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Why killing Dodd-Frank could lead to the next crash - Eliminating the bill was a top priority for Trump. So why did any Dems vote for it?
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- Title
- Why Killing Dodd-Frank Could Lead to the Next Crash
Historically crashes happen at the end of October. They also happen when there is single party control of the legislature and presidency. They also happen every eight or so years, so we're about due.
Couple that with the fascist rhetoric of the White House and GOP, lack of real political leadership, the fact that we as a country are deeply in debt, and interest rates are already very low and it looks pretty grim. There are few good options available to competent leadership, which we are certainly lacking.
October is the end of the fiscal year for many (maybe most?) businesses.
So what I'm hearing is I should pull my money out of the stock market early October and wait till sometime in November or December?
Each subsequent 'recession' since 1991 have been more profound than the last. I fear the next time we won't escape with our skin intact. The reason I say this is because central banks worldwide necessarily used avant-garde interventions that today probably can't applied at the same levels. For better or worse, those interventions very narrowly averted a protracted deep depression globally.
The trigger for the next one will be different than the last. It is important to say that hubris was extreme just prior to the last one. It is also important to say that the complexities of global financials systems make it nearly impossible to predict when and how the next one will occur. There are definite warning signals now.
Laissez-fare economics led to the last recession, the suspension of Glass-Steagall deepening an already craven system that allowed excessive risk taking without skin in the game. Dodd-Frank was weak but necessary to address a minimum of those risks.
The opaque derivatives market is bigger than prior to 07/08. It remains opaque and unregulated. So while Dodd-Frank is anemic, it is important and is an important regulatory feature to assessing and maintaining banking integrity. The arguments that it overly burdens small banks should be considered if true but throwing the entire bill away isn't a solution, amend it. Don't throw the baby out with the bathwater.
This headline makes my heart die.