The Senate version of financial regulation is bad for business on Wall Street. "Some analysts estimate it could cut the profits of major financial institutions by roughly 20%," reports the Wall Street Journal.Anyone who's been paying attention to this blog knows the real reason why the market is crapping out: the Fed and the European Central Bank, as well and the unhinged casino greed of the banksters. But the rush is now on to pin all the problems happening now on legislation that's not even law yet, with dire warnings that the economy is doomed because the poor, poor banksters won't make as many billions when it comes to bonus time.
It’s also bad for the economy, says Robert Prechter, president of Elliott Wave International. Prechter believes the measures are doing the exact opposite of their intention. “Even though they (the government) want credit to expand, because that’s the base of inflation, they’re doing everything they can to restrict it,” he tells Aaron in this clip.
"On one hand we have the Fed trying to jawbone banks into lending but the government is doing everything it can to curtail the lending," he continues, noting the Senate’s bill will mean smaller bank profits, which in turn means less money to lend. It also plays into Prechter's thesis that the economy is headed for deflation and depression.
Gosh, who will speak up for the lobbyist in Washington? Their voices are never heard...
In all seriousness however, expect to see much, much more of this as the market goes south: "Financial Regulation caused the crash!" The truth is putting off financial regulation for 16 months after Obama took office caused this particular cockup.
The banks went right back to the casino tables and now they're about to lose another couple trillion. guess who's paying for THAT one?
PS...it won't be the banks.