Comments on: The Volcker Rule under threat A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: y2kurtus Mon, 08 Nov 2010 18:31:08 +0000 #1. Increased capital requirements are very needed and positive.

#2. Ditto increased liquidity requirements

#3. Also a pretty good idea to move derivitive trading to some kind of exchange. Transparency makes problems easier to spot sooner rather than later (as was the case with AIG)

Beyond that why on earth would you want to limit the financial activities of “banks.” Citi use to be in the business of speculating in the oil markets to the extent that at one point it had dozens of super-tankers chartered and filled with oil waiting for the price to rise. That made them a profit and when private sector demand for oil increased there were additional barrels to sell (presumabley lowering the market price at the time of the sales.) That strikes me as a valuable servivce to the broader economy. Others may disagree.

Private equity, venture capital, hedge funds… these all serve a function or they would not exist. Why stop banks from offering services in these areas if adaquite capital is held in reserve?

By: Kaitain Mon, 08 Nov 2010 06:38:34 +0000 Penultimate paragraph is extremely well put. Saying that rule change X will likely result in lower profits for the banks is not in itself an argument against X. I mean, cracking down on monopolies tends to result in lower profits for monopolies. I know that not all profits represent win-lose economics, but in the case of the banks over the last twenty five years there is good reason to believe that their gain has indeed been our loss: they’ve been profitable precisely because they’ve externalized the cost of risk onto the taxpayer. As their primary function is, when you boil it down, risk-assessment, this is a pretty substantial shortcoming.

By: scrypton Sun, 07 Nov 2010 10:06:15 +0000 If they want to pack it up and move let them. Maybe it won’t be so cozy away from Wall Street, and no Americans will want to do business with them either. I say good riddance. Let them go ruin someone else’s economy.

By: Acetracy Sat, 06 Nov 2010 12:17:05 +0000 Someone needs to point out to Congress and the Treasury what prop desks, hedge funds and flash trading are doing to the financial markets: Creating the biggest casino in the world.

Here are some salient points that are facts, not exaggeration.

1) Program trading throughout 2009 constituted over 50% of the daily volume on the NYSE. Among those program trades, Goldman was nearly 80%. Who wants to ‘invest’ their money in a market rules by day traders? No one. No wonder the equity markets still see the fewer and fewer investors.

2) Leverage is the catalyst of all boom/busts and should be strictly controlled by the Fed. FX traders can still leverage 10 to 1 (and higher); hedge funds still do naked shorts; margin requirements on bonds is way too low. The Fed should raise margin requirements across the board on equities, bonds, futures, FX trading, etc.

3) Tax Code: The lowest tax rates in the US Federal Tax Code is given to index options writers. They only pay 10% tax rate on their premiums from writing these contracts. Think about that. One of the most speculative trades is awarded the lowest tax rate. Furthermore, short term tax rates should have brackets for 24-hour trades (tax these at 90%), anything under a year (tax these at 70%).

By: DanHess Fri, 05 Nov 2010 22:30:59 +0000 @yr2009 — The GOP has its ties to big banks, I totally agree. But this idea that the GOP is the main participant in the Wall Street lovefest is the fallacy that will not die.

The whole NY delegation in both houses is Democrat. Democratic king Charles Schumer (who almost was the next majority leader) is Wall Street’s big man in Congress, and he spread banker money to Dems from sea to shining sea.

As Ritholz has lamented, we got fake reform. Gee, who write this gentle reform?

By: yr2009 Fri, 05 Nov 2010 18:39:29 +0000 When push comes to shove, who is the GOP loyal to? – Its voter, or the banks who financed its campaign?

GOP leaders should know that many people who voted for them are rather skeptical about their integrity and capabilities, and will be watching every move they make in the next 18 months.