Occupy Underground

snot

(10,798 posts) Sat Jan 9, 2016, 02:44 PM Jan 2016

Question! (about an amendment to Dodd-Frank; referrals welcome!)

I'm posting about this here because I know that, at least for a while, there was an Occupy committee that gave detailed comments on the then-pending Dodd-Frank legislation. I recently came across an article about an amendment to Dodd-Frank that I found very concerning, and I'd like to see more analyses of the effects of the amendment from sources I trust (eridani has posted about this article on DU previously, though not in this group):

http://www.truthdig.com/report/item/a_crisis_worse_than_isis_bail-ins_begin_20151229 - "A Crisis Worse Than Islamic State? Bank ‘Bail-Ins’ Begin."

The gist as I understand it is that in Greece, depositors' savings are being drained BEFORE derivatives counterparties or bank shareholders have to take any haircut – AND that that same "Orderly Resolution" process is now the law in the U.S. under Dodd-Frank, thanks to a sneaky little amendment.

This, combined with concerns about the inadequacy of FDIC insurance funds, makes for a very scary picture.

Unfortunately, the gist of the article seems only too plausible at this point; but I looked at one or two of the sources quoted in it, and one of them wasn't really about the same point(s); i.e., the quote was excerpted and used in a way that was, at least to me, slightly misleading. That may have been unintentional . . . .

I've found almost nothing else online that's directly on point. Here are links to what I did find (not reassuring):

http://seekingalpha.com/instablog/693913-andrew-sachais/3068725-fdic-coverage-and-dodd-frank-what-it-could-mean-for-your-deposits - FDIC Coverage And Dodd Frank – What It Could Mean For Your Deposits
{by Andrew Sachais}
Jul 15, 2014 5:30 PM

http://www.nakedcapitalism.com/2013/03/when-you-werent-looking-democrat-bank-stooges-launch-bills-to-permit-bailouts-deregulate-derivatives.html : When You Weren’t Looking, Democrat Bank Stooges Launch Bills to Permit Bailouts, Deregulate Derivatives
Posted on March 19, 2013 by Yves Smith

I'm hoping for input from others with more expertise who can confirm or refine what the article seems to say.

7 replies

= new reply since forum marked as read

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Question! (about an amendment to Dodd-Frank; referrals welcome!) (Original Post) snot Jan 2016 OP

Kick for exposure. I'm hoping you get some replies 99th_Monkey Jan 2016 #1

Thanks! snot Jan 2016 #2

Banks could always "take" your money, hence FDIC. As a practical matter, if it gets to that point, Hoyt Jan 2016 #3

As I understand it .. 99th_Monkey Jan 2016 #5

I think I know something about that and, uh, agree to disagree. snot Jan 2016 #7

I'm not up on the Dodd-Frank details Joe Shlabotnik Jan 2016 #4

Like Geo. Carlin said, "they gotcha by the balls" 99th_Monkey Jan 2016 #6

99th_Monkey

(19,326 posts)

1. Kick for exposure. I'm hoping you get some replies

Reply to snot (Original post)

Sat Jan 9, 2016, 03:01 PM

Jan 2016

from people who have a better grasp on how financial markets operate than I do.

I have this gut feeling that another "fleecing" of the US public is around the bend, and
would like to be better informed about it myself.

snot

(10,798 posts)

2. Thanks!

Reply to 99th_Monkey (Reply #1)

Sat Jan 9, 2016, 03:04 PM

Jan 2016

Hoyt

(54,770 posts)

3. Banks could always "take" your money, hence FDIC. As a practical matter, if it gets to that point,

Reply to snot (Original post)

Sat Jan 9, 2016, 03:12 PM

Jan 2016

your money is pretty much worthless unless the Feds step in.

And, no, I'm not saying financial institutions don't do illegal things. Where money is involved, tough regulation is required. But, breaking up the big banks into lots of smaller ones will not enhance regulation, IMO. In an event that would bring down a big bank, you'd just have hundreds/thousands of smaller ones going down -- and correcting the problem will be more complicated.

99th_Monkey

(19,326 posts)

5. As I understand it ..

Reply to Hoyt (Reply #3)

Sat Jan 9, 2016, 05:33 PM

Jan 2016

"breaking up the big banks" is not intended to "enhance regulation"

Though my grasp of how financial institutions is sketchy, I don't think breaking up the biggest
banks is intended to "enhance regulation", it's intended to end ANY financial institution from
being "too big to fail" <-- the much ballyhooed rationale for "having no choice" but to bail them
out if they go tits-up.

snot

(10,798 posts)

7. I think I know something about that and, uh, agree to disagree.

Reply to Hoyt (Reply #3)

Sat Jan 9, 2016, 05:40 PM

Jan 2016

Joe Shlabotnik

(5,604 posts)

4. I'm not up on the Dodd-Frank details

Reply to snot (Original post)

Sat Jan 9, 2016, 04:48 PM

Jan 2016

but up here in Canada a bail-in law was quietly passed in an omnibus bill just a few years ago. Basically the bank can take a portion of your funds, as a first measure, and issue you stock in exchange (which could end up being worthless). I think there are actually several European countries who have done the same, not just Greece.

99th_Monkey

(19,326 posts)

6. Like Geo. Carlin said, "they gotcha by the balls"

Reply to Joe Shlabotnik (Reply #4)

Sat Jan 9, 2016, 05:35 PM

Jan 2016

coming and going, bail-out or bail-in ... ALWAYS at the expense of 'the little people'.

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