大象传媒

Too big to fail?

Nowhere in the world is this huge problem being tackled. It is as though whilst we all recognise that it is a problem everyone is hoping that it will go away through benign neglect. It won't. Financial institutions that are so large that their failure would bring about the catastrophic collapse of the whole system have grown stronger since 2008 and more able to blackmail the countries in which they operate.

Regulation and the protection from competition that regulation creates has created these Monsters of Financial Destruction, and yes, these MFDs do exist!

Regulation will need to solve the problem and this can only be achieved through dismantling these MFD. My current pet scheme is to modify the taxation regimes so that it is more advantageous to be a minnow (relatively speaking) in the financial sea rather than a leviathan. Regulation will also be required to stop these new smaller institutions re-merging or even working in a cartel.

We will also need to separate the gambling activities from banking. Perhaps this can be achieved by making their gambling contracts unenforceable at law.

Neither side of the Atlantic has started seven realistically looking at these problems yet. The legislation exists in the anti-trust area - all we need to do is use it.

Well, Robert hadn't you noticed President Obama has become more and more annoyed with the bankers he branded them as shameful.

In the US unemployment and social security payments are only available for a total of 5 years over a lifetime (correct me if I am wrong) and with unemployment being so high, I believe he has been signing temporary, 6 month extensions to ensure people don't starve. While the bankers that caused the mess earn buckets of money!

He has to take action on the banks. Americans are so angry with the banks it makes even the angriest on this blog look happy!

If he can't get his healthcare bill passed, then there will be another huge crash that will spread around the globe again. This time with the insurance companies at the centre - as I am sure you are well aware. There are traders gambling on that crash happening.

This is not only a beginning at reducing the power of banks but a warning shot to other institutions that are posing similar economic threats to the stability of the US (and the rest of us).

If the banks are to be left as this, can any country afford the loss?

Anyway, it's curious that Obama is making his new assault on the structure of banks on the day that the world's most successful investment banks, Goldman Sachs, is announcing its results for 2009.

You are ever so cute when you play dumb, Robert...

Always a pleasure to see the ruling class divided.

Finance is a necessary part of capitalism.
But the problem of the last few decades has been the huge amounts of fictitious capital generated by the financial sector.
Problem because this hides the reality of the true fall in the rate of profit & is not sustainable - in postponses the necessary devaluation at the cost of a larger one in the future.

But because the economists don't have an objective foundation for value they don't see this (I accept that the monetarists, who also don't have an objective foundation of value, do at least sense it from the fact of fiat money).
The politicians have short time horizons so they are quite happy to see disaster postponed (even though they think they are resolving problems).

The ruling class is in a no win situation.
Capital will have to be devalued at some point to restore the true productive rate of profit.

The more shackles placed upon finance the sooner the end of the Ponzi scheme & the collapse of capitalism.

"Robert wrote: Well one cause of the global financial crisis was that commercial banks were stuffed to the gunnels with AAA-rated securities created out of poor quality US housing and corporate loans that turned out to be junk - and losses running to many hundreds of billions of dollars on these securities mullered their capital and were a significant contributor to the near-collapse of the financial system.

And, in the past year, the recovery in the price of these securities has generated massive profits for the banks that survived thanks to taxpayers' generous bail-outs - thus helping them to pay out those big bonuses that don't seem to be all that popular with ordinary non-banking folk."

I've been telling people who ask me since the crisis started that the so called toxic bonds are not valueless...just that they could 'marked to market' (or in other word sold at any price) Don't throw them away I said. Well now it appears they can be valued at some price and maybe even traded. But then was always the credit swap market behind the bike sheds.

Do tell us more Robert!

鈥淲ell one cause of the global financial crisis was that commercial banks were stuffed to the gunnels with AAA-rated securities created out of poor quality US housing and corporate loans that turned out to be junk鈥�

And, in the past year, the recovery in the price of these securities has generated massive profits for the banks..."
=========================================

Well, which was it 鈥� were they junk or weren鈥檛 they?

