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Jul 21, 2010

Gerald Celente Opinions About Financial Reform Of Obama's Administration. July 21st., 2010

MarketWatch : Industry - Financial Services.- Stocks to Watch Thursday July 22nd.,Amazon, Microsoft July 21st., 2010


Stocks to Watch: Stocks to watch Thursday: Amazon, Microsoft  
By Rebecca L. McClay MarketWatch
7/21/2010 8:31:00 PM

Among the companies whose shares are expected to see active trading in Thursday’s session are Amazon, AT&T and Microsoft. 

By Sun Huixia Caixin Online
7/21/2010 7:36:00 PM

Fund management companies in China suffer heavy losses in the second quarter of 2010 because of a downswing in stock markets, reports Caixin Online. 

MarketWatch : Personal Finance Daily / Personal Finance Stories. July 21st., 2010


Personal Finance Daily
JULY 21, 2010

Wednesday's Personal Finance stories

By MarketWatch

Don't miss these top stories:

With all the action first on health reform and then on bank reform -- not to mention the recession and the millions of unemployed workers, and etc. -- tax law has taken a bit of a back burner in the Capitol Hill cafeteria.

But you can be sure lawmakers aren't ignoring the tax code, because come Dec. 31 the Bush tax cuts will expire.

Related to those tax cuts, today a few wealthy Americans stood tall to say they're eager, ready and willing for Congress to reinstate the estate tax. Read our story today for more on that.

Under current law, there's no estate tax in 2010, and if you die in 2011, you'll face a 55% tax on your estate worth more than $1 million. That's a high tax rate, and a low exemption threshold. (Back in 2001, the president and Congress apparently assumed that lawmakers would tweak the law before a decade had passed. So much for that assumption.)

Seems unlikely Congress will let us slide into 2011 without some change to estate-tax law. But, in this tough economic climate, what will lawmakers do with regard to the expiration lower income-tax rates? I'm sure we shall find out not long after their August recess.

Meanwhile, don't miss our stories today on how two big loopholes in the bank-reform will affect you, and on why that new law may well delete "free" in front of the words "checking account."

-- Andrea Coombes , Personal Finance editor


Bring back the estate tax, some rich Americans say

What do Disney heir Abigail Disney, hedge-fund billionaire Julian Robertson and former Treasury secretary Robert Rubin have in common? They want rich people to pay estate taxes and they say they're willing to pay those taxes themselves.
See story on bring back the estate tax, some rich Americans say.


Watch out for two big bank-reform loopholes

For all the consumer protections that the sweeping and historic financial-regulations bill puts in place, there are two major loopholes that should serve as a warning to consumers that predatory lending will not disappear.
See Jennifer Waters's Consumer Confidential.

Here come higher checking-account fees

The sweeping financial regulation signed into law Wednesday by President Barack Obama may have a direct and visible effect on millions of bank account holders in the U.S.
See story on bank reform may end era of free checking.

Will the financial overhaul work?

The U.S. Senate passed the biggest overhaul of the banking industry since the Great Depression and it has the potential to be a toothless tiger.
See story on will the financial overhaul work?


SEC proposes limits on mutual-fund fees

Changes to mutual-fund fees that could benefit investors were approved by securities regulators on Wednesday.
See story on SEC proposes limits on mutual-fund fees.

Tax-sensitive bond funds are costly, risky

On paper, at least, so-called tax-aware bond funds look ideal for any working person's investment portfolio.
See Robert Powell's Your Portfolio.

AARP to liquidate its mutual-fund lineup

Bowing to competitive pressure from rival mutual-fund firms and the proliferation of exchange-traded funds, AARP, the membership group for people aged 50 and over, said it will liquidate its lineup of stock and bond funds.
See FundWatch on AARP to liquidate its mutual-fund lineup.

Big drop in consumer sentiment not the kiss of death

Not only has there been no follow-through this week to last Friday's report of a big drop in consumer sentiment, the stock market has turned in back-to-back gains.
See story on big drop in consumer sentiment not the kiss of death.

