McCain and Cantwell propose resurrecting Glass-Steagall to break up Wall Street

Discussion in 'Politics, Religion, Social Issues' started by abijnk, Dec 15, 2009.

  1. abijnk macrumors 68040

    abijnk

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    #1
    Link

    I'm still catching up on what exactly the Glass-Steagall Act is/was, so I don't know if I agree or not yet.

    What do you think?
     
  2. rdowns macrumors Penryn

    rdowns

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    #2
    I'm all for it. It will never happen. Cat out the bag and all that.

    Fixing the economy and banking/financial system should have been Obama's Job 1, not health care.

    We had "too big to fail" and all the government did was throw money at a few firms which used it to buy other firms. So now they're too bigger than before to fail, or some **** like that.
     
  3. XNine macrumors 68040

    XNine

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    Take it from me, banks are the root of all evil... Either that or black licorice, I can't remember. But the point is, these giant conglomerates are sucking America dry.

    you know how much money they made off of overdraft fees in 2008? 38 BILLION. That's 38 Billion dollars that normal everyday people made (and most of these fees are absolutely ridiculous.)

    They buy into investments that aren't sound. Banks should NOT be able to buy into any investments unless it's something they actually own. Like Land.
     
  4. yojitani macrumors 68000

    yojitani

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    It's so sad that Obama seems reluctant to actually do anything about the banks aside from give them lectures and call them names. I really hope he sharpens his teeth over the next year.
     
  5. Zombie Acorn macrumors 65816

    Zombie Acorn

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    #5
    Anything that breaks up the banking institutions is fine with me. It shouldn't have been repealed to begin with though.
     
  6. Shivetya macrumors 65816

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    #6
    LOL, he only wants to make an impression he is being rough on the bankers and Wall Street. Considering it a shake down. He wants them a little wary because they will more readily cough up the money for the next election.

    Obama is President Wall Street. He decided that trickle down was too slow and just hands Wall Street types money directly.
     
  7. Thomas Veil macrumors 68020

    Thomas Veil

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    Agree completely. The repeal was a major component in setting up the current economic meltdown. Bring it back.
     
  8. Teh Don Ditty macrumors G4

    Teh Don Ditty

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    Something that actually makes sense!

    I'm all for it but I'm inclined to agree with rdowns, the banks will not go quietly into that good night... so to speak.
     
  9. CaptMurdock macrumors 6502a

    CaptMurdock

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    Yeah, I'm on board with this.

    I have to ask: where was this John McCain during the election? This is the reasonable guy I remember, not the nutjob who pandered to the Republican base. :cool:
     
  10. rdowns macrumors Penryn

    rdowns

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    #10

    I too used to like McCain. However, I think this moment of clarity for him is squarely rooted in his low polls numbers for re-election and his desire to be in the spotlight. Christ, Palin gets more press than he does.

    He was calling for less regulation as our economy was tanking.

    BTW, there are a few honest banking types left in the world. This is supported by Paul Volker, Reed (former head of Citi) and the former head of the SEC.
     
  11. Teh Don Ditty macrumors G4

    Teh Don Ditty

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    #11
    Palin should not be getting any spot light. She quit her post and is now on a book tour for doing what? Exactly.

    I think a lot of people used to like McCain as he was level headed and didn't get involved with party politics.

    Hinest, hiney or finest? :D :p
     
  12. joepunk macrumors 68030

    joepunk

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    I'm all for bringing back the Glass-Steagall Act/s and have been ever since I found out that it was repealed long ago.
     
  13. rhsgolfer33 macrumors 6502a

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    #13
    You're blaming the banks for charging overdraft fees that all customers should be aware of? There is an easy solution to this, don't overdraft. I've had a bank account for years and because I'm capable of keeping track of my balance and strategically using my other accounts or credit cards when one account is low on funds, I've never had an overdraft. Also, I know a few people that work as tellers at a large national bank, if you're smart and you haven't had a lot of overdrafts, it isn't terribly difficult to get an overdraft charge waived. Hell, all my accounts have one free overdraft every year.

    I'm definitely not for this proposal. It could have steep economic effects, especially when it comes to lending. I think the easier way to fix the problem would be to require increased liquidity in the form of cash and the like, in case a bank does experience problems they will hopefully be able to fix them on their own.
     
