The Late, Late, Late Government Shutdown Megathread

[crazy canuck]

Meh, people are getting used to the US government shutting down or the risk of it happening.  Its the new normal.

[KRonn]

It's not really a government shutdown. That phrase is way over used, usually for political purposes to scare people and such. Just a small portion of government services are shut down and it's likely that some of those can remain open but the pols like to make a "shutdown" as visible as possible.

[The Minsky Moment]

2- since banks proved they couldn't be trusted to act in their depositors' best interests with respect to swaps and security-based swaps,

Which banks, which swaps?
AIG had huge problems with CDS, but they are not a bank.

[Siege]

All right, so now that Elizabeth Warren (D-Harvard) and Ted Cruz (R-Harvard) have had their say...what's the verdict?

[Eddie Teach]

.what's the verdict?

That Siege is a perv.

[Berkut]

This isn't even a case of something bad could happen, this is a case of something bad already did, and the crybabies want to gut the safety net that was built in response because it's hurting their marketing efforts and thus their profit.

Sorry dude, I'll take businesses not being able to go to banks as a "one-stop shop" over risking another repeat of the 2008 meltdown any day.

Do you know what Dodd-Frank did to derivatives, and what this amendment would change?

Is there any practical reason to believe that there is some good reason for this amendment from the perspective of anyone other than banks and the politicians they've purchased?

Perhaps I am overly cynical, but I think I can safely predict that any deregulation desired by giant banks and supported exclusively by Republican politicians and opposed by the likes of Elizabeth Warren is probably something bad for everyone else.

I could be wrong of course - and would love to hear why in this case it is actually a good repeal of un-needed restrictions.

[Admiral Yi]

Is there any practical reason to believe that there is some good reason for this amendment from the perspective of anyone other than banks and the politicians they've purchased?

Perhaps I am overly cynical, but I think I can safely predict that any deregulation desired by giant banks and supported exclusively by Republican politicians and opposed by the likes of Elizabeth Warren is probably something bad for everyone else.

I could be wrong of course - and would love to hear why in this case it is actually a good repeal of un-needed restrictions.

As Joan mentioned in this thread, not a single bank failed during the 08 crisis because of exposure to derivatives.

People have linked stories about the way the Frank-Dodd limitations on fees banks can charge customers on things like overdrafts and debit card transactions have led some banks to raise the minimum balance required to avoid a maintenance fee.  That is a loss for people who don't write overdrafts or use their card for debits.

There has also been discussion of the way in which the exhaustive reporting requirements of Sarbanes-Oxley have led to the increase in the private equity form of ownership and the movement of public issuance away from New York to overseas exchanges.  This is presumably a loss for the American investor.

I don't know enough about this particular amendment to comment on whether it is a net benefit to the public or not.  But it is certainly true that not all regulations are unalloyed benefits for the public.

[The Minsky Moment]

I don't approve of this crammed-in amendments, but it's all a bit of a tempest in teapot re D-F. Banks got into trouble in 08-09 because of overleverage and contagion from troubled counterparties.  And the day will come when they will get in trouble again for similar reasons.  Tinkering around with different product category permissions isn't likely to change much.