January 22, 2010
Obama's 'Volcker Rule' shifts power away from Geithner
For much of last year, Paul Volcker wandered the country arguing for tougher restraints on big banks while the Obama administration pursued a more moderate regulatory agenda driven by Treasury Secretary Timothy F. Geithner.
Thursday morning at the White House, it seemed as if the two men had swapped places. A beaming Volcker stood at Obama's right as the president endorsed his proposal and branded it the "Volcker Rule." Geithner stood farther away, compelled to accommodate a stance he once considered less effective than his own.
The moment was the product of Volcker's persistence and a desire by the White House to impose sharper checks on the financial industry than Geithner had been advocating, according to some government sources and political analysts. It was Obama's most visible break yet from the reform philosophy that Geithner and his allies had been promoting earlier.
Senior administration officials say there is now broad consensus within the White House and the Treasury for the plan advanced by Volcker, who leads an outside economic advisory group for the president. At its heart, Volcker's plan restricts banks from making speculative investments that do not benefit their customers.
He has argued that such speculative activity played a key role in the financial crisis. The administration also wants to limit the ability of the largest banks to use borrowed money to fund expansion plans.
The proposals, which require congressional approval, are the most explicit restrictions the administration has tried to impose on the banking industry. It will help to have Volcker, a legendary former Federal Reserve chairman who garners respect on both sides of the aisle, on Obama's side as the White House makes a final push for a financial reform bill on Capitol Hill, a senior official noted.
Advocates of Volcker's ideas were delighted. "This is a complete change of policy that was announced today. It's a fundamental shift," said Simon Johnson, a professor at MIT's Sloan School of Management. "This is coming from the political side. There are classic signs of major policy changes under pressure . . . but in a new and much more sensible direction."
Industry officials, however, said they were startled and disheartened that Geithner was overruled, in part because they supported the more moderate approach Geithner proposed last year.
"His influence may have slipped," said a senior industry official who spoke on the condition of anonymity to preserve his relationship with the administration. "But you could also argue that it wasn't Geithner who lost power. It's just that the president needed Volcker politically" to look tough on big banks.
Geithner agreed with Volcker that banks' risk-taking needed to be constrained.
But through much of the past year, Geithner said the best approach to limiting it is to require banks to hold more capital in reserve to cover losses, reducing their potential profits. Geithner said blanket prohibitions on specific activities would be less effective, in part because such bans would eliminate some legitimate activity unnecessarily.
The shift toward Volcker's thinking began last fall, according to government officials who spoke on the condition of anonymity because the deliberations were private.
Volcker had been arguing that banks, which are sheltered by the government because lending is important to the economy, should be prevented from taking advantage of that safety net to make speculative investments.
To make his case, he met with lawmakers on Capitol Hill and gave numerous speeches on the subject, traveling to at least nine cities on several continents to warn that banks had developed "unmanageable conflicts of interest" as they made investments for clients and themselves simultaneously.
"We ought to have some very large institutions whose primary purpose is a kind of fiduciary responsibility to service consumers, individuals, businesses and governments by providing outlets for their money and by providing credit," he said during one speech in Toronto. "They ought to be the core of the credit and financial system. Those institutions should not engage in highly risky entrepreneurial activity."
Gradually, Volcker picked up allies. John Reed, the former chairman of Citigroup, expressed his public support. So did Mervyn King, governor of the Bank of England.
His ideas began gaining traction within the administration in late October, when the president convened a meeting of his senior economic advisers in the Oval Office to hear a detailed presentation by the former Fed chairman.
There was no immediate change of course. But after the House passed a regulatory reform bill on Dec. 11 that was largely based on the Geithner's vision, the administration began to warm to Volcker's ideas, which had the political value of seeming tough on Wall Street, said sources in contact with the Treasury and White House.
At the time, administration officials were growing concerned that government guarantees designed to spur lending by letting banks borrow cheaply were instead funding banks' speculative investments and fueling soaring profits, said Austan Goolsbee, a member of the president's Council of Economic Advisers.
"We started coming out of the rescue and you saw some of the biggest financial institutions . . . who had access to cheap financing . . . use that money without lending or anything, just doing their own investments," he said. "That clearly started putting [the issue] on the radar screen for us."
Goolsbee said that Vice President Biden became a particular advocate for Volcker's approach.
In mid-December, the president formally endorsed Volcker's approach and asked Geithner and Lawrence H. Summers, the director of the National Economic Council, to work closely with the former Fed chairman to develop proposals that could be sent to Capitol Hill. The three men had long discussions about the idea, including a lengthy one-on-one lunch between Geithner and Volcker on Christmas Eve.
