Tanning salons sigh relief as bullseye shifts to big banks

Big winner from Mass results are tanning salons since taxing them was going to fund part of ObamaCare.  Maybe, just maybe, they dodged a bullet.

Now, the administration is picking on somebody its own size — the Wall street banks.

Since the announced “fee” on big banks got some populace traction, why not put on a full court press?

* * * * *

WSJ: Proposal Set to Curb Bank Giants, Jan. 21, 2010
 
President Barack Obama is expected to propose new limits on the size and risk taken by the country’s biggest banks, marking the administration’s latest assault on Wall Street in what could mark a return, at least in spirit, to some of the curbs on finance put in place during the Great Depression.

The past decade saw widespread consolidation among large financial institutions to create huge banking titans. If Congress approves the proposal, the White House plan could permanently impose government constraints on the size and nature of banking.

The goal would be to deter banks from becoming so large they put the broader economy at risk and to also prevent banks from becoming so large they distort normal competitive forces.

Mr. Obama is also expected to endorse measures which would place restrictions on the proprietary trading done by commercial banks, essentially limiting the way banks bet with their own capital.

The proposal could have the biggest effect on Bank of America Corp., Wells Fargo & Co., and J.P. Morgan Chase & Co., which control a large amount of U.S. deposits, as well as Goldman Sachs, Morgan Stanley and Citigroup Inc., which have a large presence on Wall Street.

The rules could also keep banks out of the business of running hedge funds, investing in real estate or private equity, all businesses that have become important, profitable parts of these banks.

If investors believe the new rules could take effect, they could sell off the shares of most of the big financial stocks in the belief these companies would be facing years of turmoil and potentially lower profits.

The White House proposal would seek to return the “spirit of Glass Steagall,” meant to limit large banks from becoming too big and complex that create enormous risk.

Full article:
http://online.wsj.com/article/SB10001424052748704320104575015910344117800.html?mod=WSJ_hps_LEFTWhatsNews

One Response to “Tanning salons sigh relief as bullseye shifts to big banks”

  1. Scott Says:

    Undoubtedly your your best headline yet…

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