  14. abijnk thread starter macrumors 68040

    abijnk

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    #14
    It isn't that easy, though. That's the whole problem with overdraft fees. I once got paid (i.e. had a University check) and went and deposited the check on a Thursday. The next week I started paying my bills. Next thing I knew I was over $100 dollars in the hole. Why? Because they took out the bill payments before they credited my deposit and then charged individual overdraft fees for each transaction. I complained to the bank manager, but could I get anywhere? No, because the customer has no say over how and when transactions are credited. The current system allows banks to do crap like that with absolutely no recourse whatsoever.
     
  15. leekohler macrumors G5

    leekohler

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    #15
    That would have been nice, no? He's starting to sound like his old self with this. You know, the guy who ran against W way back when. I liked that guy.
     
  16. rhsgolfer33 macrumors 6502a

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    I can definitely understand it if it was a few years ago, however, with online banking you can easily see what is credited to your account and what isn't before making a payment. I always check my account online to make sure that any deposits are credited and I have a sufficient balance before I make any payments. Of course, I do everything via debit card or credit card, which makes it fairly easy to see what my balance actually is, since there are never any outstanding checks to account for and I either have receipts for any charges or they already show up on my account online.
     
  17. Teh Don Ditty macrumors G4

    Teh Don Ditty

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    #17
    This.

    I don't understand how that's legal. They process out of order to make a profit from you.

    Local credit unions are a better choice to have accounts.

    A lot of us did.
     
  18. abijnk thread starter macrumors 68040

    abijnk

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    #18
    Seriously? You're excusing this because they provide us with a website? That's B.S., if I make a deposit on Thursday is shouldn't matter if the bank has online access or not, I should be able to use the money on Monday (hell, on Friday).

    I think you missed the point, we shouldn't have to bend over backwards and take it up the dirty hole so that the banks can be profitable. They should be expected to be ethical, and that means when I put money into my account I should be able to then take it back out when I want to.
     
  19. rhsgolfer33 macrumors 6502a

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    #19
    It isn't B.S., it is likely part of the reason banks provide a website in the first place, so consumers can more easily monitor their accounts.

    And, for the most part, if you make a deposit on Thursday it will be available on Friday. However, there are exceptions. If you make a check deposit via an ATM you can't expect it to be available until at least Monday. Checks have to clear before they make into your account; the bank is not going to give you money to spend before it knows if it is going to receive that money. Chase Bank has no way to know that the check your receive from someone that is drawn on Wells Fargo will not bounce. Once the bank has determine that the there is enough money in the persons account, your account will be credited for the full check balance (some banks will give you partial credit prior to the check clearing; my bank gives me up to $100).

    In fact, there are actually government mandated holding periods for certain deposits. See the Expedited Funds Availability Act.

    Is checking your bank balance online before you pay bills really bending over backwards? I have to type about 50 characters to find out my balance, that is pretty damn easy. Also, there is no reason why you can't check your balance on the cell phone, logging into a bank account should be no problem, especially with the advent of the iPhone, as well as cell phone speceific bank websites. Some banks will even text you your bank balance if you ask.

    That is simply not possible. Again, a bank is not going to allow themselves to get shafted if the check you deposited bounces, that is why it often takes a few days for your deposit to clear. Cash deposits usually credit to your account right when you make them, especially if you make the deposit with a human teller.

    I get that banks need to act ethically, but consumers also need to be aware of how a bank functions and need to take responsibility for their own poor management of their accounts. I definitely don't think overdraft fees should be as high as they are, but should they be allowed? Absolutely.
     
  20. Zombie Acorn macrumors 65816

    Zombie Acorn

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    #20
    Find a small bank, get to know the people who work there, profit. I used to bank with a chain for a short period of time and got screwed over in the same instance so many times, they'd apply credits and debits out of order to make overdraft profits if possible. I had enough, bitched out the bank manager and went back to a small bank where I knew the people. If I make a deposit today I can ask the teller to push the deposit and I can order within 30 minutes (we often have high price unexpected orders). That is service, **** the big banks.

    During the height of the credit crunch I asked one of the loan officers how business was when I saw him at lunch, his response: "We never engaged in any of the risky activities the big banks were doing, its business as usual for us and we are still loaning the same as we ever did".
     
