquidation fund”. While I don’t see that as being much different than the way the FDIC is funded (I think), fine – that’s a specific point that can be examined and debated. But the prevalent objection seems to be [take the bill back to the ‘drawing board’](http://www.google.com/hostednews/ap/article/ALeqM5hkBdbPhhaFH4oopDf_0ehjLmXnDAD9F5GTS80), which is simply crap. Oh, BTW, [all 41 Republicans have pledged to filibuster](http://www.huffingtonpost.com/2010/04/16/unified-gop-to-block-sena_n_540823.html) (see Update 1). ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [April 18, 2010, 5:05pm UTC](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173/26 "2010-04-18T17:05:27Z")
Gonna be tough. First off, you got your Clintonista, centrist, business friendly Dems who are beholden to Big Money. Not as beholden as a Pubbie, kinda like an indentured servant compared to a slave, but still. Remember, the Supremes clanged the dinner bell for corporations to pursue their civic virtue by generous contributions! Nice little incumbency you’ve got here, shame if anything were to happen to it. And they wouldn’t even have to show their colors, they can cut a deal to simply not support it as strongly as they might. Then you’ve got the awesome persuasive power of money. As Mark Shields said Friday, every lobbyist not currently under indictment, or in prison or de-tox is being hired. Mighty bucks were spent trying to stymie HCR, but you ain’t seen nothing yet! We’re talking great hulking wads of raw cash, Godzillabucks. They’ll take hostages! Impossible to paint the Pubbies as the protector of the proletariat against the running dog jackals of Wall Street? Maybe. But they’re sure as shit gonna try! ---
**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\ **Post date:** [April 18, 2010, 5:43pm UTC](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173/27 "2010-04-18T17:43:00Z")
Not as long as Geithner’s Wall Street buddies are around! The Dems are every bit as corrupt as the republicans, in this area. We’ll see how the fraud charges against Goldman Sachs pan out… ---
**Author:** ![Lakai](https://avatars.discourse-cdn.com/v4/letter/l/9de0a6/32.png) [@Lakai](https://boards.straightdope.com/u/Lakai)\ **Post date:** [April 19, 2010, 1:08am UTC](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173/28 "2010-04-19T01:08:41Z")
> [@elucidator](#): > > Then you’ve got the awesome persuasive power of money. As Mark Shields said Friday, every lobbyist not currently under indictment, or in prison or de-tox is being hired. Mighty bucks were spent trying to stymie HCR, but you ain’t seen nothing yet! We’re talking great hulking wads of raw cash, Godzillabucks. They’ll take hostages! Mark Shields is a smart man. What gives me hope that the Godzillabucks won’t take this time is that Chris Dodd is retiring, so he doesn’t need reelection money. Also Teddy Roosevelt got the anti-trust bill passed at the height of the Gilded Age, so it is possible to take on the financial interests and come out on top. Obama needs to channel his inner Teddy or FDR. I suspect the Democrat’s strategy will be to eliminate the $50 billion liquidation fund and see if any Republicans will then bite. [Geithner](http://www.politico.com/news/stories/0410/35960.html) seems pretty confident that the bill will get GOP votes. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [April 19, 2010, 1:33am UTC](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173/29 "2010-04-19T01:33:10Z")
Even the Tea Partiers will bail on the Repubs if they block this one. Most American want something done to give the Financial Sector a little pain for the disaster their theft caused. I think McConnel is making a mistake. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [April 19, 2010, 3:15am UTC](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173/30 "2010-04-19T03:15:03Z")
But the question isn’t whether something will be done. It’s whether there’ll be strong financial reform. It’ll be easy for Republicans to direct any reform into directions that have a lot of bells and whistles but no teeth. And as elucidator and ralph wrote, the Democrats won’t be pushing very hard in the other direction. When the dust settles we’ll have some paper reforms that people can claim solved the problems regardless of whether it really changed anything. ---
