Volcker Rule Being Deep-Sixed (just like every other economic "reform" the Admin. announces")

As readers may recall, we had argued over a series of posts that the proposed Volcker rule, to bar proprietary trading at commercial banks, did not go far enough in reducing systemic risk. While the concept was so sketchy that it was difficult to be certain what it meant, it appeared to have two serious flaws.

(snip)

All these debates appear to be moot. The Volcker rule is following the tried and true path of all Obama “reforms”, meaning an idea announced with great fanfare is being whittled back to meaninglessness.

The media are differing a bit on the particulars of how the neutering operation came to pass, but the general direction appears clear. The New York Post appears first out with the story (before reader howl, the Post has broken some financial stories and the discerning FT Alphaville picked up on this one, hat tip Richard Smith):



Yves here. This is an intriguing reading of the dynamics. On the one hand, Timothy Geithner is so embattled that not only is he being interviewed in Vogue, but he takes a surprisingly defensive stance. Yet the Treasury engage in a turf war with the White House and wins. Or perhaps the climbdown is more a function of Congressional opposition (this change would require new legislation). The Senate Banking Committee made it abundantly clear it was not happy to see Team Obama retrading its financial reform bill at such a late juncture.

(more)
http://www.nakedcapitalism.com/2010/02/volcker-rule-being-deep-sixed.html

no matter how they try to rationalize it.

With the vast majority of all the people in the entire nation calling for blood, demanding change, wanting strong and strict regulation to lock down wall street, supporting him in reigning in banks and investment houses, he gives in again. :(

:wtf:

Obama can never have a position so strong, a battle in which he is so mighty, a competition in which he has so overwhelmingly the greater power, that he can't throw it all away by being politically timid. x(

Sadly.

and now it's further gutted!

This is most dissapointing.