I am laughing right now, really.
Not because the market opened down more than 1% this morning; that’s only funny if you’re short (okay, I’m laughing a little).
And not because we’re all still here; it is 12-21-12, you know!
I am laughing at what happened last night. I am laughing that House Speaker John Boehner’s “Plan B” for the Fiscal Cliff wasn’t even voted on.
Why not? I can’t imagine – it had all the right stuff.
According to Mr. Bonehead’s website, “The bill focuses on stopping waste, fraud, and abuse in federal programs, eliminating government slush funds (including an ObamaCare slush fund), and reducing waste and duplication in government bureaucracies.”
And that was just the trash talk about cutting wasteful spending in the bill. He also wanted a tax cut for Americans making under a million dollars a year. I’m for that!
So what’s making me laugh, when on the surface the bill seems to make some sense?
It’s what you can’t see (because most of it is hidden, or if it’s there it’s buried) that’s funny. In fact, two things in the bill are so funny that they almost brought me to tears.
Let’s go have a laugh together.
First, because House Republicans want to cut wasteful spending, they offered to cut funding for the newly minted Consumer Financial Protection Bureau. Brilliant!
We don’t need more oversight of money-grubbing schemers or consumer protection from banks and money…oh, I said that already.
The House bill wanted to tether the CFPB’s budget to Congressional appropriation, on account of the fact that they want to slice it and dice it, and, yes, kill it. That’s an elegant way to bludgeon it to death.
How is the CFPB funded now? Oh, it gets an automatic percentage of the Federal Reserve Board’s operating expense budget. Where does that come from? Don’t even get me started on that one. Although, considering the kind of stuff that gets Insights & Indictments readers going…Okay, you got it. I will cover that for you in detail in the near future – and you will love it!
Back to what’s so funny about Plan B.
Second, because House Republicans want to cut wasteful spending, they offered to eliminate the Office of Financial Research. Why that obscure little office? Because that’s where the Dodd-Frank Wall Street Reform & Consumer Protection Act provided for the breakup of too-big-to-fail banks that actually fail (is that an oxymoron, or just moronic?) by means of an Orderly Liquidation Authority.
House Republicans, with the filthy hands of their puppeteer masters – the morons from the TBTF banks – showing below the top of the curtain above where they rattle and hum, are saying there’s savings in cutting them thar stupid rules.
To understand why I’m laughing, you have to get my humor. And to get that, all you have to understand is that there is nothing to cut
See, back in April when the Republican-led House Financial Services Committee tried to ram this through in the Sequester Replacement Reconciliation Act of 2012 – that went nowhere – they calculated there would be $22 billion in savings if you eliminated the Orderly Liquidation Authority.
But there is no $22 billion.
There is no cash-flow from any part of that Authority to cut. There may be some tiny savings from eliminating the tiny budget (it’s not established yet) of the Office of Financial Research, but there ain’t no $22 billion!
What there is, if that’s cut out, is a toll-free highway for the TBTF banks to keep growing and to never, ever, ever, be challenged or threatened with being dismantled.
Which is okay with me. Why? Just because I love to laugh.
Why am I laughing? Because the Office of the Comptroller of the Currency (OCC) just had a closed-door “convention” to talk with bank directors about how safe the banks really are.
Nineteen of the country’s biggest banks were looked at, and guess what? They all failed.
That’s why I’m laughing – they all failed.
Do you get it? That’s funny. The too-big-to-fail banks all just failed an OCC stress test. Come on, that’s funny!
Again, it’s what’s behind the closed doors that’s funny.
The OCC now thinks it has to put far more importance on testing banks’ compliance policies, on operational risks, and on strategic and reputation risks. They now think that’s more important than testing bank’s credit and interest rate exposures, asset price exposure, trading activity, and liquidity risks. Brilliant!
According to Mike Brosnan, an OCC veteran who heads large bank supervision, “For the first time in my life, we actually say this basket of risks is more important, and more of a priority for the system to deal with, than asset quality, liquidity, interest rate risk and trading activities.” He told The American Banker, “It makes us uncomfortable as examiners, because it’s not how we were trained.”
Now, that’s funny! These guys are now going to concentrate on stuff they’re not even trained in? You just can’t make this stuff up.
“Plan B”. That was funny to start with. It’s even funnier that it didn’t get to see the light of a “No” vote.
But what’s really funny is what’s going on behind closed doors for the soul of our economy and the safety of our savings (what savings?) and our pensions (what pensions?) and our future (what future?).
Really, I am laughing because it’s better than crying.
I hope you are, too.