Wednesday, October 17, 2012

Step Right Up, The Magical Mystery Money Tour Is Hoping To Take You Away

The New York Times' Deal Bo/ok, under the headline Before British Parliament, Volcker Pushes for Tougher Banking Rules, reported -  If complicated financial trades have a benefit for the wider economy, the former American Federal Reserve chairman from 1979 to 1987, Paul A Volcker isn’t sure he has seen it. ‘‘The economic and social value of much of the trading and innovative financial engineering is questionable,’’ Mr. Volcker said during almost two hours of testimony at a British parliamentary commission on Wednesday.

Alan Greenspan & Paul Volcker
According to The Times Mr. Volcker was invited to address the commission investigating recent British bank scandals. Apparently paraphrasing, without quotes, The Times prints - He said if left to their own devices banks would find ways to intertwine their trades for their own accounts with the retail businesses, in potentially dangerous ways.

The Times continues - His statements came as United States authorities move closer to enacting the so-called Volcker Rulewhich would restrict the ability of banks with federally insured deposits to trade for their own benefit. 
Crowd at Wall and Broad streets, 1929

The Times states - Banks and other Wall Street firms have fiercely opposed the proposed legislation, and have lobbied hard to alter how it would be put in place. And - When asked by British politicians whether those changes have watered down the measure’s effectiveness, Mr. Volcker dismissed the concerns.

No doubt lobbying for the removal of restrictions was lobbied for as hard as their previous removal was fought for. Why can't things just move to the next step of bankrupting lobbyist owned banks? And who wouldn't sound naive in this world's tailspin of responsibility hidden data?

But Mr. Volcker said, ‘‘I don’t believe that the thrust of it has been chipped away,’’ as quoted by The Times.

So - British regulators have proposed similar rules to cordon off firms’ retail operations from their riskier investment banking units. 

While - Mr. Volcker expressed doubt that such a system would work, as firms would continue to look for ways to combine their different operations in an effort to reduce cost and increase profitability.

Like water seeping through cracks, it's easy to be pragmatic but not about fixing how money is handled. Maybe let people steal as much as they want, as the problem really seems to be the hiding of that keep it of circulation. Especially since banks aren't paying squat in interest rates on savings, or is that just the common people's problems. You know, those with less than hundreds of thousand of dollars that a couple of generations ago supported people living on their interest savings. Mr. Volcker, remember inflation you made your reputation on being concerned about? Ah.

Then Mr. Volcker, dealing what we're professing to face, is loosely quoted by The Times as saying -  The division between banks’ businesses ‘‘tends to break down over time because of pressures from the institution itself. If you want to keep them separate, you should put them in two different organizations.’’ 

The Times report then cites the mistakes and notes - The British commission that heard Mr. Volcker’s testimony is expected to hear from other prominent finance officials, including Martin Wheatley, the chief British regulator, and Martin Taylor, a former Barclays chief executive.

So to wrap up The New York Times' Deal Bo/ok prints - Andrew Tyrie, the British politician leading the parliamentary panel, joked that Mr. Volcker could be in London to discuss taking over as the new governor of the country’s central bank, Bank of England as Mervyn A. King, Britain’s current central bank chief, will step down from his post next year.

Mr. Volcker smiled and said he was too old to become the Bank of England’s new head. ‘‘It’s a job for someone younger than 85.’’ 
Yeah. When it comes to money, we don't lack for entertainment. It's the circulation that has us bunched up in pain.

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