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6/25/10 Midafternoon Report: New finance legislation may cause banks to find different ways to screw customers

June 25, 2010 – Comments (0) | RELATED TICKERS: RIMM , MLNK , QCOR

The market is up today after congress reached an agreement on legislation to better regulate the financial services industry after only two short years of debate and an economy that people have less faith in than Scientology.  The legislation, being called the Dodd-Frank bill (and Money McBags only laments that Senator Tim Johnson did not sponsor the bill instead of Senator Dodd and thus we could have had the Johnson-Frank bill), was watered down though as politicians were worried it might actually accomplish something so they unanimously decided take out anything that might cause someone to change anything meaningful that they do.  If passed, the new laws will include the creation of a Consumer Financial Protection Bureau (whose first rule of action will be to tell people to stop borrowing so much f*cking money), a requirement for banks to segregate their derivatives portfolios by doing more than just creating separate water fountains for them on the trading floor (though banks are still allowed to use derivatives to hedge, still allowed to trade currency and interest rate swaps, and still allowed have a few years to move their CDS into capitalized subsidiaries, so suck on that Blanche Lincoln), and a monthly reminder to be delivered by Timothy Geithner to stop f*cking so much sh*t up.  What the legislation doesn't do is restrict the size of banks and thus banks still have ability to grow too big to fail (which is the only way banks won't fail).  The most controversial act though was the Volcker Rule which was supposed to limit banks from proprietary trading through bank owned investment vehicles for the near future until banks could find loopholes around it.  Luckily, they won't have to waste their valuable time finding loopholes as the rule now merely limits banks' ability to invest in these kind of investment funds to no more than 3% of a bank's tangible equity or 3% of a fund's capital, so bankers can go back to spending their time dreaming of AnnaLynne Mccord and new products to be used for predatory lending.  

While agreement on legislation that may or may not turn in to law and may or may not be affective (and Money McBags will bet on the "may not" if anyone wants to take the other side) dominated the news today like the winner of a NSFW Ultimate Surrender match dominates her conquered foe (though the news domination involved many fewer dildos), the government managed to sneak in a downward revision of GDP.  Due to consumers spending less than the Commerce Department previously guessed, GDP for Q1 was lowered from 3% growth to 2.7% growth which wouldn't be a terrible number if the economy weren't coming back from nearly going to 0.  Finally, consumer sentiment rose according to the University of Michigan's survey thanks to the one employed person in the state of Michigan the University found to answer their questions.

Internationally, not a lot was going on today as world financial leaders spent their day trying to get through customs in Toronto.....READ MORE....