Mining Interactive : Fundamental Reseach Initiates Coverage of Mawson Resources. July 21st., 2010

July 21, 2010


Dear Friends:

Exciting days and months ahead for Mawson and its well managed exploration team. 
Stay Closely Tuned - - There is much more to come from Mawson!!!

Nick L. Nicolaas
Mining Interactive "Ahead of the Pack"


MiningInteractive Videos
Click Here

Stay tuned for the most recent updates on Mawson Resources and other leading mining companies through the MiningInteractive Video Interviews.
Nick L. Nicolaas
(604) 657-4058

FORBES ASIA : Analyzing Asia's Affluent. July 21st., 2010

Latest Stories

Analyzing Asia's Affluent

Analyzing Asia's Affluent
HSBC surveys some of Asia's richest to find out how they invest.
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His Second Coming

His Second Coming
Grand and game-changing. That's how Mukesh Ambani thinks up business ideas.
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China's Spills

China's Spills
The Chinese people are demanding a clean environment--and maybe more.
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What If Small Cars Are A Bust?

What If Small Cars Are A Bust?
Despite oil spills, climate change and terrorism, it's hard to get Americans to buy small.
Read More Read More

Culture Warriors

Culture Warriors
Iraq's vibrant, yet struggling, art scene.
Read More Read More
Click for updates:

ABC News: Australia Business. July 21st., 2010

Environmental studies continue for mine expansion plan
Mining giant BHP Billiton says it is working through environmental studies as part of its plan to develop a new open-cut mine in Queensland's north-west.

Tasmania not fully on the radar
There are concerns Launceston airport has been left with inferior air traffic control after a portable radar system was switched off in favour of a cheaper system with less coverage.

More Australian Stories > 

FOX BUSINESS : Breaking Business News.- Bernanke Bust: Dow Slumps. July 21st. 2010

05 2010 Traders 04 276
Bernanke Bust: Dow SlumpsThe Dow suffered a triple-digit selloff as comments from the Fed chief didn't sit well with traders.


More 'Stress' for European Banks

Is the World Broke? Investment banking income may have fallen about 40% from last quarter.

Senate Approves Extending Jobless Aid

Jobless workers are one step closer to reclaiming federal unemployment-insurance benefits.

Fed Chief: Outlook Uncertain

The FOMC chief told lawmakers the Fed is ready to take further actions if the economy slows more.

Starbucks Brews Up Strong Profit

The coffee giant reported its third-quarter net income rose to $207.9 million as revenue increased 8.7%.

Who Will Protect Us?

Is Elizabeth Warren the best candidate to head the new consumer protection agency? | WATCH

U.S. Markets at Close. July 21st., 2010


Market Snapshot
Index Last Change %Change  
DJIA 10,120.53 -109.43 1.07% Hilighted
Nasdaq 2,187.33 -35.16 1.58%  
S&P 500 1,069.59 -13.89 1.28%  
FOX 50 776.40 -9.17 1.17%  
DIJA Chart
 Bernanke Bust: Dow Drops 109 on ‘Uncertain’ Fed
 JPMorgan's Dimon Not Invited to FinReg Bill Signing