Or is it that they 鈥渢urned out to be junk鈥� and then 鈥渢urned out not to be junk鈥�.

Or maybe it鈥檚 that the interaction of mark to market accounting rules and regulatory capital is such that a viscous cycle is set up in the event of a short term liquidity crisis, with unrealised m-t-m losses on securities causing a reg cap squeeze, leading to forced sales of securities resulting in more m-t-m losses etc.

Doesn鈥檛 sound quite as snappy as phrases like 鈥淯S housing and corporate loans that turned out to be junk鈥� and 鈥渕ullered their capital鈥� though, does it?

If Goldman are doing "God's work", just think what a favour they'd to the banking PR if they just donated $641m to haiti and wrote off their debt.

However as we all know this just won't happen.

Robert - para 6, it's 'the White House'. I think you've done this before!

"And here's an interesting and resonant statistic about the balance of financial power in the world: just one thirtieth of what Goldman is likely to pay its staff is equivalent to all the debt (of $641m) that Haiti owes the rest of the world."

------------------------------------------

It's not "interesting and resonant"....it's obscene.

I think you need to travel across the USA Bobby (miss out NY and Cali), and and have a look at all those small, non-descript places which were encouraged to borrow like crazy and built shopping malls, condominiums and office blocks like there was no tomorrow.
So many are now empty or incomplete, with no objective prospects of recovery.

The nefarious US banks and Fanny/Freddy(even worse than our clueless RBS & BoS) poured money into any and all speculative developments and have wrecked the system. The current HFT crimes being perpetrated against the pension funds and savers is merely the icing on the cake.

Obama is looking down the barrels of a bankrupt nation who seem to understand the true position -a damn sight more than people here in the UK- and are mightily pissed off with their government and Fed for bailing out the bankers. Obama knows that if he doesn't do something decisive, the Democrats will lose the mid-term elections, he will become a lame duck, and will untimately lose his second term.

Hopefully it will be interesting, especially if Volcker has his ear...
Mind you, he then has to talk Congress into not diluting the medicine.

Regards,

Not only is there nothing wrong with "market colour" but exactly that sentiment is used every day by people trading and haggling in markets for real good around the world. It is nothing more than some having a product which they think is worth a 拢1 per item but managing to sell it at 拢2 an item.

Lets assume Obama restricts proprietory trading - not merely increase capital cost, but actually lay down detailed restrictions. What is the most likely effect?

US investment banks move their trading desks out of US possibly beef up the London operations. There is an old saying about those who do not study history are doomed to repeat it. The Eurocurrency markets came into existence because of US rules and restrictions.

Now I not commenting on whether proprietory trading is a good or bad thing merely the most likely response of US institutions

Thanks again, Robert, for staying focused on the very real, major financial forces that determine the fate of our economies: the big banks, the hedge funds, the colluding pension funds, the (mis)rating agencies, etc. Unfortunately these unelected, greedy profiteers have often more influence than elected governments in determining the rise and fall of economies. Keep on exposing the exploitative structures that always work in favour of the mega-rich and always empoverish the average tax payer.
Please find many more arguments and facts explaining the sickening world of the global (shadow) banking system here:

This sounds promising.

Let's hope Obama carries through with it.

I guess it should be seen as cutting up the "great vampire squid" into smaller bits, so that each tentacle cannot co-ordinate it's actions with the other tentacles....

As a US commentator has already suggested, there should be a limit of around $80bn (or 拢50bn) assets for all financial institutions - US, UK and worldwide - which would indicate Goldmans at $800bn needs to be broken up into around 10 component parts.

We need Morgan Stanley, Barclays, HSBC, Citibank, Bank of America and the rest of them treated in a similar manner.

鈥業s Obama trying to cut Goldman down to size?鈥� Well someone needs to.

As far as I can tell there are going to be significant tax rises this year.

Now assuming that you鈥檙e still in work, you鈥檙e going to get hit by tax rises.

