Monday, October 4, 2010
The Dylan Ratigan Show on MSNBC at 4 pm
Not much is going to change as a result of the Dodd-Frank financial reform legislation that passed Congress and was signed into law by President Obama. But, the tearing up of the level playing field started a long time ago. President Clinton signed legislation that brought an end to Glass-Stegall and before that the SEC, and the Fed, under President Reagan, went from protecting all members of our monetary system and our financial markets to not looking out for the interests of the "little guys". This tilting of the level playing field has been going on for quite some time. The financial meltdown of the bond market and the economic recession did not just come about from the 8 years of President George W. Bush's administration, though his administration got the privilege of structuring the bailout.
Dylan Ratigan of THE DYLAN RATIGAN SHOW on MSNBC at 4 pm Monday through Friday has said everything I have written about the financial markets, the Fed, the credit rating agencies and so much more, and yet with the bright lights of cable TV, the shit doesn't stop! And, I ask myself, "what chance does a blog like MONEYTHOUGHTS have if a TV show with the viewership of Dylan Ratigan's Show can't make a dent?"
The Congress goes about fixing many things that need fixing for our financial markets to operate and hopefully operate well with reduced chances of needing more bailouts and giving our large financial institutions the mantel of TOO BIG TO FAIL. Those things that really need to be fixed were not, and so, it is just a matter of time before the next financial disaster strikes. The conflict of interest that exists between the credit rating agencies and the investment bankers that underwrite the new issues of debt offerings has not changed. Congress would not touch this hot issue and because they would not touch it, the potential for another meltdown of the bond market is in place.
The reluctance of Congress to tackle this conflict of interest in the way the credit rating agencies do business is also a reason that the economy is not making a speedy recovery. The movement of debt from borrower to investor is essential in our domestic economy and even with interest rate at the bottom of the range for over 40 years, the economy is not responding. Why?
Congress needs to fix that which is broken. Take the distributor cap off the distributor and the car will not start and if the car will not start the car will not run. But, Wall Street knows this, and yet they would rather fight to maintain the conflict of interest they have with the credit rating agencies than see our domestic economy grow. And, no one in President Obama's administration will point this out to him?
Well, my little blog isn't going to light a fire that is for sure.