Is the authority Geithner is requesting a "Power Grab" ?

Currently the administration isn't able to nationalize/seize/shut down anything but Banks....
but the real problems seem to be coming from the Insurance and Hedge Fund industries.

So why is the media framing this as some kind of dubious issue? :shrug:





After Dodging Many Bullets, Hedge Funds Are Back in Regulators' Sights
Published: March 18, 2009 in Knowledge@Wharton

The hedge fund industry has a long history of avoiding tougher regulation. But as the Obama administration and Congress look for ways to avoid another financial meltdown, that history may soon come to an end.

Although it is not clear that hedge funds actually played much of a role in the current crisis, the industry's sagging performance, combined with investors' and regulators' heightened demand for transparency, will likely cause big changes in the way these secretive investment pools operate, suggest several Wharton faculty members.

Worries about hedge funds are likely to escalate after The Wall Street Journal reported on March 18 that the now-notorious insurance giant AIG might use taxpayers' money to make good on hedge funds' bets that the housing market would fall. At the same time that the government is struggling to revive housing, it could spend billions rewarding hedge funds that profit from the housing decline, the paper said.

Critics have long wanted a regulatory crack-down on hedge funds, arguing that regulators, investors and the public at large know too little about how this industry influences the financial markets. But the industry has staved off regulatory pushes, the most serious of which was a 2005 Securities and Exchange Commission proposal to require the funds to register with the agency and submit to some scrutiny. The industry challenged the move, and in 2006 a federal court ruled that the SEC did not have that authority.

Now the push for regulation is gathering momentum. A bill introduced on January 29 by Senators Carl Levin, a Michigan Democrat, and Charles E. Grassley, a Republican from Iowa, would give the SEC authority to regulate hedge funds. Grassley argues that the political mood has changed since two years earlier, when he had introduced a similar bill that went nowhere.

Obama Administration officials also are pushing for tougher regulation, though how tough is still to be determined. According to news reports earlier this week, the administration's broader plan for tighter regulation of the finance industry would include assigning greater oversight of hedge funds to the Federal Reserve. Stricter rules might require the funds to make public disclosures. Conceivably, tough rules could even limit hedge funds' ability to borrow money to supercharge bets, or even curb some high-risk investments. The guiding principal will likely be to assure that a fund's activities can hurt only its investors, not innocent bystanders. And it seems apparent that any regulation will come in stages, with the initial disclosure requirements leading to new rules as hazards are detected.

The 10,000 funds control about $1.5 trillion in assets, according to industry estimates. Hedge funds grew dramatically over the past two decades as investors sought market-beating returns, but now hundreds of money-losing funds have shut down and investors are clamoring to get their money back from many others. "The hedge fund industry is really swooning at this point," says Thomas Donaldson, professor of legal studies and business ethics at Wharton. "We're watching an industry whose bubble has popped."

"We will see a major shift in regulation in the next year or so," adds Wharton finance professor Richard Marston, referring to oversight of the entire financial industry, including hedge funds. "I don't really care if the rich in Palm Beach are fleeced.... I care whether businesses in Philadelphia suffer because hedge funds have set off a panic in financial markets. Hedge funds didn't this time. The banks did it. But next time, it may be the hedge funds."

more... http://knowledge.wharton.upenn.edu/article.cfm?articleid=2185


list of banks seized since 2008....

The FDIC is often appointed as receiver for failed & seized banks.