Now it鈥檚 perfectly possible that you have a mortgage.

And it is also perfectly possible, that the increased taxes you have to pay to fund bailing out the banking sector, means you can longer keep up with your mortgage.

So the banking system having been bailed out by you, the taxpayer, now takes your house off you.


Now if that's reasonable, I don't want to be.

Here comes the real trouble.



from 3.5% to 4.95%, Just like that.

鈥溾�ne cause of the global financial crisis was that commercial banks were stuffed to the gunnels with AAA-rated securities created out of poor quality US housing and corporate loans鈥︹��

========================================
Some simplistic questions:

A. Why were the commercial banks 鈥渟tuffed to the gunnels鈥� with these securities?

B. Surely it cannot have been because the regulatory capital rules were such that it was more efficient (in terms of the amount of regulatory capital required) to hold these securities rather than the underlying loans, even though the credit risk is broadly the same?

C. Surely regulatory capital cannot be multiplied just by a bank taking a portfolio of loans, repackaging them as a security and selling the securities to another bank?

D. That would be ludicrous, wouldn鈥檛 it?

=============================
Somewhat simplistic answers:
A. because of the regulatory capital rules (see B)
B. Ummm, yes 鈥� sorry
C. Ummm, sorry 鈥� yes again (search for re-remicing, to discover more)
D. Ummm, don鈥檛 really know how to answer this one 鈥� perhaps you should ask the regulators鈥�

Obama can NOT do it! Goldman Sachs was the second biggest sponsor of his campaign after University of California with $1,591,395, they donated $994,795. Other big banks in the list include, Citigroup Inc, JP Morgan Chase & Co, UBS AG and Morgan Stanley.



It's all smoke and mirrors again.

The problem in banking IS THE WHOLE BANKING SYSTEM and tinkering with taxes and regulation is just a smoke-screen to placate the non-banking hoi-polloi while we are systematically robbed of our money.

We need less regulation in all things monetary:

1. Remove central banks monopoly on control of money supply.
2. Allow markets to set interest rates.
3. Allow competing currencies, with money issued by all banks, as well as allowing gold and silver to be legal tender.

Obama / Brown etc know which side their bread is buttered and will never do this as they are only in politics for what they can get out of it. They're not in the business of killing the goose that lays the golden egg.

#9. freemarketanarchy in response to Robert's point "one thirtieth of what Goldman is likely to pay its staff is equivalent to all the debt (of $641m) that Haiti owes the rest of the world" said "It's not "interesting and resonant"....it's obscene."

Well I'm not sure that obscene is the right word but I do find it incredibly worrying that a) Goldman has become that big and b) Goldman's management hasn't the intelligence to have already thought of that idea.

Cheers Robert. Keep it up. Always useful to know what's going on in the world of scum. Oops. I mean banking.

For god sake give up blaming the banks for all mess. Yes the traders took risks, but thats what they are paid to do. The banks didnt care about the risk because unlike the past, they just sold the debt on, and if you do that, why should you care about the level of risk. So the banks are to blame for not monitoring the risk responsibly.

The government loved all the tax dollars coming in from the banks, and all the investment and revenue they generated so they didnt care about capital ratios, or regulating risk or the selling of it to individuals as loans and mortagages. So they are to blame for not regulating the industry properly.

And what about you and me. Well if we hadnt been so bloody greedy in the first place, then would would not have taken on loans and mortagages that we could not afford, just so we could have a lovely new car or holiday, or extension to our house. All the greedy people out there that took out these loans are also responsible for the mess.

Its everybodys fault, mine, yours, the govenments and the banks. If we hadnt generated the demand for more and more easy cash and credit with the buy now pay later attitude then the market would not have been there for the banks to sell to.

So now we are all having to pay for it. Get over it.

However, banks that have only survived with the help of tax payers and/or less competition should not be paying bonuses. That's just immoral in the current climate.

