Financial regulation in USA

17 comments on “Financial regulation in USA ”

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1. gingercrush 1

   17 July 2010 at 1:16 pm

   Financial regulation in the US and elsewhere still doesn’t the solve the obvious problem plaguing developed countries. That being our ability to gorge debt and to re-gorge that debt. Its a problem that will take years to unwind and its one of the big reasons the recovery isn’t the recovery expected. In most countries the problem is not only personal and business debt but also huge government debt. And while Asia is proving a saviour. China and other Asian countries dependency on developed countries wealth means eventually that flow-on will affect their economies.

   Meanwhile, issues of finite resources, global warming and an aging population will only cause more problems.
   • Mr Shennanigans 1.1

     17 July 2010 at 5:26 pm

     In New Zealand though private debt is the biggest problem, making government debt pale into insignificance. Any ideas about how we reduce private debt?
     • loota 1.1.1

       17 July 2010 at 5:49 pm

       Could be done easily enough but Govts are always loathe to tighten the screws on the economy due to the inevitable reduced spending which will result. Basically everyone was given easy credit to make it look like there was ‘growth’. Well that was sustainable.

       Limit credit card credit limit increases, increase cr card minimum payments required, implement minimum deposits required for hire purchases and mortgages, increase the return on standard savings vehicles,…
       • Mr Shennanigans 1.1.1.1

         17 July 2010 at 10:05 pm

         Housing borrowing’s the big problem though isn’t it? Largely because there was a belief that prices would always go up and up, and the fact that a lack of new houses drove up prices unrealistically.

         Not sure what the solution is there though. I mean if you do something to lower prices that won’t reduce the private debt, and will just mean that people struggle to re-finance.
         • gingercrush 1.1.1.1.1

           18 July 2010 at 11:35 am

           Well you could lift New Zealand’s wages though that in itself doesn’t improve things because in simply having more money most of that gets spent anyway and doesn’t solve the issue of savings. In Australia you see that with their record housing inflation where Australians now have larger houses than the US.

           Compulsory savings does increase savings in any country but its rather artificial and doesn’t actually change behaviour.For instance if this country made Kiwisaver compulsory. Yes that would lift the savings levels of all New Zealanders. But still we’d gorge ourselves in debt and because we have certain savings level we’d probably feel more comfortable in getting ourselves in debt. Thus, you need to decrease taxation on savings. Something this National government should have done when they reduced income and business tax and hiked GST and depreciation taxes. Frankly, any savings under $100, 000 should not be taxed period meanwhile investment in retirement schemes and sharemarkets should also incur far less taxes. GST hike should change consumer behaviour to an extent but at the end of the day, you still need to buy groceries, petrol, electricity etc. The government also needs to do more to lessen investment and speculation in housing and land. Many of New Zealanders business especially the small ones including farms etc is dependent on capital gains while in the interim borrowing. That behaviour needs changing. Though how you do that is debatable.

           I personally don’t subscribe to the view that increasing the availability of land etc makes housing more affordable and drive prices down. Indeed, the noughties opened up numerous land and saw more and more houses available. In doing that we as New Zealand simply saw housing inflation increase.
           • Mr Shennanigans 1.1.1.1.1.1

             18 July 2010 at 12:51 pm

             GC, I also don’t subscribe to the view that urban limits have caused, by themselves, housing inflation over the past 10 years. However, imposing urban limits hasn’t really been balanced through the increased availability of housing stock within the urban limits – in that there has been insufficient intensification.

             The lack of housing (rather than land) supply I think has clearly driven up prices, which has contributed to the problem. We’re also pretty hopeless at our efforts to improve housing affordability – it’s not even a matter of national (or any) importance in the RMA.
2. vto 2

   17 July 2010 at 1:48 pm

   Here’s an idea… don’t use debt ever again. Goes for govts and people. If scale of funding is required do it through equity type structures.

   Neither a borrower nor a lender be ( an old and pertinent saying).
3. more_ben 3

   17 July 2010 at 4:48 pm

   Unfettered capitalism?