**Author:** ![E-Sabbath](https://avatars.discourse-cdn.com/v4/letter/e/e19adc/32.png) [@E-Sabbath](https://boards.straightdope.com/u/E-Sabbath)\ **Post date:** [April 19, 2010, 4:28am UTC](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173/31 "2010-04-19T04:28:50Z")
Yes, but the Republicans seem to be set on a motif of ‘No, no. You have to tear what you have up and start over to be bipartisan!’ And that isn’t going to fly. ---
**Author:** ![Dick\_Dastardly](https://avatars.discourse-cdn.com/v4/letter/d/c4cdca/32.png) [@Dick\_Dastardly](https://boards.straightdope.com/u/Dick_Dastardly)\ **Post date:** [April 19, 2010, 1:00pm UTC](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173/32 "2010-04-19T13:00:34Z")
> [@Lakai](#): > > Mark Shields is a smart man. What gives me hope that the Godzillabucks won’t take this time is that Chris Dodd is retiring, so he doesn’t need reelection money. Also Teddy Roosevelt got the anti-trust bill passed at the height of the Gilded Age, so it is possible to take on the financial interests and come out on top. Obama needs to channel his inner Teddy or FDR. > > I suspect the Democrat’s strategy will be to eliminate the $50 billion liquidation fund and see if any Republicans will then bite. [Geithner](http://www.politico.com/news/stories/0410/35960.html) seems pretty confident that the bill will get GOP votes. What is Dodds going to do when he retires? What is Geithner going to do with himself when he’s no longer the Treasury topper? Both bills are written by banking lobbyists anyway so whether they include a liquidation fund or not or whether they include or leave out some other thing is just kabuki. If the legislation doesn’t include laws on how big firms can be and how much leverage they can operate it won’t be worth the paper it’s written on, and it won’t. ---
**Author:** ![Lakai](https://avatars.discourse-cdn.com/v4/letter/l/9de0a6/32.png) [@Lakai](https://boards.straightdope.com/u/Lakai)\ **Post date:** [April 22, 2010, 5:17am UTC](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173/33 "2010-04-22T05:17:18Z")
It looks like the GOP is going to play ball [after all](http://www.washingtonpost.com/wp-dyn/content/article/2010/04/21/AR2010042105418.html): > [@](#): > > Key members of both parties said Wednesday that they are close to agreeing on the main elements of a bill to overhaul the nation’s financial regulations, raising the prospect that the Senate could begin formal discussion of the landmark legislation early next week. > > “I’m more optimistic than I’ve ever been,” said Sen. Richard C. Shelby (Ala.), the lead Republican negotiator. “I think we can put a bill together pretty soon.” His counterpart in months of talks, Sen. Christopher J. Dodd (D-Conn.), chairman of the banking committee, agreed that they were on the cusp of a consensus. Republicans are going to spin this progress as their fault: > [@](#): > > Republicans said progress on the bill was due to the unified position taken last week by all 41 Republican senators, who warned that they could vote as a bloc against the legislation. In reality Obama/Reid called their bluff and now they’re backpedaling. Obama is due to give a speech tomorrow on financial reform (now cleverly referred to as wall street reform by democrats) and a test vote will take place on Monday. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [April 22, 2010, 6:29am UTC](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173/34 "2010-04-22T06:29:32Z")
Wasn’t it only about a week or so ago that the only question was whether Obama would sign the Articles of Surrender to the Republicans in the Rose Garden or in the Oval Office? ---
**Author:** ![ElvisL1ves](https://avatars.discourse-cdn.com/v4/letter/e/5daacb/32.png) [@ElvisL1ves](https://boards.straightdope.com/u/ElvisL1ves)\ **Post date:** [April 22, 2010, 12:13pm UTC](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173/35 "2010-04-22T12:13:16Z")
> [@Lakai](#): > > In reality Obama/Reid called their bluff and now they’re backpedaling. But they’re being allowed a [cover story](http://www.boston.com/news/nation/washington/articles/2010/04/22/senate_moves_closer_to_passing_financial_overhaul/), however threadbare: > [@](#): > > Republicans said that they had forced Democrats back to the bargaining table to negotiate a bipartisan accord, while Democrats said that Republicans were hastily abandoning their opposition in fear of public outcry. > > With President Obama headed to New York City today to press the case for tougher rules for Wall Street, Senate Republicans reported progress in negotiating changes to the bill. But they did not point to any specific concessions they had won and Democrats said they made none. ---
