As reported on HuffPost last week, Treasury Secretary Timothy Geithner has expressed opposition to the possible nomination of Elizabeth Warren to head the Consumer Financial Protection Bureau, according to a source with knowledge of Geithner’s views.
One can assume that Geithner, being very close to the nation’s biggest banks, is concerned that Warren, if chosen, will exercise her new policing and enforcement powers to restrict those abusive practices at our commercial banks that have been harmful to consumers and depositors.
Certainly, Warren is not the commercial banking industry’s first pick to serve in this new role. And unlike other legislation in which an industry’s lobbying effort would naturally slow or cease once the legislation is passed, the new financial reform bill is continuing to attract enormous lobbying action from the banks. The reason is simple. The bill has been written to put a great deal of power as to how strongly it is implemented in the hands of its regulators, some of which remain to be chosen. The bank lobby will work incredibly hard to see that Warren, the person most responsible for initiating and fighting for the idea of a consumer financial protection group, is denied the opportunity to head it.
But this is not the only reason that Geithner is opposed to Warren’s nomination. I believe Geithner sees the appointment of Elizabeth Warren as a threat to the very scheme he has utilized to date to hide bank losses, thus keeping the banks solvent and out of bankruptcy court and their existing management teams employed and well-paid.
There are a lot of reasons to like the idea of a consumer financial protection agency. My colleagues Barbara Kiviat and Michael Grunwald have made the more substantive ones here, here and here. But I think I have stumbled across possibly the most telling data point yet on why the CFPA is likely a good idea: Jamie Dimon is scared of debating Elizabeth Warren on the topic. It’s not because Dimon is not passionate about the topic. Privately, Dimon and other JP Morgan exeuctives have been strongly making their case in Washington against starting a new agency, even one housed at the Fed, to monitor consumer protection in the banking business.
But when White House Chief of Staff Rahm Emanuel called a top J.P. Morgan executive to ask for the bank’s support in creating a new consumer-protection agency, the executive—former Commerce Secretary William Daley—said no, according to people familiar with the conversation. His boss believed that sufficient consumer safeguards were already on the books.
Nonetheless, I have put some phone calls in and Dimon is unwilling to take Warren on in person and debate the topic. Dimon is a smart guy. So the fact that he is scared to debate Warren on the topic means that he knows he can’t win. Here’s why:
First a recap. Elizabeth Warren is a Harvard law professor that also heads up the Congressional Oversight Panel, which has monitored the TARP program with hearings and studies. A few years ago, after studying a number of abusive lending practices regularly engaged in by the nation’s largest banks, she came up with the idea of launching a Consumer Financial Protection Agency. In Warren’s vision, it would be federally funded and separate from other regulators. It’s only job would be to assess whether the loans and other products sold by banks are fair and safe for consumers. Much like the FDA does for drugs. Obama loves the idea. And so it has been batted around as part of the reform effort, and is included, in a weaker form, in Dodd’s reform bill. Here’s what FDIC chief Sheila Bair had to say about Warren and her proposal in the TIME 100 this week:
A bunch of legendary comedians got together to make a sketch, where the punchline is: "establish a Consumer Financial Protection Agency". It’s kinda a funny, but mostly because of the Darrell Hammond’s imitation of Clinton making sexual innuendos, and Fred Armisen’s impersonation of Barack Obama. It seems director Ron Howard was trying to find something to ‘do good’, so he chatted with the earnest and overeducated Elizabeth Warren, and decided consumer financial regulation was the kind of smart idea that would obviously work. After all, who’s against consumer protection?
I am! This is the same government that goaded banks to lower standard to lend more to historically damaged communities, and then when those borrowers defaulted, blamed such lending on the banks. Avoiding the poor is redlining, targeting the poor is predatory, which means, whatever goes wrong can be blamed on the banks. Government always wants to have its cake and eat it too: low taxes & high spending, high growth and union-type work rules, banks lending more today and raising their capital.
The CFPA tries to do what most regulators try to do: improve efficiency, eliminate waste, consolidate regulations,simplify regulations, protect consumers, and protect jobs! It seems banks are greedy and basically uregulated, leading directly to the 2008 housing crisis. There are seven government bodies already regulating banks, highlighting how incredibly naive this proposal is. If there’s a magic bullet for improving efficiency, etc., share it with existing regulators…unless you think that all the regulators have been captured by some interest group, which if true just means we are bringing in one more interest group to advocate why they should get a better deal.
More importantly, if your concern is about the irrational poor people easily duped by huckster bankers, lower prices and penalties on the poor doesn’t help them, it enables them. Life has carrots and sticks, and one definition of a vice is that which generates bad outcomes in the long run. If you are constantly overdrafting your account, don’t have enough money to make a 20% down payment on a property, you need better financial discipline. Helping the poor from being trapped by debt should try to minimize they amount of debt they have, say by increasing rather than lowering prices on credit cards.…
The love affair was no surprise. Nor was the fact that the IMF had taken part in the immolation of Greece. No, the surprise was that the IMF would publicly disclose the extent of incompetence and massive rule breaking that had taken place.
The Ambrose Evans-Pritchard byline told me this would be a good story. Here’s his lead:
The International Monetary Fund’s top staff misled their own board, made a series of calamitous misjudgments in Greece, became euphoric cheerleade...
This morning's Second Estimate of Q2 GDP at 1.1% was a ho-hum event in advance of Fed Chair Yellen speech at Jackson Hole. And indeed the intraday range volatility of today's session was at the 70th percentile of the 165 market days of 2016 and the widest in 37 sessions. The S&P 500 opened higher, rallied with the opening of her speech, and then sold off sharply during with Vice Chairman Stanley Fischer's suggestion that a couple of rate hikes this year were possible. The index bounced back later in the afternoon to its -0.16% Friday close. The index is down 0.68% for the week.
The yield on the 10-year note closed at at 1.62%, up four basis points from the previous close.
Here is a snapshot of past five sessions in the S&P 500.
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Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer. One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."
Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.
Genetic components are the DNA sequences that are 'inherited.' Some of these genes are stronger than others in their expression (e.g., eye color). Yet, some genes turn on or off due to external factors (environmental), and it is und...
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