The worldwide banking overhaul has begun. Good or Bad? You decide.
President Obama has declared war on the World’s biggest banks.
What does this mean to the average man or woman on the street?
Well here is Trumpo’s five minute overview.
The current giants of the banking world are basically using your savings to go and gamble on the stockmarket, and when things are good they are very very good and when they go bad they are wicked – hence the financial crisis we are embroiled in.
President Obama has quite rightly acted upon the utter disgust of the average USA tax paying citizen over the average $500,000 bonus being handed out to Goldman Sachs staff in the worst economic crisis since the great depression. These businesses are only thriving because the man on the street has bailed them out. In a global economy, it’s near impossible to restrict salaries and bonuses. In a free market this should never be the case. However through regulation governments can prevent the banks using the average persons life savings to gamble with, which they so blatantly have been doing to maintain these huge bonuses and consequently putting the individual tax paying saver at risk.
President Obama has quite rightly put the wheels in motion to seperate the risks in the banking world. If you put your savings in a bank they should be safe. Your £10,000 savings should not be freely available for a 20-something hedge fund guru to bet on the performance of some weird and wonderful toxic loan bond.
President Obama has bascially said a big fat NO to the current super-banks ability to dip into peoples savings and has proposed the break up of the high-risk (hedge funds etc.) and the low-risk (traditional savings and lending) so that they will be run completely independently
I think President Obama is spot on, and whilst the performance of a lot of the banks share prices and profits may now be hindered because the racy side of the banking world can’t now dip into the cookie jar and access Mr and Mrs Jones’ life savings, it will be a far safer banking world as a result.
Well done President Obama – come on Brown and Cameron, what are we doing in the UK?
Your Trumpo.
You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
January 22nd, 2010 at 2:44 pm
If you want to be able to pay back monies due, you need the best people to enable this transaction, risk can often be good judgement when it works. President Obama has clearly done this with his own agenda in mind and it would seem there has been litttle colabration with the IMF or other financial worldwide institutions. there does not yet seem to be the impact expected in the UK, lets see! The world financial landscape will change when the $ losses its dominence as countries reject its importance or value, how will he react to that?
January 22nd, 2010 at 2:49 pm
Hi Kevin
I agree it may be an Obama motivated play to get the US people on his side for his health reforms, but I don’t think we can argue with a provision for a clear division when it comes to risk strategies.
January 22nd, 2010 at 2:57 pm
Greetings Kevin the quicker the FSA realise that what Obama is doing is what they should be doing the better for the UK Mortgage and Building Markets.
January 22nd, 2010 at 3:00 pm
To my mind, this is the obvious thing to do otherwise the Bank (let alone the bank employee) has nothing to loose by taking major gambles; if it goes wrong the cavalry aka the public come to their rescue. But from what I can tell, under Obama’s plans, if it goes wrong the bank can go bust. The difference is, they won’t take everyones savings with them and so there will be no need for a bailout. How anyone can complain about this proposal is beyond me. I just hope out gutless policitians follow his lead – bet they won’t though – it might offend someone.
January 22nd, 2010 at 3:40 pm
I’m delighted that someone has a conscience. Obama’s agenda or not he has taken the right step. These banks because of their mess, thousands are losing jobs even in the banks. As at today companies and governments are cutting back and making people (tax payers who bailed these banks out) redundant. I’m a mortgage broker suffering the consequences of these financial disasters and some ‘Fat Cats’ are sharing bonuses? Where is righteousness and equity. FSA and UK government should look in the right direction where the problem is coming from and take a bold step like Obama did.
Our lives and livelihood that we work for shouldn’t be in the hands of so called Speculators taking dangerous risks and playing tik tak toh with our future. “Well done Barak Obama”
January 22nd, 2010 at 3:42 pm
As I understand it the breakup bit is exactly what Mervyn King (for whom i have a lot of respect) has been saying.i.e. let us go back to safe banking with deposits being lent out on mortgages (properly asceesed). Then no need for goverenment bailouts.
Speculative banking to be done with shareholders (NOT Depositors) money & if they go bust TUFF.
Also he says if the government Mantra of its too big to go bust then it is too big. Therefore make it smaller.
January 22nd, 2010 at 3:53 pm
Nick – You are spot on, Mervyn King has been championing common sense banking for some time, so why hasn’t he been supported? I have a sneaky feeling that to many conflicts of interest exist with the regulatory and govermental decision makers, after all what are the best paid jobs in the city – Non Exec Positions at the Banks!