Lincoln Provision Will and Fed Power Remain in Financial Reform Package — The biggest issue for the conference committee has been the tough language by Sen. Blanche Lincoln (D-Ark.) to restrict trading in the loosely regulated securities known as derivatives. The passage is opposed by the White House and some key regulators, but House Financial Services Chairman Barney Frank (D-Mass.) said a version will remain in the final bill.
“Oh, yes — it was always the case,” Frank said during a Politico interview. Thursday also saw the Federal Reserve emerging from the conference with most of the same power and independence its officials feared they might lose. The final bill likely to emerge from Congress could impose some new limits on the Fed, but these limits are rather incidental and will not impede the Fed in any meaningful way from business as usual.
What Will Financial Reform Accomplish? — According to Chairman Frank, “Consumers will be much better protected, there will be no recurrence of the subprime mortgage crisis, and there will be no more ‘too big to fail.’ If you get too indebted, you will fail.”
According to Austan Goolsbee,”D.C.’s Funniest Celebrity,” and a member of the White House Council of Economic Advisers:
The Consumer financial protection agency will govern some of the Wild West practices that some financial institutions had engaged in … there will be, hopefully, more confidence of people in the stability of their financial institution … and people are not going to have to be thinking that their tax money is going to go to bailing out financial institution.
Naturally, Republicans disagree, saying, “this bill allows for endless taxpayer bailouts of Wall Street and establishes new and unlimited regulatory powers that will stifle small businesses and community banks.”
Maybe that Swiss Account Wasn’t Such a Good Idea — U.S. citizens and residents with UBS accounts should soon hear from the IRS now that the Swiss Parliament ratified an agreement to surrender the names of 4,450 bank clients. They really should be prepared, however, since UBS has previously told the 4,450 clients their account data would be given to the Swiss Federal Tax Administration, which would then determine if it should be disclosed to the IRS.
The SFTA said Thursday that it had already reviewed 3,000 accounts to determine if they met the criteria for transfer to the U.S. and has already disclosed the names of 500 consenting account-holders. At least 16 UBS clients have been charged with tax crimes in the case. Two UBS bankers and three other alleged enablers of tax crimes also have been charged. At least 150 other Americans are under criminal investigation, the Justice Department said last year.
“Operation Stolen Dreams” — The Wall Street Journal reports that the Justice Department on Thursday announced the arrests of nearly 500 people in a nationwide “takedown” of mortgage scams, many of them directed at homeowners in financial distress. Federal and state authorities in the past three months have seized or recovered for victims more than $200 million, and have identified losses of $2.3 billion stemming from hundreds of mortgage-fraud cases.
This year has reportedly had more scams involving government economic-stimulus programs, fraudulent leasing of foreclosed properties and tax-related fraud, the FBI said. One prevalent type of fraud targets homeowners in financial trouble, promising to help save their homes from foreclosure. “Most of these foreclosure fraudsters take your money and run,” says the government’s dedicated website, www.stopfraud.gov.
Your Company Can Read Your Texts on Company Equipment – In a ruling that is sure to resolve countless barroom arguments, the Supreme Court unanimously upheld on Thursday a California police department’s audit of text messages on an officer’s city-issued pager, ruling the audit did not violate his constitutional rights. The officer in question used a pager issued to him by the department to send thousands of personal text messages, some of which were sexually explicit, to his wife, mistress and a fellow officer. A senior police official later read the messages as part of an audit.
The officer sued the official and the city, arguing that his Fourth Amendment rights had been violated. The Supreme Court disagreed in a narrowly worded ruling that concluded the search was reasonable, but avoided taking any firm stance on expectations of privacy with regards to electronic communications.
Major Stock Indexes Close % Chg
DJIA 0.15
Nasdaq 0.11
S&P 500 0.12
DJ Total Stock Market 0.10
Russell 2000 0.15
Global Dow 0.12
Japan: Nikkei Average -0.04
Stoxx Europe 50 -0.01
UK: FTSE 100 -0.06