OK, so to discuss Obama's actions of yesterday, who's against it, who's with it.

[Werner_1]

I believe Obama proposed this idea too soon, yes, they want to change the system to not allow for financial meltdowns again in the future, but this will cost in terms of economic recovery. Who agrees with Obama, who does not?

[PLayer]

This whole thing of Obama's speech and the timing with China's pull back seems to be motivated to assist the dollar win back some ground.. the timing is a bit too sweet..... I believe that getting banks to be a safer place makes sense in the long term but this should have been done over a period of time rather than bang in.. His health reform has taken a knock and this is his way of saving face... China's for long term good but I think the economy has already started to burn a matter of time....

[warhippo]

First of all I don't believe too many of us (myself included) fully understand the American banking system that much to give a very informed opinion here . However, the way I understand it is that Banks in USA are hereby prohibited from "Gambling" with their customers money and stick to/or return to basic banking - rules to be laid down by new law. The TARP money from the American tax payers was used to bail out banks who squandered their customers money away on non banking related issues. It seems as if they are up to their old tricks again with not very much control. There are still probably a couple of thousand banks left in USA and a few name changes might take place under new law. Profits might also come in lower from the old traditional banks. If I belief myself here I don't have a problem with Mr. Obama's announcement

[THRESHOLD]

Having just (shock) lost Kennedy's sear and had his healthbill proposal cast into doubt, this smacks of a political statement.

[THRESHOLD]

Having just (shock) lost Kennedy's seat and had his healthbill proposal cast into doubt, this smacks of a political statement.

[richardw]

I'm with Obama, who seems finally to be with Volker. I don't understand enough to be fully informed, but now that the economy is out of 'critical' there's no reason to start working on the solutions. Everyone has been positive on the economy, so if that's so brittle because of a few rules then it's not real. If growth is a bit slower, but much safer, I'm all for it.

[Werner_1]

see this article, i agree that this will negatively effect growth in the economy and not be good for stocks: http://www.cnbc.com/id/34978454 - The general idea is not bad to reduce risk, but to stop the large banks from doing what they do, e.g. have diversified business is not right in my opinion. e.g. our banks have the same strategies, they have prop trading desks, banking operations, etc. Stopping these huge companies from running their businesses (if well managed) is not good, they tried this in 1933 with Glass Steagel act which was lifted in 1999. What i dont understand is that they say they dont want to split these large firms up, but how must they run their business if its not allowed to be housed in the group?

[warhippo]

This is the whole point. There are various diversified busineses that these banks can and did involve themselves with. And then they came crying to the government when they burnt their fingers and lost innocent depositors money!! after silly ventures undertaken by them. Which is precisely what happened.

[Werner_1]

there are some of the banks that didnt burn their fingers, they actually stronger off and this is negatively effecting them, e.g. JPMC which i really like... I guess in general if implemented properly it might be good, but it must be gradual and not all in one go otherwise it will hamper the profits of the banks now and that will negatively effect the economy and maybe put Citi in a even worse situation... to reduce risk they not allowed to lend to risky home owners (now much more of them exist and people arnt spending, so its much more difficult to make money with conventional banking - luckily for investment banking which the firm is pretty good at, hopefully this will be allowed to be associated to conventional banking still...) The banks that operate properly actually use things like credit default swaps to reduce risk by speading it to others (third party), thats the main reason why JPMC invented then in the first place, so the guys buying them speculated (their own stupidity) but the issuer actually used it to reduce risk. lol..

[Werner_1]

So i am happy now... Citigroup analyst Keith Horowitz upgraded JPMC today, saying after the drop from yesterday the firm offers excellent entry point and the impact of the Obama proposed plan would only effect normalised earnings by 2%. not bad... JPMC rules. lol...

[richardw]

I think the intent is more important than the specific rule. It's a sign that the administration is after reducing risk, so I think it's safe to assume there will be other similar rules. For example, CDS etc being brought into exchanges, or more oversight of dark pools...