TeamBank, National Association, Paola, KS March 20, 2009 March 24, 2009
Colorado National Bank, Colorado Springs, CO March 20, 2009 March 24, 2009
FirstCity Bank, Stockbridge, GA March 20, 2009 March 24, 2009
Freedom Bank of Georgia, Commerce, GA March 6, 2009 March 11, 2009
Security Savings Bank, Henderson, NV February 27, 2009 March 11, 2009
Heritage Community Bank, Glenwood, IL February 27, 2009 March 11, 2009
Silver Falls Bank, Silverton, OR February 20, 2009 March 10, 2009
Pinnacle Bank of Oregon, Beaverton, OR February 13, 2009 March 10, 2009
Corn Belt Bank and Trust Company, Pittsfield, IL February 13, 2009 March 10, 2009
Riverside Bank of the Gulf Coast, Cape Coral, FL February 13, 2009 March 10, 2009
Sherman County Bank, Loup City, NE February 13, 2009 March 10, 2009
County Bank, Merced, CA February 6, 2009 March 10, 2009
Alliance Bank, Culver City, CA February 6, 2009 March 10, 2009
FirstBank Financial Services, McDonough, GA February 6, 2009 March 10, 2009
Ocala National Bank, Ocala, FL January 30, 2009 March 10, 2009
Suburban Federal Savings Bank, Crofton, MD January 30, 2009 March 10, 2009
MagnetBank, Salt Lake City, UT January 30, 2009 March 10, 2009
1st Centennial Bank, Redlands, CA January 23, 2009 March 10, 2009
Bank of Clark County, Vancouver, WA January 16, 2009 March 10, 2009
National Bank of Commerce, Berkeley, IL January 16, 2009 March 10, 2009
Sanderson State Bank, Sanderson, TX
En Español December 12, 2008 February 5, 2009
Haven Trust Bank, Duluth, GA December 12, 2008 March 17, 2009
First Georgia Community Bank, Jackson, GA December 5, 2008 February 2, 2009
PFF Bank and Trust, Pomona, CA November 21, 2008 February 2, 2009
Downey Savings and Loan, Newport Beach, CA November 21, 2008 February 2, 2009
The Community Bank, Loganville, GA November 21, 2008 February 5, 2009
Security Pacific Bank, Los Angeles, CA November 7, 2008 February 2, 2009
Franklin Bank, SSB, Houston, TX November 7, 2008 February 2, 2009
Freedom Bank, Bradenton, FL October 31, 2008 February 2, 2009
Alpha Bank & Trust, Alpharetta, GA October 24, 2008 February 2, 2009
Meridian Bank, Eldred, IL October 10, 2008 February 10, 2009
Main Street Bank, Northville, MI October 10, 2008 February 10, 2009
Washington Mutual Bank, Henderson, NV and Washington Mutual Bank FSB, Park City, UT September 25, 2008 February 2, 2009
Ameribank, Northfork, WV September 19, 2008 March 17, 2009
Silver State Bank, Henderson, NV
En Español September 5, 2008 March 10, 2009
Integrity Bank, Alpharetta, GA August 29, 2008 February 5, 2009
The Columbian Bank and Trust, Topeka, KS August 22, 2008 February 2, 2009
First Priority Bank, Bradenton, FL August 1, 2008 February 5, 2009
First Heritage Bank, NA, Newport Beach, CA July 25, 2008 February 5, 2009
First National Bank of Nevada, Reno, NV July 25, 2008 February 5, 2009
IndyMac Bank, Pasadena, CA July 11, 2008 March 20, 2009
First Integrity Bank, NA, Staples, MN May 30, 2008 February 2, 2009
ANB Financial, NA, Bentonville, AR May 9, 2008 February 5, 2009
Hume Bank, Hume, MO March 7, 2008 February 5, 2009
Douglass National Bank, Kansas City, MO January 25, 2008 February 5, 2009
http://www.fdic.gov/bank/individual/failed/banklist.html

Complain about the bonuses (and foment faux populist
rage) ... but to deny the government (Treasury, in
this case) the authority to do anything about it.

Talk about OBSTRUCTIONIST ...

I mean, wasn't the media "concerned" about the AIG Bonuses?
They've dedicated a week to it!

scary under someone like Bush. That being said, it needs to be done. Wonder what those who want nationalization here think of this? Does it go too far or is it a positive step towards nationalization?

A government with all the checks and balances in place would be scary in Bush's hands. For one thing, he could screw up a lot in the time it took to hold him accountable, even if we're talking few months.

Considering I am wall street stupid, what I hear about hedge funds and short selling (?) sounds like they control our economy more than the media wants to acknowledge. When Congress made noises not long ago about investigating how oil was traded and if there were dirty dealings causing the cost to go up it was shocking that within about a week the price of oil started dropping.

Those Senate and House bills sound like a worthwhile debate. Let's get them on...

deciding they are now President. Wait a minute isn't that what Alexander Haig did when Reagan was shot?

Or the military took control over all highways even though it falls under control of the Dept of Transportation.

Since Geithner and the Obama administration are reaching for power that they currently aren't allowed to have.

On a more practical matter, I hope that they fail in this plan, since the taxpayers are already on the hook for trillions of dollars from the bank and AIG bailouts. My thought is let those who live by the capitalist sword die by the capitalist sword. We don't need to be bailing out hedge funds and insurance companies, hell, we shouldn't have bailed out Wall St. to begin with.

As I understand it, all the cries for nationalization miss one key ingredient. Apart from declaring a national emergency (which is extreme in the extreme), currently there is no authority within the federal government to seize "non bank" financial institution. The FDIC can handle banks, but that's different.

One problem is that the line between what's a bank, and what's an insurance company has blurred over the years. So, doesn't the ability to seize a company that is actually operating as a bank need to broaden to meet these changes?

In this case, you should say HELL NO

take over some banks and financial institutions----call it nationalization, or 'patriotization,' or 'pink & purple polka dot-ization,' or whatever

G's getting things in place now....