Summers and Geithner had been reluctant to take on battles that weren't at the heart of the problem that fueled the crisis. But ultimately, an administration official said, the two men concluded that reform needs to be about more than just fighting the last war -- it needs to address sources of future risk as well.
___________________
Volcker and the Mother of All Finanical Crises
Obama's 'Volcker Rule' shifts power away from Geithner
For much of last year, Paul Volcker wandered the country arguing for tougher restraints on big banks while the Obama administration pursued a more moderate regulatory agenda driven by Treasury Secretary Timothy F. Geithner.
Thursday morning at the White House, it seemed as if the two men had swapped places. A beaming Volcker stood at Obama's right as the president endorsed his proposal and branded it the "Volcker Rule." Geithner stood farther away, compelled to accommodate a stance he once considered less effective than his own.
The moment was the product of Volcker's persistence and a desire by the White House to impose sharper checks on the financial industry than Geithner had been advocating, according to some government sources and political analysts. It was Obama's most visible break yet from the reform philosophy that Geithner and his allies had been promoting earlier.
Senior administration officials say there is now broad consensus within the White House and the Treasury for the plan advanced by Volcker, who leads an outside economic advisory group for the president. At its heart, Volcker's plan restricts banks from making speculative investments that do not benefit their customers.
He has argued that such speculative activity played a key role in the financial crisis. The administration also wants to limit the ability of the largest banks to use borrowed money to fund expansion plans.
The proposals, which require congressional approval, are the most explicit restrictions the administration has tried to impose on the banking industry. It will help to have Volcker, a legendary former Federal Reserve chairman who garners respect on both sides of the aisle, on Obama's side as the White House makes a final push for a financial reform bill on Capitol Hill, a senior official noted.
Advocates of Volcker's ideas were delighted. "This is a complete change of policy that was announced today. It's a fundamental shift," said Simon Johnson, a professor at MIT's Sloan School of Management. "This is coming from the political side. There are classic signs of major policy changes under pressure . . . but in a new and much more sensible direction."
Industry officials, however, said they were startled and disheartened that Geithner was overruled, in part because they supported the more moderate approach Geithner proposed last year.
"His influence may have slipped," said a senior industry official who spoke on the condition of anonymity to preserve his relationship with the administration. "But you could also argue that it wasn't Geithner who lost power. It's just that the president needed Volcker politically" to look tough on big banks.
Geithner agreed with Volcker that banks' risk-taking needed to be constrained.
But through much of the past year, Geithner said the best approach to limiting it is to require banks to hold more capital in reserve to cover losses, reducing their potential profits. Geithner said blanket prohibitions on specific activities would be less effective, in part because such bans would eliminate some legitimate activity unnecessarily.
The shift toward Volcker's thinking began last fall, according to government officials who spoke on the condition of anonymity because the deliberations were private.
Volcker had been arguing that banks, which are sheltered by the government because lending is important to the economy, should be prevented from taking advantage of that safety net to make speculative investments.
To make his case, he met with lawmakers on Capitol Hill and gave numerous speeches on the subject, traveling to at least nine cities on several continents to warn that banks had developed "unmanageable conflicts of interest" as they made investments for clients and themselves simultaneously.
"We ought to have some very large institutions whose primary purpose is a kind of fiduciary responsibility to service consumers, individuals, businesses and governments by providing outlets for their money and by providing credit," he said during one speech in Toronto. "They ought to be the core of the credit and financial system. Those institutions should not engage in highly risky entrepreneurial activity."
Gradually, Volcker picked up allies. John Reed, the former chairman of Citigroup, expressed his public support. So did Mervyn King, governor of the Bank of England.
His ideas began gaining traction within the administration in late October, when the president convened a meeting of his senior economic advisers in the Oval Office to hear a detailed presentation by the former Fed chairman.
There was no immediate change of course. But after the House passed a regulatory reform bill on Dec. 11 that was largely based on the Geithner's vision, the administration began to warm to Volcker's ideas, which had the political value of seeming tough on Wall Street, said sources in contact with the Treasury and White House.
At the time, administration officials were growing concerned that government guarantees designed to spur lending by letting banks borrow cheaply were instead funding banks' speculative investments and fueling soaring profits, said Austan Goolsbee, a member of the president's Council of Economic Advisers.
"We started coming out of the rescue and you saw some of the biggest financial institutions . . . who had access to cheap financing . . . use that money without lending or anything, just doing their own investments," he said. "That clearly started putting [the issue] on the radar screen for us."
Goolsbee said that Vice President Biden became a particular advocate for Volcker's approach.
In mid-December, the president formally endorsed Volcker's approach and asked Geithner and Lawrence H. Summers, the director of the National Economic Council, to work closely with the former Fed chairman to develop proposals that could be sent to Capitol Hill. The three men had long discussions about the idea, including a lengthy one-on-one lunch between Geithner and Volcker on Christmas Eve.