  21. Zombie Acorn macrumors 65816

    Zombie Acorn

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    #21
    Regulation CC stipulates four types of holds that a bank may place on a check deposit at its discretion.

    Banks should not be able to overdraft you if you have provided them with funds prior to writing checks unless the check comes back NSF. This is a big chain illusion, if my account overdrafts I get a call and I can go down and deposit money.

    There is no reason big banks can't institute a automated reminder when your bank overdrafts, and give you a couple hours to deposit cash.
     
  22. GfPQqmcRKUvP macrumors 68040

    GfPQqmcRKUvP

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    I can't believe when people get mad about overdrafts. I literally am at a loss for words whenever it happens. It's your own fault you didn't check your balance! If you don't want to deal with the system of delays and and waiting periods, conduct all your business in cash. If you want the convenience of cards and checks, you have to play by the rules of the people who allow you to do so, especially when they make it so easy to avoid problems (txt balances, online, iPhone apps, email alerts, etc.).

    They shouldn't need to give you a couple hours to deposit cash: you shouldn't have overdrafted your account to begin with.
     
  23. Zombie Acorn macrumors 65816

    Zombie Acorn

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    #23
    When you deposit money on thursday you expect to be able to use it by at least the next week. Not only will banks overdraft your account, they will "efficiently" overdraft it so that they can send back as many checks as possible even if they are debited out of order.

    I said that they could very easily implement the system, I currently bank with a private ethical and friendly bank that isn't out to cheap shot their customers so I don't care either way.
     
  24. abijnk thread starter macrumors 68040

    abijnk

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    #24
    Exactly. There are many many MANY documented examples of this happening. You've got six withdrawals and a deposit sitting in the queue and the bank can put them in any order it damn well pleases. That is wrong.

    The more I read about the Glass-Steagall act the more I think it should be re-enacted, and the more I think it is less likely to happen.
     
  25. SactoGuy18 macrumors 68030

    SactoGuy18

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    They should have IMMEDIATELY implemented this back in February-March 2009.

    If you look at the last time we had so many bank failures (1929-1933), many of the banks failed because their assets were wiped out due to so much bank assets invested in the stock market--and when the October 1929 crash happened, it took the banks with it.

    An instructive example of how effective Glass-Steagall was happened in 1987: the one-day 25% crash of the stock market on October 19, 1987 did not have significant long-term effects on the US economy, because bank assets--effectively "firewalled" from the stock market under Glass-Steagall--literally became a de facto "economic backstop" that held up the US economy as the stock market worked through that fiasco.

    This is why I've advocated this multipoint plan to stabilize and revive the US economy:

    1) MASSIVELY overhaul our taxation systems so it encourages personal savings and capital investment staying in the USA. That's why I'm a big proponent of the FairTax proposal (H.R. 25/S. 296), which not only makes personal savings and capital investment in the USA essentially tax-free, but because we replace the income tax system with a consumption tax system, save Americans nearly US$500 BILLION per year in compliance costs.

    2) Impose stronger regulation on new, "exotic" investments like credit default swaps, derivatives and hedge funds like requiring real liquidity backing to trade in these funds or just ban these types of trades outright as too much financial risk.

    3) Increase the minimum margin requirements for trading in stock futures and commodity futures from 5% to 15%, with a rate as high as 25% for economically critical items like crude oil, certain petroleum products, natural gas, certain critical foodstuffs (corn, rice and wheat), certain critical industrial metals (aluminum, copper, iron, nickel and titanium), and precious metals (gold, platinum and silver). This will drive out the speculators that can drive up and down the price of stocks and commodities steeply in a very short period of time, which can have very negative economic effects.

    4) Revamp the Sarbanes-Oxley Act to streamline the cost of accounting requirements for large stock initial public offerings (IPOs) and revise the "mark to market" valuation of stocks. Essentially, the last large IPO since the passage of this law was Google, and we have no plans for large IPOs in the USA anymore due to the excessive requirements of this law.

    5) Reimpose the 1933 Glass-Steagall Act to protect bank assets from the ups and downs of the stock market for the reasons I stated above.

    6) In the longer term, begin a ten-year phaseout of the current fiat currency-based US dollar in favor of a new US dollar that is backed up by a mix of gold, platinum, silver, copper and nickel, the most common metals used for coins.
     

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