Wee-Scamp comments: "Well I'm not sure that obscene is the right word"

I have to agree, I think a stronger word is required like 'sickening'.

The US financial system is profoundly undemocratic and resistant to any form of progressive regulation or break up.

Plamski raises an often forgotten point which refers to Obama's key corporate supporters. As long as the current nature of US election finance persists Corporate America will always ensure they have a vetted and 'safe pair of hands' to handle their interests at govt level.

This is as much a financial problem as it is a democratic one..

The bailout...remember the bailout, well a big part of that was the assumption of the bad debt created by the banks being taken over by the government, taxpayers. So profitability is much easier when you have given your bed loans to the government to pay and only kept the performing loans, plus the banks were given lines of credit backed by the govenments. Any business would be profitable if they could have the taxpayer assume their bad debt. Because banks, in collusion with each other, set the rates, would be called price-fixing in any other business, the entitity seek financing has no choice but to pay what these highwaymen charge. As to banks taking the money of the depositors and basically gambling them in the stock market, not to benefit the depositors but rather the shareholders, is gambling with someone elses money. In the past these were called con-men, now they are called financial services. There is a theory that states that competing systems become more alike over time. The West appears to becoming as corrupt as China.

21. At 1:21pm on 21 Jan 2010, MichaelBinary wrote:
For god sake give up blaming the banks for all mess. Yes the traders took risks, but thats what they are paid to do. The banks didnt care about the risk because unlike the past, they just sold the debt on, and if you do that, why should you care about the level of risk.
------------------------------------
If you sold tainted food or unsafe cars would that also be OK as you were paid to do it and regulation failed to stop you?

Goldman Sachs say their bonuses are down as a percentage of revenue, but it's the percentage of profits that really counts. That percentage is much higher (about 120%), which means share holders and pension funds lose out.
If bonuses are paid based on revenue, Goldman Sachs could even award huge bonuses whilst making a loss.

18. Wardy29

'The problem in banking IS THE WHOLE BANKING SYSTEM...'

Correct. Not so sure about your solutions, though.

1. Remove central banks monopoly on control of money supply.

They don't have a monopoly on the control of the money supply. They supply reserves (about 3% of the total money supply.) These reserves are important for maintaining confidence in money and its value as well as providing a means by which commercial banks can transfer deposits between each other.

2. Allow markets to set interest rates.

They generally do. Removal of the power of the BofE to set its rates would mean basically no monetary policy. Interest rates should reflect the costs of lending. Many of these costs are actually borne by the state, so that banking is always a massively state-subsidised industry!

3. Allow competing currencies, with money issued by all banks, as well as allowing gold and silver to be legal tender.

Legal tender is not a big deal. We can make contracts in any currency (or commodity) we like. Would you really make a contract in a non state-backed currency?

I would propose the following to start with:

1. Accept that money and banking are always creatures of the state. Ensure that banking is organised and run for the general public good. Profits to cover needed investment only.

2. Make transactions more transparent by conducting as many as possible through barter networks. (Quite a lot of B2B transactions happen this way already.)

Obviously messers Brown and Darling do not read your blog. Bet they are too frightened to!

Perhaps Obama thinks that the only way to stop this banking sleaze - Is to stop it and not just keep talking about it!

Apparently according to the WSJ Messrs. Obama and Volcker are scheduled to meet tomorrow in advance of a White House announcement.

It's very good news that Obama is listening to Volcker.

But if they are going to pretend that just strengthening the "chinese walls" that supposedly (jokingly) already apply inside banks is a sufficient measure, then the plan will be completely discredited.

They need to completely cut off the arms of all the Great Vampire Squids out there (but particularly Goldmans) that are effectively levying a tax on every single ordinary commercial transaction that uses OUR sovereign currencies.

According to WSJ "The proposal could have the biggest effect on Bank of America Corp., Wells Fargo & Co., and J.P. Morgan Chase & Co., which control a large amount of U.S. deposits, as well as Goldman Sachs, Morgan Stanley and Citigroup Inc., which have a large presence on Wall Street".