7/21/2010 4:30:00 PM ET DJ30 PointChange: -109.43 Level: 10120.53 NASDAQ PointChange: -35.16 Level: 2187.33 NQ100 PercentChange: -1.3 R2K PercentChange: -1.9 SP400 PercentChange: -1.5 SP500 PointChange: -13.89 Level: 1069.59 NASDAQ-Adv:668 Dec: 1959 NYSE-Adv:992 Dec: 2018
[BRIEFING.COM] A negative response to comments from Fed Chairman Bernanke sent the stock market to a sharp, broad-based loss after most of the session had been spent in choppy, sideways trade.
Stocks opened with solid gains as market participants initially showed a more positive response to the latest round of earnings than they had in recent sessions. Strength was broad in the early going, but some of the best gains came from financials, which were up as much as 1.5% on the back of better-than-expected results from Morgan Stanley (MS 26.80, +1.58), Wells Fargo (WFC 26.06, +0.15), and US Bancorp (USB 23.07, -0.08) ahead of the adoption of new financial regulation into law. Despite the sector’s early strength, it succumbed to broader market pressure and settled with a 1.8% loss. That put it among the worst performing sectors of the session.
The broader market spent the middle of the session chopping along the neutral line, but then made a sharp pullback in response to comments from Fed Chairman Bernanke, who made his semiannual monetary policy report to the Senate Banking Committee this afternoon. Bernanke spoke of continued uncertainty in the economy and made note of the Fed's preparations to take more policy actions as needed. The comments generally reflected the downgraded economic outlook that was communicated in the FOMC Minutes, but the stock market’s negative response seemed to reflect its relatively nervous state, which was further underscored by the drop in the yield of the 10-year Treasury Note below 2.90% to its lowest level since April 2009.
Industrial stocks managed to limit their losses. Specifically, the sector settled just 0.4% into the red. Textron (TXT 19.65, +1.57) and Eaton (ETN 73.14, +4.08) provided support after both companies posted better-than-expected earnings and issued upside guidance. Eaton complemented its report with a dividend increase, while shares of TXT were upgraded.

Read more:

RTTNews : Evening Market Wrap.- Stocks Plunge Following Uncertain Economic Outlook From Bernanke - U.S. Commentary . July 21st., 2010

Evening Market Wrap Wed Jul 21 17:11 2010 


Jul 21, 2010 Stocks Plunge Following Uncertain Economic Outlook From Bernanke - U.S. Commentary Stocks posted sharp losses on Wednesday, with comments regarding the uncertain economic outlook from Federal Reserve Chairman Ben Bernanke generating selling pressure in the afternoon. The major averages ended firmly lower after seeing choppy movement earlier, when traders were mulling over another mixed bag of corporate results. Full Article

Economic News

Jul 21, 2010 MBA: Mortgage Activity Picks Up As Rates Fall Further Overall mortgage activity rose last week in the United States, as extraordinarily low rates drove refinancing applications to their highest level in more than a year. New purchase applications rose for the first time since mid-June. Full Article
Jul 21, 2010 Bernanke: Recovery Process Slower Than Projected Federal Reserve Chairman Ben Bernanke told lawmakers Wednesday that progress in reducing the nation's unemployment rate is expected to be slower than originally projected. Speaking before the Senate Banking Committee, Bernanke also said that near-term inflation now looks to be a little lower given the Fed's weaker economic outlook. Full Article

Earnings News

Jul 21, 2010 United Technologies Profit Up 14% Diversified conglomerate United Technologies Corp. (UTX) posted higher profit for the second quarter, led by an improvement in end market environment as well as cost cutting actions. Given the strong first-half performance and continuing improvement in order rates, the company raised its earnings projection for the full year. Full Article
Jul 21, 2010 Northern Trust Q2 Profit Declines, Yet Tops View - Update Custody bank Northern Trust Corp. (NTRS) on Wednesday reported a 12% decline in profit for the second quarter, reflecting lower servicing fees. The company was compeled to waive some fees on money market mutual funds due to the low interest rate environment. Full Article
Jul 21, 2010 Coca-Cola Q2 Profit Rises Above View On Volume Growth - Update Beverage giant Coca-Cola Co. (KO) on Wednesday reported a 16% increase in profit for the second quarter, as global sales volume rose on the back of aggressive promotion during the World Cup. Adjusted earnings per share grew 15% and topped analysts' consensus estimate, as the quarter also benefited from the relative weakness of the U.S. dollar against other currencies. Full Article

Forex Top Story

Jul 21, 2010 Dollar Gains On Euro As Bernanke Vows Support For Economy The dollar was generally stronger on Wednesday, gaining against the euro and sterling after the nation's top central bank pledged to support the fading economic recovery. Meanwhile, European regulators prepared to announce the results of their stress tests on the region's banks. Full Article

