A federal judge on Wednesday delivered a significant setback to the Obama administration’s efforts to rein in the financial sector and prevent a repeat of the conditions that caused the 2008 financial crisis.

In 2014, a government panel run by Treasury Secretary Jack Lew determined that MetLife should come under stricter federal scrutiny, essentially calling the nation’s largest life insurance company “too big to fail.” With that designation, MetLife would be forced to set aside a bigger financial cushion and put in place other safeguards to protect taxpayers if it fell into financial trouble.

MetLife sued, arguing that the new rules would force it to raise prices, and on Wednesday, U.S. District Judge Rosemary M. Collyer sided with the New York-based firm. Collyer did not explain her decision in the two-page ruling.

“From the beginning, MetLife has said that its business model does not pose a threat to the financial stability of the United States,” Steven A. Kandarian, MetLife’s chairman and chief executive, said in a statement. “This decision is a win for MetLife’s customers, employees and shareholders.”
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This defeat could also give ammunition to Republicans in Congress who have argued that Dodd-Frank goes too far. The act “ominously grants the Federal Reserve near de facto management authority over such institutions, thus allowing huge swaths of the economy to potentially be controlled by the federal government,” Rep. Jeb Hensarling (R-Tex.), chairman of the Financial Services Committee, said in a statement.

Jeb Hensarling (R-Tex.), This guy is a quite the shit stain.

https://www.washingtonpost.com/business/economy/metlifes-escape-of-too-big-to-fail-label-is-defeat-for-obama-administration/2016/03/30/9b9859b4-f6a3-11e5-a3ce-f06b5ba21f33_story.html

General Electric Co. asked U.S. regulators to drop its designation as a too-big-to-fail financial firm, one of the central goals of Chief Executive Officer Jeffrey Immelt’s decision a year ago to sell the bulk of the lending business.

Shedding the label would free up billions of dollars in capital and remove restrictive oversight while underscoring a dramatic overhaul of the industrial giant’s operations. Immelt has pulled GE almost entirely away from the banking business built up under former CEO Jack Welch and renewed the company’s focus on making heavy-duty machinery.
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GE’s announcement came a day after MetLife Inc. won a court ruling removing it from the ranks of systemically important companies. In a lawsuit filed last year, the life-insurer said the designation, used to identify companies whose failures would threaten U.S. financial stability, was arbitrary and unjustified. The government can appeal the ruling. GE decided to work with regulators on an exit strategy rather than go to court.

http://www.bloomberg.com/news/articles/2016-03-31/ge-seeks-escape-from-too-big-to-fail-tag-as-overhaul-nears-end

Gee! My heart really goes out for theses guys. Not!

Iceland is the only nation that put top finance executives behind bars after the 2008 crisis. Still, fears of crony capitalism remain.


Kviabryggja Prison in western Iceland doesn’t need walls, razor wire, or guard towers to keep the convicts inside. Alone on a wind-swept cape, the old farmhouse is bound by the frigid North Atlantic on one side and fields of snow-covered lava rock on another. To the east looms Snaefellsjokull, a dormant volcano blanketed by a glacier. There’s only one road back to civilization.

This is where the world’s only bank chiefs imprisoned in connection with the 2008 financial crisis are serving their sentences, Bloomberg Markets magazine reports in its forthcoming issue. Kviabryggja is home to Sigurdur Einarsson, Kaupthing Bank’s onetime chairman, and Hreidar Mar Sigurdsson, the bank’s former chief executive officer, who were convicted of market manipulation and fraud shortly before the collapse of what was then Iceland’s No.?1 lender. They spend their days doing laundry, working out in the jailhouse gym, and browsing the Internet. They and two associates incarcerated here—Magnus Gudmundsson, the ex-CEO of Kaupthing’s Luxembourg unit, and Olafur Olafsson, the No.?2 stockholder in the bank at the time of its demise—can even take walks outside, like Kviabryggja’s 19 other inmates, all of whom were convicted of nonviolent crimes.

It may not be hard time, but it’s a far cry from the giddy days when the Kaupthing bankers hosted parties for clients aboard yachts in Monte Carlo and hired the likes of pop legend Tom Jones to serenade guests at London galas. In sentencing these financiers to serve terms of up to 5½ years, the Icelandic courts have done something authorities in the world’s two great banking capitals, New York and London, haven’t: They’ve made bankers answer for the crimes of the crash. “The Icelandic banks went overboard,” says Olafur Hauksson, the onetime small-town police chief who in January 2009 was appointed special prosecutor to investigate the banking cases. “They were basically bankrupt.”

http://www.bloomberg.com/news/features/2016-03-31/welcome-to-iceland-where-bad-bankers-go-to-prison

This is a good read. Maybe I should send this link to Obama just for grins and to say I did.

British Steel Is Beyond Saving.
With the announcement that Tata is looking to sell its British plant in Port Talbot, South Wales (a decision which also affects its plants in three other U.K. cities) the great rebalancing project for the British economy looks in danger. The temptation will be to find some way to rescue the steel plants in the name of the broader goal; but that would be a mistake.

Since the financial crisis, the British government has been hoping to see some of Britain's output move from finance to manufacturing, from the prosperous south of the country to the ailing industrial north, from consumption to investment and from imports to exports. Chancellor of the Exchequer George Osborne noted back in 2014 that “the recovery is not yet secure and our economy is still too unbalanced." Britain, he argued, was not investing enough and not exporting enough. "We can’t be passive observers of the forecasts. We need to roll up our sleeves, get to work and make it happen.”
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As even the left-wing Guardian notes “the problems of the steel industry will not go away.” Pouring millions of pounds of British taxpayer money into the industry to support jobs may not be well-advised. Tata are said to be losing up to a million pounds a day on the Port Talbot plant alone, which employs around 5,500 workers, equating to a loss of around £180 per worker per day. Subsidies are all very well if they help to place an industry in a strong enough position to save jobs in the long-term. However, if they merely postpone an inevitable shake-out, they are a waste of money.

http://www.bloombergview.com/articles/2016-03-31/britain-s-steel-industry-is-beyond-saving

Found this in LBN.
http://www.democraticunderground.com/10141397513

Go and click on the link and have a good read.