The Bill was finally signed by President Obama on Wednesday July 21st, marking the most extensive financial reform legislation since the great depression. In addition to tougher regulations and fees for large banks, the bill outlines new processes and steps to be taken to address troubled companies, which would break down the business units and sell them off, rather than bail them out. The bill is being heavily criticized for what appears to be the government’s increased role of power and control. Further, despite what we’ve heard from the President and democrats on Capital Hill, the bill does contain language that suggests that the Federal Government still retains the authority to bailout troubled companies. Bloggers are going bonkers over this issue. I, on the other hand, feel otherwise. In all likelihood, the government’s authority is restricted to last resort options, or special circumstances. Let’s face it, no one could have predicted the turn of events in ’08 and ’09. Therefore, to close the door to any alternate options that may save the country from another “never before seen” economic turn of events, would not be wise. 
As anticipated, the large financial institutions will be subject to increased oversight. Unfortunately, my understanding is that the Securities and Exchange Commission is going to be the watchdog. Are you kidding me? Now this is a real concern! The SEC, in all due respect, is the very same group that ignored countless warnings about Madoff, slept as the high risk sub-prime were securitized with “A” ratings, while spending thousands of office hours porn surfing. I am not encouraged by this at all. I'm sure you've heard the "sky is falling!" type reports surrounding the passing of this bill, where market journalists, analysts and self proclaimed finance geniuses speculate that the bill will have a harsh impact on banks, which will stall or reverse the economic recovery. Sure there will be some initial impact, but banks have always found ways and means of navigating around the Regs and pulling out their multi-billion dollar profits. Time will tell, my friend times well tell. In the meantime, I shall remain open minded until I get more information about this historic bill might impact the economic recovery.
K. Reilly
Cohn-Reilly Report
___________Comments
Charlie said......
I agree with you about the SEC. The problem is that companies are concerned about how the financial regulations will affect their businesses going forward, along with the impact of health care reforms. As a result, firms are sitting on trillions of dollars in cash, reluctant to commit to hiring the still 9.5% of the population that is unemployed.
I speak to recruiters frequently and they confirm that employees are still working long hours to make up for the lack of staff in their departments. Hiring managers have numerous open requirements for employee spots to be filled, but until senior management can get over this uncertainty, we still will have major hurdles in putting America back to work.
JULY 23, 2010 6:25 AM
Katherine said......
You're right, Charlie. We don't disagree. Except from my standpoint, the Reform Bill is a key contributor, but there are other factors that come into play with respect to companies sitting on cash, and still reluctant to hire. Overall, the concerns are valid: How stable is the market?, How tight will the banks be with distributing credit? , and Will there be liquidity?, These are significant issues where the corporations are concerned, particularly the small companies, who depend on credit to purchase inventory, and make payroll. I definitely get it. Nevertheless, reform was absolutely necessary. We all know the financial industry was out of control, and now we all have to suffer for it. My old boss used to say "This too shall pass". Corporate America will adjust, survive, and eventually thrive again. Yes the economy may stagnate, but it will prevail.
No doubt there will need to be some changes in the Reform Bill – a few nips and tucks before we can strike a balance between consumer protection and keeping the banks motivated.
JULY 23, 2010 7:35 PM
Anonymous said......
Hey....nothing like a healthy debate, right? You both make solid arguments, but I’m more of the wait and see type. These are scary times, but I hear they don’t compare to the great depression – we have it easy. Look. - it’s not going to be the same no matter what we do, so why whine about it. Let’s just man-up and wait it out. Banks are never going to satisfied, and the Wall Street high rollers are moaning because we're raining on their parade. Wall Street and Main Street will never see eye-to-eye. So how do you write legislature that reflects the concerns of both sides. You Don't!
I agree with you about the SEC. The problem is that companies are concerned about how the financial regulations will affect their businesses going forward, along with the impact of health care reforms. As a result, firms are sitting on trillions of dollars in cash, reluctant to commit to hiring the still 9.5% of the population that is unemployed.
ReplyDeleteI speak to recruiters frequently and they confirm that employees are still working long hours to make up for the lack of staff in their departments. Hiring managers have numerous open requirements for employee spots to be filled, but until senior management can get over this uncertainty, we still will have major hurdles in putting America back to work.
You're right, Charlie. We don't disagree. Except from my standpoint, the Reform Bill is a key contributor, but there are other factors that come into play with respect to companies sitting on cash, and still reluctant to hire. Overall, the concerns are valid: How stable is the market?, How tight will the banks be with distributing credit? , and Will there be liquidity?, These are significant issues where the corporations are concerned, particularly the small companies, who depend on credit to purchase inventory, and make payroll. I definitely get it. Nevertheless, reform was absolutely necessary. We all know the financial industry was out of control, and now we all have to suffer for it. My old boss used to say "This too shall pass". Corporate America will adjust, survive, and eventually thrive again. Yes the economy may stagnate, but it will prevail.
ReplyDeleteNo doubt there will need to be some changes in the Reform Bill – a few nips and tucks before we can strike a balance between consumer protection and keeping the banks motivated.
Hey,,,,nothing like a healthy debate, right? You both make solid arguments, but I’m more of the wait and see type. These are scary times, but I hear they don’t compare to the great depression – we have it easy. Look. - it’s not going to be the same no matter what we do, so why whine about it. Let’s just man-up and wait it out. Banks are never going to satisfied, and the Wall Street high rollers are moaning because we're raining on their parade. Wall Street and Main Street will never see eye-to-eye. So how do you write legislature that reflects the concerns of both sides. You Don't!
ReplyDelete