Political News

Jul 21, 2010 Poll Shows Lowest Ever Approval Rating For Obama President Barack Obama's approval rating has dropped to its lowest level ever, according to a Quinnipiac University poll released on Wednesday, with more people saying they would rather vote for an unnamed Republican than Obama in 2012. The poll showed that 44 percent approve of the way Obama is handling his job as President compared to 48 percent that disapprove. The negative approval marks a notable deterioration from the 48 to 43 percent approval for Obama in a May poll and a 57 to 33 percent approval last July. Full Article
Jul 21, 2010 Handel, Deal In Run-Off To Face Barnes In Georgia Gubernatorial Race Former Secretary of State Karen Handel and former Congressman Nathan Deal are headed to a run-off to determine the Republican nominee in Georgia's gubernatorial race, with the winner to face former Governor Roy Barnes, who easily won the Democratic primary. Full Article
Jul 21, 2010 Obama Signs Financial Regulation Reforms Into Law President Barack Obama Wednesday signed into law a sweeping set of reforms to the nation's financial regulatory structure. Obama said that the reforms are a critical step in averting a future financial crisis like the one that recently plunged the nation into recession. Full Article

CNBC : Latest Stories. Qualcomm Profit, Sales Top Forecasts; Shares Move Higher / Video of President Obama Words on Financial Reg Bill Signature


»click here to see the latest top stories from


  • Bernanke's Opening Statement
    Federal Reserve Chairman Ben Bernanke tells Congress the economic outlook remains "unusually uncertain," and the Fed is ready to take new steps to keep the recovery alive if the economy worsens.
    » Watch Video
FinReg to Bring Back Investors?
Discussing whether financial regulation will bring back the individual investors to the markets, with Muriel Siebert, Siebert Financial and Irene Aldridge, Able Alpha Trading.
» Watch Video 

President Signs FinReg
President Obama signs the financial regulation bill.
» Watch Video 


SEC Approves Disclosure Form Changes to Provide Investors Greater Information About Their Investment Advisers FOR IMMEDIATE RELEASE 2010-127. July 21st. 2010

SEC Approves Disclosure Form Changes to Provide Investors Greater Information About Their Investment Advisers


Video: Open Meeting
Play video of SEC Chairman Schapiro discussing Form ADV amendments
Chairman Schapiro discusses Form ADV amendments:
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Text of
Chairman's statement
Washington, D.C., July 21, 2010 — The Securities and Exchange Commission today voted unanimously to adopt changes to the principal disclosure document that SEC-registered investment advisers must provide to their clients and prospective clients.
Form ADV, Part 2 — commonly referred to as the “brochure” — explains to the investor an investment adviser’s qualifications, investment strategies, and business practices.
The brochure in its current format requires advisers to respond to a series of multiple-choice and fill-in-the-blank questions organized in a “check-the-box” format that frequently does not correspond well to an adviser’s business. In some cases, the required disclosure may not describe the adviser’s business or conflicts in a way that is truly accessible to the investor.
“These changes are designed to provide clients with greater information about the individuals who will provide them with investment advice,” said SEC Chairman Mary L. Schapiro. “These amendments will help transform the brochure into a plain English narrative that is well-suited to serve investors’ needs and describes the adviser’s conflicts, compensation, business activities, and disciplinary history.”
The amendments adopted by the SEC will:
  • Improve the format and update the requirements of the brochure.

  • Expand the content to better include details most relevant to the clients of investment advisers.

  • Require brochure “supplements” to be delivered to new and prospective clients to give resume-like information about the individuals at an investment advisory firm who will provide services to the clients.