It'll be interesting to see what the shares of these guys do over the next few days.

Dictionary.com definition of the word: obscene

鈥揳诲箩别肠迟颈惫别

offensive to morality or decency; indecent;
abominable; disgusting; repulsive.

Might the fact that the Democrats lost the by election for Teddie Kennedy's seat in Massachusets and are likely to lose many more in the mid term elections this year be in any way connected?

The bailout money gave banks and business enough rope to hang themselves. Now that they've done little to help build back what had fallen, Obama's chain-jerking is fair in the eyes of all.

Don't forget he's still holding some high cards. There's quite a bit of stimulus money available that Obama hasn't yet allocated. Where will the money go...? Loans for new business? Green energy? Education investment? Health Administration Infrastructure?

Can the Slimy Money-Handlers be trusted to disseminate the cash?

#21
quote/Its everybodys fault, mine, yours, the govenments and the banks. If we hadnt generated the demand for more and more easy cash and credit with the buy now pay later attitude then the market would not have been there for the banks to sell to./unquote

Unfortunately the banks are expert confidence tricksters. They nearly got me a year ago at a weak moment. Thank god for the cooling-off period.

I've just checked out the Goldman Sachs website searching for a bit more info on today's announcement... and I happened to look under their section entitled "Business Principles".

The very first paragraph ( contains this statement:

"Our clients' interests always come first.
Our experience shows that if we serve our clients well, our own success will follow".

...... quite astonishing!

I'd be interested if someone from Goldmans could come on here and explain, as Robert has already pointed out in his blog on the 14th Jan, exactly how selling mortgaged-backed securities to clients (we are talking AIG here of course) and then betting the firms' capital that these securities would fall in value, and winning the bet to such a degree that AIG then effectively goes bust and has to be rescued by the taxpayer, is "serving our clients well"!

As Robert has already noted, Philip Angelides, chairman of the historic Financial Crisis Inquiry Commission expressed it well when he told Blankfein "It sounds to me a little bit like selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars".

I think Goldmans needs to come clean on their website and be more straightforward with their clients.

Based on Blankfein's response to the Commission which was that "Goldman's clients are investment institutions, and professionals capable of making up their own minds about what to buy and sell" I'd like to suggest they change this first all-important line in their "Business Principles" section to reflect reality:

"Our own interests always come first.
That is to say the interests of our Directors and of our Employees.
Our Shareholders interests come next.
And right at the end come the interests of our customers.
Well, no that's not quite true in fact. Right at the end come the interests of the wider society in which we operate, which includes government. Although when things go wrong for us we expect them to bail us out.
Customers should be careful to make up their own minds about everything and not be swayed by any advice we give them, given that this advice will always be in our own interest".

President Obama, was punished because the American's did not see him as tough on the bank's as he should have been. Especially, re; bonuses & the gall they showed to hand same out willy-nilly to any hand that would grab them & then there was the jet's & the big greedy dinner's & the get your heads smashed frenzy's. No, Americans had enough...because while all this was/is going on more jobs are falling victim by the day to this Depression...& I do call it a Depression because that's what it is. & in my opinion it has a long way to go yet to even attempt any kind of a landing or turnaround.

China is another (BLACK) dot on the horizon & even though they announced a 10.7 in growth which was beyond their expectation's it is deflation which will do it for them...burst their bubble that is, because while they're buying up here & there & lending here & there abroad...they are a little bit sadly forgetting about their domestic market...they have somehow to get their own people buying the goods they are over-turning out as I speak. & turning them out in record time, but their people is working for a dime & that's the crime. So get ready to hear the sound of that bubble burst there from here...& if you don't hear it you'll feel it. Just like a lot of Chinese are feeling the effects of the "Cold Death" it is so cold there in East & Northern parts of China that livestock are falling over dead where they stand. Human's are dying too 10 in this cold wave & it's about to last or another fortnight.
& people still dying of "Stupid Death's" in Haiti...because doctor's have/are not getting lifesaving drugs & surgical instruments etc, because who ever was packing the boxes of aid done so willy-nilly ( there's that word again) So that's another matter that needs President Obama's attention because in the State's people are horrified that after giving so much in aid...on the ground there seems to be a pack of fools distributing or not knowing what's medicine & what's food in the in the containers. President Obama might get it in the neck for the shenanigan鈥檚 in Haiti too鈥fter all he promised the Haitian people they would be truly looked after. Or did he just have the worst slogan ever in the one 鈥淲e can Change鈥� when up to now in his first year nothing has really changed at all. The dagger鈥檚 are already out; and are being sharpened. Good luck to you, Mr President, you will need it!

