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kirkydu (93.62)

Fixing the Financial System in One Tiny Blog

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January 13, 2010 – Comments (6) | RELATED TICKERS: BAC , GE , GS

Mortgages: 5% down on first home.  10% down on second home.  20% down on third home.  No more than 33% debt to income ratio on all loans.

Credit Cards: If the credit card company thinks they need to charge more than 18% they can't issue the card, in other words, cap interest rates at 18%.  We limit loan sharking, we can limit credit cards too.  Also, aggregate revolving credit limit can't exceed income.

Banking (oh boy, subsections):

Bring back Glass-Stiegel.

Tier one capital can not include subsidiary reserves if the subsidiary is operating outside the rules the bank has to follow. 

Leverage limited to 6:1. 

Executive and management compensation can not exceed 15% of gross profits (really should be all non-owner run companies). 

Fed must stop paying interest on reserves.

Investment Banks (teee heee, more subsections):

Leverage limited to 12:1 (like it used to be).

Bring back pre-2000 regulation of derivitives and mandate that investments sold to the public be on an exchange.

No more bailouts, only gov'ment take-overs for purpose of firing people, cleaning up and selling off the business.

Executive and management compensation can not exceed 15% of gross profits (really should be all non-owner run companies). 

Pay taxes in country where investments and trading take place (Call this the Goldman Sachs clause if you like, why on earth are they barely paying any U.S. taxes???)

Ratings Agencies:

Advise or rate, not both.

Ratings subject to professional standards, not freedom of speech silliness (heck, even brokers have some professional standards).

 

Yeah, yeah, there's more, but this is the backbone we need to avoid a lot of the greed driven predatory capitalism, stupidity and outright criminal behavior we have seen.

Good Read: Stunned in America: The Sub-Crime Mortgage Crisis.

http://www.amazon.com/Stunned-America-Sub-Crime-Mortgage-Crisis/dp/1449008372

 

 

 

6 Comments – Post Your Own

#1) On January 13, 2010 at 2:09 PM, FleaBagger (29.19) wrote:

Fixing every aspect of the economy in two-and-a-half words: Let 'em fail.

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#2) On January 13, 2010 at 2:12 PM, Tastylunch (29.22) wrote:

make IB's go private back in partnerships again.

 

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#3) On January 13, 2010 at 2:45 PM, MotleyPicker (< 20) wrote:

Good as far as it goes, but doesn't go far enough:

Fix currency exchange rates and disassemble the FED.

Cap off the FreddieMac/FannyMae debacle now.

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#4) On January 13, 2010 at 2:50 PM, catoismymotor (39.77) wrote:

FleaBagger is my hero.

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#5) On January 13, 2010 at 4:19 PM, ocsurf (< 20) wrote:

FleaBagger said it all.

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#6) On January 14, 2010 at 9:29 PM, kirkydu (93.62) wrote:

agreed with "let 'em fail" but I said it the long way I guess:

"No more bailouts, only gov'ment take-overs for purpose of firing people, cleaning up and selling off the business."

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