John Mauldin, who understands the financial markets, is outraged at the proposed financial reforms. Here are the flaws, in his view.
How can we allow banks to be too big to fail?
Where is the reinstatement of Glass-Steagall? If we are going to allow large banks to exist, then their leverage must be reduced to the point where their failure would not risk the system and require taxpayer dollars. I don't care if that makes them less profitable. They are making those large profits because they have taxpayers implicitly behind them, and I get no dividend payments from them, the last time I checked.
Where is Fannie and Freddie reform (and their breakup)?
No mention of an exchange for credit default swaps?
This bill reads as if bank lobbyists wrote it. Where is the populist outrage? We have let the fox set up the rules for running the hen house. Shame on us all if we allow this to happen.
Perhaps the bank lobbyists did write it, and our "leaders" will just sign off on it and continue to over promise and over spend. That's what they do and they're good at it. This cannot end well.