26. At 1:35pm on 21 Jan 2010, diarmidwp wrote:

">>1. Remove central banks monopoly on control of money supply."

>They don't have a monopoly on the control of the money supply. They supply reserves....

The currency is the paper supplied by the central bank; banks can't issue their own paper. The central bank dictates reserve requirements limiting the amount of credit (aka money) banks can issue.

>These reserves are important for maintaining confidence in money and its value....

Surely if the money has value we dont need confidence in it? The main reason we need a central bank is to be a back-stop to prevent the Ponzi-scheme from collapsing.

2. Allow markets to set interest rates.

>They generally do. Removal of the power of the BofE to set its rates would mean basically no monetary policy. Interest rates should reflect the costs of lending.

We only need monetary policy because of the monopoly controlling the supply of money. Monetary policy is just a mechanism for masking the robbery of the real economy by smoothing out the fraud. Take 2% here and there and nobody will notice!

3. Allow competing currencies, with money issued by all banks, as well as allowing gold and silver to be legal tender.

>Legal tender is not a big deal. We can make contracts in any currency (or commodity) we like. Would you really make a contract in a non state-backed currency?

You can't pay your taxes in oil or gold can you? Or USD? Settlement of contracts is a different issue to legal tender. If banks were allowed to issue their own paper the Bank of England would be in competition with the other banks (not in control of them) and the banks with higher reserves would have the most valuable paper. However, banks must be allowed to fail.

State-backing to a currency is a confidence trick. The currency isn't actually backed by anything.


>1. Accept that money and banking are always creatures of the state. Ensure that banking is organised and run for the general public good.

Isn't this a bit naive?

2. Make transactions more transparent by conducting as many as possible through barter networks. (Quite a lot of B2B transactions happen this way already.)

How will transparency help? 99.9% of the population aren't interested or don't understand. They don't even understand that they are being systematically robbed in so many ways.

Based on the assumption that next year there going to be substantial tax rises.

And if you鈥檙e still in work, you鈥檙e going to get hit by these tax rises.

Now it鈥檚 possible that you have a mortgage.

And it is also possible, that because of the increased taxes you have to pay to fund bailing out the banking sector you may no longer be able to keep up with your mortgage payments.

So the banking system you have bailed out, now takes your house off you.

You鈥檝e got to hand it to them, the sure no how to stick it to the average Joe & Jane don鈥檛 they. And whilst they have you over, they carry on paying themselves their bonuses.


Lord Mandelson to the P.M. late on Friday afternoon

鈥楢s long as the sheep are bleating about class and education, they won鈥檛 hear the slaughterman loading his gun鈥�

Only if there is an attempt to assasinate Obama will we know he is doing the right thing with regard to diminshing the power of the banks and the oligarchs.

What would you do in his position?

21. At 1:21pm on 21 Jan 2010, MichaelBinary wrote:
'And what about you and me. Well if we hadnt been so bloody greedy in the first place, then we would not have taken on loans and mortagages that we could not afford, just so we could have a lovely new car or holiday, or extension to our house.


No just hold on a minute, I didn't take out any loans, but I'm still having to pay.

Does this I mean I don't have to.

36. Wardy29

'The currency is the paper supplied by the central bank; banks can't issue their own paper. The central bank dictates reserve requirements limiting the amount of credit (aka money) banks can issue.'