**Author:** ![Dick\_Dastardly](https://avatars.discourse-cdn.com/v4/letter/d/c4cdca/32.png) [@Dick\_Dastardly](https://boards.straightdope.com/u/Dick_Dastardly)\ **Post date:** [April 22, 2010, 12:46pm UTC](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173/36 "2010-04-22T12:46:30Z")
If the GOP are agreeing to support a bill then that means the banks got everything they wanted. As far as we currently know the only area where there may be effective new regulation is the regulation of derivatives but let’s see what the final bill looks like, how it works in practice and how much loosening of any effective new regulation the bank lobbyists can wrangle two or three years down the line. What I can say with absolute certainty is that the really important stuff to regulate won’t be. OK, not absolute certainty but as near as you can get. The only time I’m ever wrong about these people these days is when I’m not cynical enough. ---
**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\ **Post date:** [April 22, 2010, 5:09pm UTC](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173/37 "2010-04-22T17:09:05Z")
[www.drudgereport.com](http://www.drudgereport.com) It seems that Obama has hosted the president of G-S 4 times this past year…and will not return the campaign contributions from G-S. Anybody who thinks Obama intends ANY serious regulation of G-S (and firms like it) are smoking crack! :mad: ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [April 22, 2010, 7:06pm UTC](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173/38 "2010-04-22T19:06:04Z")
So Goldman/Sachs head honcho goes to see Obama, it therefore follows that Obama will allow him to write the bill? The evil is that the wealthy have access to the White House. But whether Obama caves is yet to be proven. It distills down to campaign finance reform. We need public funding. As long as campaigns cost 700 million to run, the candidates will have to come to the rich to fund them. They don’t give their money away without strings. It disenfranchises the poor and middle class. We have no access or input. The present campaigns help TV, newspapers and TV news stations. The corporate conglomerates are quite happy with the system as it is. It would be very difficult to fix.They will not permit the opponents to have time to air their side. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [April 27, 2010, 5:18am UTC](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173/39 "2010-04-27T05:18:26Z")
[Republicans block debate of finance rules reform](http://news.bbc.co.uk/2/hi/business/8644952.stm) ---
**Author:** ![theR](https://avatars.discourse-cdn.com/v4/letter/t/977dab/32.png) [@theR](https://boards.straightdope.com/u/theR)\ **Post date:** [April 27, 2010, 1:14pm UTC](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173/40 "2010-04-27T13:14:25Z")
> [@Little\_Nemo](#): > > And where is the push for reform supposed to be coming from? People can be convinced thay have a direct interest in issues health care or national security but financial reform seems like an abstract issue to most voters. [http://www.washingtonpost.com/wp-dyn/content/article/2010/04/26/AR2010042601969\_pf.html](http://www.washingtonpost.com/wp-dyn/content/article/2010/04/26/AR2010042601969_pf.html) > [@The Washington Post](#): > > About two-thirds of Americans supported stricter regulations on the way banks and other financial institutions conduct their business, according to a Washington Post-ABC News poll. Majorities also backed two main components of pending Senate bill: greater federal oversight of consumer loans, and a proposed fund paid for by the financial industry that would go toward dismantling failed firms that put the broader economy at risk. [Previous page](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173.md?page=1) [Next page](https://boards.straightdope.com/t/are-we-going-to-have-a-strong-financial-reform-law/536173.md?page=3)