Who needs coffee these days when you can wake up to a mugshot of Senator Snatch on the front page of your Salt Lake Tribune. Today our esteemed Senator from the great state of denial, Utah, is whining about Mexico’s President Calderon stating the all to obvious fact, “America is supplying the weapons as well as the demand for drugs in our little drug war down south.”
Unfortunately I can’t talk about that now because of my short attention span. You see my buddy “Vinny,” was just lecturing me on the details of the Financial Reform Bill “the party of no” is bitching about. No, not Joe Pesci, who appeared in “My Cousin Vinny,” back in 1992.
But Vinny is an Italian-Amercian and he once accidentally sent me a fish wrapped up in newspaper awhile ago. Seems he got my address confused with someone else’s.
He’s pissed because he made his money the old fashion way; by the hard work of running prostitution rings, numbers rackets and selling insurance. Drugs weren’t his thing and that got him in trouble with his other Italian buddies and he had to retire to Vegas.
But back in the day when he was making money, complex derivatives didn’t exist and that’s why I think he is mad (or jealous). Also things were regulated back then and it was tougher to make a buck. He was also mad he didn’t get in on the Savings and Loan bonanza, nor was he ever into real estate (Vinny did own a cement company once I think).
First he says to me, “Repubs opposed the financial reform bill mostly because they are philosophically against regulation and government involvement in business. “Hey, I had to pay off the cops to keep them out’da my business. I couldn’t afford no lobbyist either, first they didn’t exist and second they cost too much.Plus they never came down to Little Italy-we are not good enough for them.”
“Also, those politicos received huge donations from the financial company’s institutions and that included those damn Democrats too-and members of my own party. Things started to go south when that B movie actor got to White House.”
“But Georgie, now he really screwed things up. That frat boy SOB’s deregulation of the banks over the past 8 years helped to cause the ongoing crisis that has cost America 8 million jobs and $10 trillion of household wealth since 2007.”
“I ain’t no saint, never said I was, but I’m an American-especially since they kicked me and my family out of Sicily. Besides, I had some money in supposedly safe mutual funds and they tanked too. Cement galoshes for some of those guys I say.”
Vinny continued to go on and on about this derivative thing and what I gathered, he was mad because he felt derivatives were legalized gambling. “I don’t make any money when gambling is legal,” he bellowed.
I should know better than to interrupt Vinny when he’s on a roll but I just had find out what the big bad bill was really all about so I asked, “Vinny where’s the beef?”
“Senate bill….lots of provisions: new authority for FDIC to seize and breakup troubled firms, establishment of consumer protection agency, public exchange for derivatives and banks will have to spin off their derivative trading businesses, new capital requirements and leverage restrictions for banks, depending on size and others,” he spat at me.
“You dumb Guido (I’m not even Italian) don’t you know that financial firms insured by FDIC and with access to the fed borrowing window, will now be treated, as they should be, like public utilities with much more oversight and government monitoring of management.”
“But why is that such a big deal to business,” I asked? “Boy are you stupid, how do you think the world’s economy was brought to its knees,” Vinny roared. “It took me putting a gun to someones head to get them on their knees,” he continued.
I could see he was getting really mad when the veins on his neck stood out but stupid me should have tried to change the subject but ,since I had some money in a few stocks too, I asked him how he felt about the legislation now in reconciliation with the house.
“Believe it or not it’s a really good thing. Not as tough as I would have liked, for example, doesn’t state firm capital requirements for banks or specifically limit leverage, but does impose a lot more supervision and oversight. As an investor we need the regulators to be wide awake and not bought off-that’s my job. There is a provision that would move derivative trading to an exchange, which is a big plus,” Vinny concluded.
With all he had just told me I just couldn’t figure out why my Senator voted against the bill but then I remembered Vinny’s advice, “Follow the Money Stupid.”