Comment Text:
it is necessary that we safeguard banks from speculating with insured money, that their depositors are not exposed to excessive risk.
i do not want the CFTC to think that there are no public interest in these rules. public interest appears to be high on this subject, yet many people feel unable to address the specific rule-making because they lack specifics or because they don't know what happened but they know they lost $ over the last several years. i think they lost $ because of the financial "innovations" that were dreamed up by speculators and stockbrokers. the quest for profits seemed to have overwhelmed the market. there appears to be no thought about the interest of investors or companies. rather, wall street seems to regard their ability to make profit in anything as sacred, whether it hurts the world economy or not.
the banks should lose their charter or decide just to be banks again. further, institutions that have been convicted of fraud should not be allowed to remain in the financial marketplace. certainly, an individual stockbroker, convicted of fraud, could not retain their license. the same should be true of a corporation. i doubt that you can accidentally engage in fraud.
banks don't need warehouses of stuff so that they can manipulate the price of a commodity, take a higher bite of profit when the price is high and take a lower bite of profit when the price is low. banks do not need warehouses. this would give them inside information for speculation. banks don't need subsidiaries. banks have abused the privilege of trading and have harmed the economy. banks are trusted institutions and this is an industry that exists for the common good of its citizens. all of these profits have not been passed through to the shareholder, but rather have been given in bonuses to their staff.
banks think that the economic interconnectedness (which banks and brokers have fostered) safeguarded their interests and kept regulation at bay. the government gave TARP funds because of this. however, it appears that banks have continued to abuse the marketplace. we would be better off with institutions that did not do this extreme speculation.
this article speaks for itself:
http://news.yahoo.com/insight-wall-street-fed-face-off-over-physical-182249976.html
NEW YORK (Reuters) - Wall Street's biggest banks are locked in an increasingly frantic struggle with the Federal Reserve over the right to retain the jewels of their commodity trading empires: warehouses, storage tanks and other hard assets worth billions of dollars.
While the battle over proprietary trading and new derivatives regulations has taken place largely in public view since the 2008 financial crisis, the fight by JPMorgan Chase, Morgan Stanley andGoldman Sachs to retain or expand their prized physical commodity operations - most acquired in only the past six years - has remained hidden.
The debate is nearing an inflection point: Within 18 months, the Fed will likely either allow banks more freedom to invest in the physical commodity world than ever; or force them to sell off the assets that many banks are counting on to buttress their trading books at a time when they are already vulnerable because of intensifying competition and new trading curbs.
The banks are now locked in deep debate with the Fed, multiple sources involved in the discussions told Reuters. Goldman and Morgan Stanley argue the right to own such assets is 'grandfathered' in from their lightly-regulated investment banking days, or that at least they should be allowed to retain them as "merchant banking" investments, kept segregated from the trading desks.
