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In last week's Insights & Indictments, in my commentary on all the letters sent to the SEC about the proposed Volcker Rule, I not-so-casually commented that the Volcker Rule "shouldn't exist at all."
And then I called the parents of the Volcker Rule, the Dodd-Frank Act, a "joke."
Well, by the amount of comments I got back from I&I readers – right now, there are about 95,000 of you (and counting) – you'd think I was talking about something really controversial, like contraception, for heaven's sake.
Talk about passionate!
I understand that people get passionate about contraception. After all, without all that passion, we wouldn't need contraception.
But me being passionate about the birth of the Volcker Rule, which I said should never had been conceived, apparently caused a lot of to you think I crossed some moral line.
Not me! I'm not one to ever say anything controversial! And I'm certainly not the kind of guy to wade into the contraception debate.
But, if I was, I'd be a strong advocate for it.
The unwelcome birth of the Volcker Rule is a good example…
If the inflamed passion of those two preening peacocks, Chris Dodd and Barney Frank, was sheathed before their love of public attention (and private whoring to special interests) forced them into the "Act" (I'm talking about the Dodd-Frank Act; get your mind out of the gutter), then we wouldn't have this the bastard-child whose future we are debating.
Actually, though, it's not that we have the Volcker Rule that's an issue. It's the affair between its parents that's the issue.
There was no happy marriage in Dodd-Frank. It was always a sham.
The Act itself isn't a marriage certificate, proving a passionate love for the public interest over private banking and financial services.
It's nothing less than a living will pre-nup that guarantees infidelity everywhere between the sheets it's dirtied in its making.
By "sheets," I mean sheets of paper. Dodd-Frank is 848 pages long.
By comparison, it is 23 times longer than the 37-page Glass-Steagall Act, the sensible 1930s legislation that separated deposit-insured commercial banks from risk-taking investment banks and was aborted by Congress in 1999.
Don't get me started on that…!
All I'll say is that Dodd-Frank is really an attempt to put Humpty Dumpty (Glass-Steagall) back together again, with the biggest pieces missing.
Just How Ridiculous is Dodd-Frank?
It's not legislation. It's not a passion play. It's a comedy.
It mandates 87 "studies," of which only 37 have been "completed."
I just read in The Economist that, according to super-powerhouse law firm Davis Polk (believe me, they are good!), "only 93 of the 400 rulemaking requirements mandated by Dodd-Frank have been finalized."
If you don't understand the significance of enacted legislation that isn't yet written, the Volcker Rule is a perfect example.
The Volcker Rule is a part of Dud-Frankenstein (I mean Dodd Frank, or D-F, as in…).
And it, alone, is some 298 pages (or dirty "sheets") long.
It was written by four of the five agencies charged with writing and enacting it. The fifth agency, the CFTC, wrote its own 489-page proposal on what should be in the Volcker Rule.
Good thing all our regulatory agencies all work together, right? Good thing they don't all have their own fiefdoms and competing political agendas, right?
Anyway, Davis Polk says that the Volcker Rule includes 383 questions that themselves result in 1,420 sub-questions. The firm has created an interactive Volcker "rule map" that, according to the magazine, it produced for its clients – as well as 355 "distinct steps" for them to follow.
So, I ask you, this bad marriage, this sham affair, this monster Dud-Frankenstein that birthed the Volcker Rule, or son-of-DF…
Is this any way to legislate?
The Whole Exercise is Another Form of "Extend and Pretend"
Last week, when commenting on the Volcker Rule, I called President Obama "spineless."
A lot of you didn't like that either. (Of course, some of you loved it.)
What I was pointing to was that the President came into power with an OVERWHELMING American mandate (and a global mandate, for that matter) to clean up Wall Street and to protect us from what had just happened, ever happening again.
So did he take immediate action upon entering office? No.
Instead of striking while the iron was hot, the President pandered to Wall Street special interests (after all, he had accepted tens of millions of dollars from them in election funds) by pretending to attack banks and bankers, all the while extending the day of reckoning and the writing (if you can call it that) of any legislation to stomp out Wall Street abuses.
And lo and behold, we got Dodd-Frank.
We got shafted.