   Ah, no. Not even close.
4. loota 4

   17 July 2010 at 5:07 pm

   How I wish I could go to the casino, lose huge at the tables with other peoples’ monies, get the tax payers to bail me out to the tune of many many digits, and just keep on playing.
5. Whiskey Tango Mike Foxtrot 5

   17 July 2010 at 5:13 pm

   Since Wall Street now owns the White House, I’m not surprised that they have given power to break up any remaining independent ownership, not to mention giving the fed more power. I bet China is pissed at them too, printing off dollars to pay ’em with. At least we can pay China with coal! Or maybe China is making America pay for the extraction of hard to get to wealth?
   You tag em, i’ll bag em.
   • loota 5.1

     17 July 2010 at 5:15 pm

     Excuse me, you talk of Wall St owning the White House as if its a recent phenomenon? :confused:
6. Jum 6

   17 July 2010 at 10:21 pm

   It was interesting to hear English talking about using Kiwibank, Trustbank, Taranaki Savings Bank, etc to help New Zealand out with loans while the foreign Australian banks were treating us badly, as anyone with two braincells could have told him would happen.

   Foreign ownership means no loyalty to New Zealanders.

   It makes me sick that English is now blaming New Zealanders for not saving enough when a) they got rid of the superannuation fund which Australia didn’t and b) the freemarket banks and marketers and loan sharks and moneytraders were plying Kiwis with money over the last ten years. People are not perfect. They fall prey to the pondscum that insist they must have these ‘things’ to make them successful. NAct’s bankers are the ones we should be blaming for bring New Zealand to its balance of payment knees.
   • gingercrush 6.1

     18 July 2010 at 11:22 am

     Oh right so its entirely National’s fault that during Labour’s reign in power, New Zealanders gorged on debt, foreigners brought New Zealand land and businesses, numerous manufacturing companies disappeared from New Zealand and the balance of payments blew out while we saw gross housing inflation that now sees far fewer New Zealanders owning their own house.

     Nine years is a bloody long time for any government to make meaningful changes. To actually blame National for everything is frankly pathetic when Labour enjoyed the best economic decade since the 50s and had the electoral support at numerous times to change the direction of New Zealand.That they didn’t because everything was so easy means that government was utterly useless.

     Its with bizarre logic that most of the things the left dislike about New Zealand, its economy etc either took place under Labour or were excaberated under Labour’s watch.
     • Descendant Of Smith 6.1.1

       18 July 2010 at 11:42 am

       Its with bizarre logic that most of the things the left dislike about New Zealand, its economy etc either took place under Labour

       No most took place under the previous National Government or the earlier Labour government

       or were excaberated under Labour’s watch.

       Yes to some – but many were improved though not as much as I would like and nor as quickly.

       My overall summation of the behaviours is that they have followed the mass of the population called the baby boomers with much policy revolving around their needs – lots of assistance while they raised their families with more individualised support as their families left home.

       Left wing values and a shared vision for the country as an egalitarian society got left behind as both parties chased the votes and corporate business began again to dominate the world stage.

       It’s not a conspiracy though it’s just how big business operates.

       I had much more times for the greens who at least came across as caring for something not just ideologically driven. Maybe the problem partly for Labour is that those people who did openly care and may have made a greater difference wandered off to the Greens – the human face has partly disappeared with many local MP’s being invisible.

       There’s no easy answers to why we are where we are at.

       Fundamentally the left needs to work out what left means and then see if the people support it.
7. joe90 7

   18 July 2010 at 12:35 pm

   Meanwhile….six banks fail.

   Regulators closed six banks in three states Friday, bringing this year’s total number of bank failures to 96.
8. Meany Beany 8

   21 July 2010 at 6:36 am

   The debt bomb was a (Western) World Wide problem caused by globalisation and oil cartels. Governments can do very little about limiting private debt, but can at least compel it’s citizens to save, reducing NET private debt. Compulsory Kiwisaver is the best answer and should be a plank of Labour’s next manifesto. The reduction from 4% to 2% should be immediately reversed and then slowly (over a decade or more) increased to around 10%. . . with a minimum of 25 – 35% of each being required to be invested locally to boost business investment here in NZ. . . so that we are not reliant on overseas investors who will take even more of our profits overseas.

   This measure would solve lots of issues.

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1. The Standard: posted on 17 July 2010 at 12:30 am

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