Summers and Geithner had been reluctant to take on battles that weren't at the heart of the problem that fueled the crisis. But ultimately, an administration official said, the two men concluded that reform needs to be about more than just fighting the last war -- it needs to address sources of future risk as well.
___________________
Volcker and the Mother of All Finanical Crises
March 15, 2009It was a moment of brazen honesty. On February 20, the don of Obama’s Economic Recovery Advisory Board and former chair of the Federal Reserve, Paul Volcker, told a conference at Columbia University’s Center for Capitalism and Society that, in essence, we’re screwed. Volcker said the crash of 2008 might be “the mother of all financial crises… I don’t remember any time, maybe even the Great Depression, when things went down quite so fast, quite so uniformly around the world.”
Paul Volcker and crew laugh it up at your expense.
In other words, it is all going as planned, this “mother of all financial crises.”
As a Rockefeller darling and member held in high esteem at the Trilateral Commission who worked at the Fed (as in Federal Express) in the name of Rothschild, Warburg, Rockefeller and other European banking elitists, Paul Volcker knows what the end game is — a world monetary system and eventually a one-world government with a high-tech control grid overlay.
In The True Story of the Bilderberg Group, Daniel Estulin writes:
In the late 1970s, then-Federal Reserve Chairman, Paul Volcker — a Trilateralist, who once worked for the Rockefeller’s Chase Manhattan Bank — didn’t mince words when he told the American people how… “economic pressures” would affect them. “The standard [of living] of the average American has to decline.”
Jose Barroso, President of the European Commission, was dead serious in 2007 when he said the ruling elite have a “post-industrial age” in mind for us. “To bring the world into the post industrial age, you first need to destroy the world’s economic base and create another Great Depression,” Estulin explains (Bilderberg 2007: Welcome to the Lunatic Fringe).
Obama’s “stimulus” is the latest phase of this effort to create another Great Depression, or rather a Greater Depression. It is a debt and inflation tool designed to pump up another bubble in the economy. It is a built-in demolition of an already stressed economy. It is how the global elite and the banksters will take control and create their world banking empire and one-world government.
It is no mistake Volcker, who has long called for the decline of living standards, and Obama’s backstage guru, Zbigniew Brzezinski, figure so prominently in this administration with its preponderance of CFR, Bilderberg, and Trilateral Commission members.
“Over the last few months, I’ve kept in touch with some extremely well-connected individuals who have been cluing me in on what’s really happening behind the scenes in the world of global finance,” writes Mike Adams. “For obvious reasons, these people shall go unnamed, but what they’re now telling me is that the economic meltdown is merely a means to an end. It is being done deliberately, they say, at the very highest levels to achieve a well-planned outcome. What outcome is that? Global rule over all banking, of course.”
It also means globalist rule over humanity.
In his book, The Technotronic Era, Brzezinski wrote that “people, governments and economies of all nations must serve the needs of multinational banks and corporations.” Doctor B. also called for a scientific dictatorship and said it “will soon be possible to assert almost continuous control over every citizen and to maintain up-to-date files, containing even the most personal details about health and personal behavior of every citizen in addition to the more customary data.” It is said this book was commissioned by the Club of Rome, the globalist think tank that published a report entitled Limits to Growth in 1972.
It was further spelled out in 1974 when the Trilateralists published a report entitled The Crisis of Democracy sponsored by David Rockefeller and Brzezinski. It calls for centralized economic and social planning, centralization of power in Congress, an onslaught of programs designed to dumb-down and lower the expectations of the middle class, and place limitations on the Constitution and the Bill of Rights.
During Volcker’s address at the Columbia University’s Center for Capitalism and Society he said only new forms of international financial regulation will save us from the yawning catastrophe. “All banks must be supervised and regulated, but those of systemic significance around the world, which, almost inevitably… are international, they’re not just national, will be subject to a particular layer of supervision,” said Volcker.
It will be a dictatorial and tyrannical “layer of supervision” by a small number of eugenicists looking to cull us by way of “economic pressures” resulting in a “post-industrial age.”
Obama’s crew is now suddenly laying on the salve in preparation for the slide into the abyss. “President Obama said Thursday the nation’s economic woes are not as dire as they seem and said his economic policies will get the country back on track,” reports the New York Daily News.
In other words, Obama wants you to take your eye off the ball because it is going to be one hell of a ride.
http://www.infowars.com/volcker-and-the-mother-of-all-finanical-crises/
related articles ~
Should Secretary Geithner Step Down?
*** Links - Nationalize the Banks ... Plan Moving Forward ...