Deposits recorded electronically, paper currency...what's the difference? Reserve levels are usually determined by the banks themselves. If they need more they can get them on demand from the central bank (at the prevailing base rate). The UK has no reserve requirement, anyway.

'Surely if the money has value we dont need confidence in it?'

We need confidence in its value! Why should we have confidence in the value of paper or electronic deposits unless their exchange value is supported ultimately by the power of the state to enforce it?

'You can't pay your taxes in oil or gold can you? Or USD?'

They can't be paid with money issued by commercial banks, either! You write the cheque to HMRC on your bank but your bank has to pay the government out of its reserves.

'...the banks with higher reserves would have the most valuable paper.' I assume you mean 'highest ratio of reserves to paper'. The relative values of currencies would fluctuate! There would have to be negotiations over the currency used in each transaction!

'...banks must be allowed to fail.'

With or without deposit insurance?

'The currency isn't actually backed by anything.'

The state currency is backed by the promise of government services in exchange for payment of taxes. The rest is backed (through the enforcement and regulatory powers of the state) by the promise of the new goods and services produced by the economy.

I said: 'Ensure that banking is organised and run for the general public good.'

You said: 'Isn't this a bit naive?'

Maybe. I think it's a lot less naive than free banking. And with adequate safeguards from political interference a lot better than the current system.

'How will transparency help? 99.9% of the population aren't interested or don't understand. They don't even understand that they are being systematically robbed in so many ways.'

And the fact that production plans and exchanges are mediated through an anonymous homogenised monetary and banking system keeps it that way.

'And here's an interesting and resonant statistic about the balance of financial power in the world: just one thirtieth of what Goldman is likely to pay its staff is equivalent to all the debt (of $641m) that Haiti owes the rest of the world'

Go for it Robert - you are in a far more powerful position than us, 'Jo Public', to push this cause. If any bank were to pay just a fraction (1/30th) of their proposed bonuses to direct good causes then Haiti's debt could be 'written off' and other poverty problems throughout the world could be helped. Indeed, as a taxpayer, that now owns some of these banks, I would support them being able to claim it against the tax bill on their huge, undeserved and unearned profits!!

ATTACKING THE RISK TAKING 鈥� BRILLIANT !

Obama is attacking 鈥渞isk taking,鈥� that very human characteristic at the heart of America鈥檚 success.

The Presidential attacks should be very troubling to taxpayers for more profound reasons.

It strikes me that Obama's proposed legislation would not have prevented the failure of Lehman Brothers (I don't believe that Lehman was licenced to accept deposits and would not therefore have satisfied the definition of "bank" for these purposes) and that surely has to be the yardstick by which we ought to be judging whether or not any proposed changes are likely to be effective. (It would appear that) we barely survived the collapse of Lehman and (I believe that) Paulson later admitted that, with the benefit of hindsight, letting Lehman collapse was probably the wrong decision.

The fact is, these non-banks (for want of a better term) can just as easily wreck the financial system as any bank and that just separating retail banking from investment banking does not go far enough to ward of the risk of another potential collapse. Investment bankers, as is only too evident from their bonus culture, are pure speculators who are only interested in their own personal financial gain and the only way we are ever going to control them is to make them personally liable for their failings.

Forget about levying the banks' future profits. Why not start by making a retrospective levy on bankers bonuses for the last 10 years?!

I for one think this is a very brave move from Obama, and I applaud him for that. This is sure to make him very unpopular with some of his largest campaign backers. Unfortunately this will only keep Wall Street in check for a short while until the dust has settled. Greed knows no boundaries in the world of high finance. This became very apparent when I read 鈥淏arbarians at the Gate鈥�. Wall Street is a sure a sign that humans tend to be a self destructing force if you give then almost complete freedom of judgement. This really reflects badly on us as a human race and I consider this whole banking debacle as a total disgrace and something we should be ashamed of.