Both Parties Have it Wrong

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Today I have a question for you; make that two questions:

  1. Do you think that financial services should be more regulated or less regulated?
  2. Do you think that the Dodd-Frank Act (Dodd-Frank Wall Street Reform and Consumer Protection Act), signed into law two years ago on July 21, has hurt:
    1. You personally?
    2. Businesspeople or businesses you know of?
    3. The economy in general?

Here's my opinion; not that it matters that I'm an expert on the subject, or that I have 30 years in the financial services business, or that I own a couple of businesses, or that I'm getting back into the financial services game in a big way (more on that sometime in the future).

It's just my stupid opinion. It really doesn't matter that I'm right, either, because it's just my opinion; did I say that?

The correct answer (according to me) to question No. 1 is itself an economic postulate: "More is always better sooner." As in, we need more and better regulation, sooner rather than later. That's my final answer.

The correct answer, in other words, my answer, to question No. 2 is: no, no, and no.

I'm going to make this short and simple, because I want to hear from you on this subject. (Just click below and leave your answers in the comments section.)

The Republicans are Facing a Quandary

Their man Mitt is a rich fellow. He's basically a Wall Street guy. And, being a Republican, he's all about small government (or if you're a hard-core GOP fanatic, no government, that is, except for a small one run by Republicans).

Now, for Wall Street, "small government" is Street-speak for "free markets," which is Street-speak for a no-holds-barred, get rich on the backs of anyone, kind of free-for-all; "all," of course, referring to all of them and none of you.

Towards their small government nirvana, House Republicans on the House Financial Services Committee and their subcommittees have scheduled six hearings over the next two weeks on the impact of Dodd-Frank on everything from job creation to free markets.

They already had one hearing this week. And it was a blockbuster.

They brandished the results of an online survey (you can find that survey here) that clearly proves that respondents are up in arms about how bad Dodd-Frank is affecting them, or could, or would, or might, or whatever… is definitely going to affect them.

Go ahead, read the survey questions – there are only a few – and answer them too. But, don't bother checking to see if giving the opposite answer elicits a different response. It doesn't. Whether you answer yes or no, the propaganda that accompanies your answer is exactly the same.

But be forewarned, the questions are really tough. The first one, for example, is: "Do you purchase food for yourself and your family?"

Here's my point. Republicans in the House are pushing to repeal a lot of Dodd-Frank, what's already written, and before a lot of it is finally written or ever implemented.

It's not about small government. It's about being owned by Wall Street and pandering to their desire to have free markets – you know what that means, I already explained that.

As far as Mitt Romney, he's got a problem. He wants the economy to sink before the election.

Come on, you know he does. Because if it does, he's going to presume that he can ride in to save us all with less government and less regulation of Wall Street, so they can get back to financing growth in this great country. Because, you know, it's the banks that make America great, and strong, and the envy of the world, and rich, and corrupt.

But Romney's problem will be the Democrats.

The Democrats will rally and ask themselves and everyone else, do we want another Wall Street free-for-all? Is that the answer to our weak economy, to our high employment, to the mess we find ourselves in?

No, Mitt isn't going to have it easy.

The truth is, we're here because of what Wall Street did to put us here. It's not a Republican thing or a Democrat thing. It's a Wall Street thing.

And if you think I'm a Democrat and for Obama, you're wrong there.

I wanted him to be different, but he's turned out to be rather a non-entity.

My beef with Obama is simple. He rode into office with a global mandate – not just an American mandate – to clean up banking and put greedy bankers in their place. Remember where we were in 2008 when he got elected? Remember? We were literally on the brink of a global financial collapse that would have made the Great Depression look like a day at the beach.

And what does Obama do?

Instead of knocking out Wall Street reforms (he should have started by re-implementing Glass-Steagall and then immediately downsizing every big bank in America) in his first 100 days, he does nothing to fix the broken confidence in the engine room of our country's growth, the banks, and capital markets. Instead, he goes about attacking healthcare. And look how productive that has been.

Anyway, my point is this: The Republicans have it wrong, and the Democrats have it wrong.

Where the hell is Ron Paul?

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About the Author

Shah Gilani is the Event Trading Specialist for Money Map Press. He provides specific trading recommendations in Capital Wave Forecast, where he predicts gigantic "waves" of money forming and shows you how to play them for the biggest gains. In Short-Side Fortunes, Shah shows the "little guy" how to make massive size gains – sometimes in a single day – by flipping large asset classes like stocks, bonds, commodities, ETFs and more. He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.

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  1. ROBERT | July 14, 2012

    In response to your outspoken opinion, it is my opinion that you are 100%, absolutely undeniably correct. But this is just my opinion.

  2. Al Stafford | July 14, 2012

    As with most other retorike the sutile references to lowering or getting rid of the small tax incentives like dividend credits and capital gains exemptions will only garner smoke screen votes from people that have so little now that it would not make a difference , it will also cover the mass corruption regulatory changes that are required for control of the financial industry which will not happen because the banks and government are in bed together.

  3. priyesh | July 14, 2012

    good stuff

  4. Sven A Bjorke | July 16, 2012

    Good points! We obviously need more regulations. The totally free market has never existed, there are far too many strange subsidies, tax cuts and market manipulations for that. Lets get a crystal clear legal framework for businesses. Within this framework we have a free enterprise system and as free market as you get it. But the rules must be enforced, also for the big guys and organised crime syndicates. Todays system allows the biggest bullies to get away with anything, and when it goes wrong they come running for tax payers money to cover their mistakes. Wall street tycoons demand to play casino with risk. This cannot continue.

  5. Ron Chandler | July 17, 2012

    Speaking with many regional bankers in both Wisconsin and Minnesota, it seems pretty clear that Dodd-Frank is designed to consolidate the who1e banking industry into 5-10 mega banks that can then be easily controlled by your beloved central planners.

    Regulators are squeezing the small guys into calling loans on small businesses without discretion. As the loan portfolios shrink, these banks start sufferring and are encouraged to sell out to the larger institutions at, as you can guess, discounted prices.

    Central planners cannot control large numbers of small banks (just as they cannot control large numbers of small businesses), but they can create their quasi-government banks by using the unlimited rules-writing power of Dodd-Frank to ruthlessly destroy the "original" banking system and bringing President Wilson's dream to fruition….while you stand on the sideline screaming "yes we can!".

    Somewhere Mussolini is smiling….

    All hail Amerika!

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