So today we get to pretend that laws were written (most were not, and never will be, and the ones that are written, like the Volcker Rule, well, you see what's happening there), while banksters get to extend the time it takes to enact anything meaningful just long enough to get markets to reach new highs and the focus of discussion shifts from what Wall Street hath wrought, to contraception.
So go ahead, get mad at me for bring up contraception. After all, can't you see that I'm just trying to divert the conversation?
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About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.
You are always right on and have the courage to say the truth.
Anything that Barney Frank and Kieth Dodd were connected with is a joke!
Thanks but I can not take the time to read 298 pages of government gpbblrdegoop
You so called gurus, financial wizards, all you guys keep bringing up all these ways goverment keeps screwing the people, yet you keep advising us to keep investing in this corrupt cesspool you call the American financial markets. You keep bitching about how politicians and government keeps failing us yet you want us to dump are hard earn dollars in the system which they own and operate for themselves. There profits are huge yet the average working man gets in and then he get screwed by the big money. The sad part is is the big money uses people like you to do its dirty work for them. If you really want to help the average Joe out there, then you would advise him to get the hell out of the stock market and buy Iraqi Dinars! When the RV happens then you'll see real profits!
Bingo! But not only the financial markets. The stock market is also nothing but speculation as "investing" in it is based on how the market (other speculators) view the price of the stock instead of the underlying business. Sure, people pretend to use PE ratios but the prime consideration is how the market is moving, which has nothing to do with business performance but with how speculators perceive price and whether someone else will pay more tomorrow for what they bought today.
Those who gave you crap are uninformed idiots, anyway…..and Obama is not only spineless, he also is a facist ass who dislikes the very nation that he is allegedly running……he is in bed with the Muslim nation and always has been – and always will be……his intent is to bring this once great country down in preparation for the New World Order which is well on its way. God help us if this ass is reelected and the chances of that are very good, indeed.
Oh, and by the way, Chris Dodd and Barney Frank are nothing but "yes" men and all such men (not positive Barney is a man!) are committed to accomplishing the above……..I have nothing but disdain for all of them….
Considering all the words you used, you could have actually told me what's wrong with Dodd-Frank. Instead you wasted my time with "clever" writing.
I don't know who Messrs Frank and Dodd are…but they have certainly made an impression.
Is Obama really gonna be a continuation of the pressy.? Maybe William Shakespeare could have made a play called the 'Merchants of Menace'..if he was here of course.
Now we aussie people are awe struck that our aussie dollar is above par with US $. So from all of that, Allah be praised, maybe we might see a revolution in good ol' USA. But who would bankroll it? The French and Russian revolutions were BRd by Rothschild, as was Mao tse Tung(?) and others..ha ha but don't wait for Rothsies to bankroll a US revo. Noooooo..they are comfy in London and too busy playing monopoly at Guernsey Island (UK).
I am afraid that Barney Frank and Chris Dodd have won the day. Maybe, just maybe, Groucho Marx might be invited for an encore.
HANG THEM ALL AND LET GOD SORT IT OUT!
THERE IS NO NEED FOR MODERATION WITH THESE CLOWNS.
Shah,
I wonder what you must think when you write an article like this and one of your posters thinks Chris Dodd's name is Kieth and another thinks the way to make real money is holding Iraqi dinars for "the revaluation?"
And on balance, this has to be a pretty sophisticated audience.
Makes ya wonder.
The current resident of 1600 Pennsylvania Ave. isn't so much spineless as he is evil. He was put in place to complete the financial meltdown that the 9/11 terrorists started. No one is this inept or "out of his depth", etc. etc. ad nauseum. What we are experiencing is planned destruction of the American economy and it is obvious to anyone who has eyes that will see. His behavior is nothing if it isn't schizophrenic; on the one hand he spends trillions of our tax money, on the other, he is exhorting us to be financially prudent! (AND THAT IS ONLY ONE EXAMPLE OF HIS DUPLICITY).
The "dynamic duo" of D and F are truly contemptible, loathsome liars and we are well rid of them. Now we need to send packing that other gruesome twosome of Pelosi & Reed.
Refreshingly honest and hard hitting as always. I often quote you in our own newsletter. Thanks for using your platform to speak out against the complete and utter mismanagement of this country's economy.