Banks are not only fighting deteriorating loan portfolios. They also have to fight Washington…
• Proposals from the US Commodity Futures Trading Commission to limit holdings of oil and gas futures.
• Investigations by the Department of Justice into the credit derivatives market.
• Proposals from the Federal Deposit Insurance Corporation to require big banks to pay fees for carrying out activities outside of traditional banking. They would discourage banks from growing too big or complex.
• Proposals that banks should keep a bigger cushion of capital – which would force them to make disposals and become smaller.
The government wants to reign banks in … make them smaller and less complex … and take away much of the risk. The banks want risk and leverage and size, all the things that generate big profits and big bonuses for bankers.
Big banks will marshal their well-paid lobbyists and friends in Washington to fight these restrictions tooth and nail. They won’t be able to avoid entirely more regulations and tighter supervision. But they certainly want to avoid the most restrictive of the proposed regulations. Their future is at stake. Will they be slightly toned-down facsimiles of the big powerful wheeling-dealing banks we’ve grown to know? Or will they be turned into the equivalent of financial utilities?
We simply don’t know yet what the future holds for banks. Until you have some idea how this will play out, better to stay away from a sector that the politicians won’t leave alone.
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I totally agree with the concept of Best of Breed. So where do we find them?
Everything our great bloated government puts it’s hands on fails, goes broke or both! Social Security, Banks, Health care, what’s next our freedom of speech and choice? I have an older friend who’s uncle was in a Nazi concentration camp, and his Uncle said “The people who did nothing, where worse than the Nazi’s”. It’s the Wizard of Oz in real time. Wake up people, the Government needs us not the other way around! We the people keep paying an employee that fails to do there job!!! And all that is done is belly aching! If you went to Morton’s steak house and ordered a prime filet, and you were served a Big Mac, would you pay for the steak?, let alone tip for the service!! The whole system needs to be disemboweled for high treason.
ilove and appreciate this conversation but i need your help in making profit badly.thanks.
on and on and on what you had to say could have been writen in 1/3 of the writting!
I say cue dos to the government. I hope they regulate these banks right out of the investment business altogether. I don’t think banks have any business whats so ever doing anything but banking . Plain and simple. Stay out of Investments period bankers!Regulate the hell out of them till investments are no longer a good idea for them.