  • Ensure investors have easy access to the brochures as investment advisers are required to file them electronically for posting on the SEC’s website.
Many state-registered investment advisers also currently file Form ADV with their regulators. The Commission authorized the staff to delay publication of the revised Form ADV, Part 2 for five business days in order to work with the states to accommodate technical, state-specific changes to the items and instructions of the form. This process would enable publication of Form ADV, Part 2 as a uniform SEC-state form.
The amended rules and forms will be effective 60 days after publication in the Federal Register. Most investment advisers will begin distributing and publicly posting new brochures in the first quarter of 2011.
# # #



When individuals consider whether to hire a particular investment adviser, they often have basic questions about the professional who may be advising them. That is why, for 21 years, investment advisers registered with the SEC have been required to provide new and prospective clients with a brochure explaining the adviser’s qualifications, investment strategies, and business practices.
Under existing rules, advisers can satisfy this requirement either by providing clients with the portion of the registration form — known as Part 2 of Form ADV — that contains this information, or by creating a separate document that includes the information required by that form.
Currently, Part 2 requires advisers to respond to a series of multiple-choice and fill-in-the-blank questions organized in a “check-the-box” format. Unfortunately, that format frequently does not correspond well to an adviser’s business. And, in some cases, the required disclosure may not describe the adviser’s business or conflicts in a user-friendly manner.
Today, the Commission is considering adopting amendments to Part 2 of Form ADV and related rules that will substantially improve the quality of the disclosure advisers provide to their clients.
Under the new rules, advisers will have to provide new and prospective clients with narrative brochures that are organized in a consistent, uniform manner and that include plain English disclosures of the adviser’s business practices, fees, conflicts of interest, and disciplinary information. Advisory firms also must provide “brochure supplements” to clients containing information about the employees who will provide the advisory services to that client.

The Amendments

  • Improved Format and Updating Requirements. Advisers are required to prepare a narrative, plain English, brochure, presented in a consistent, uniform manner that will make it easier for clients to compare different advisers’ disclosures. The clear and concise narrative descriptions provided in the brochure will improve the ability of clients and prospective clients to evaluate advisers and to understand conflicts of interest that the firms and their personnel face, the effects of those conflicts on the firms’ services, and the steps the adviser takes to address the conflicts.

    Advisers must deliver the brochure to a client before or at the time the adviser enters into an advisory contract with the client. In addition, advisers must provide each client an annual summary of material changes to the brochure and either deliver a complete updated brochure or offer to provide the client with the updated brochure.
  • Expanded Content. The new brochure addresses those topics the Commission believes are most relevant to clients, including:

    • Advisory business — An investment adviser must describe its advisory business, including the types of advisory services offered, state whether it holds itself out as specializing in a particular type of advisory service, and disclose the amount of client assets that it manages.
    • Fees and compensation — An investment adviser must describe how it is compensated for its advisory services, provide a fee schedule, and disclose whether fees are negotiable. The investment adviser must also describe the types of other fees or expenses, such as brokerage fees, custody fees, and fund expenses that clients may pay in connection with the services provided.
    • Performance-based fees and side-by-side management — An investment adviser that accepts performance-based fees, or that supervises an individual who accepts such fees, is required to disclose this fact. If the investment adviser also manages accounts that are not charged a performance fee, the adviser must explain the conflicts of interest that arise from the simultaneous management of these accounts and must describe how it addresses those conflicts.
    • Methods of analysis, investment strategies, and risk of loss — An investment adviser must describe its methods of analysis and investment strategies and explain that investing in securities involves risk of loss which clients should be prepared to bear. Investment advisers who use a particular method of analysis or strategy or who recommend a particular type of security are required to explain the material risks involved and discuss the risks in detail if those risks are unusual.
    • Disciplinary information — An investment adviser is required to disclose in its brochure material facts about any legal or disciplinary event that is material to a client’s evaluation of the advisory business or to the integrity of its management personnel. An investment adviser must deliver promptly to clients updated information when there is new disclosure of a disciplinary event or a material change to an existing disciplinary event.
    • Code of ethics, participation or interest in client transactions, and personal trading — An investment adviser is required to describe briefly its code of ethics and state that a copy is available upon request. The adviser must also disclose whether it or an affiliate recommends to clients, or buys or sells for client accounts, securities in which the adviser or an affiliate has a material financial interest and, if so, the conflicts of interest associated with that practice. The adviser also must disclose whether it or an affiliate invests (or is allowed to invest) in the same securities that it recommends to clients or in related securities, such as options or other derivatives, and must explain the conflicts involved and how it addresses those conflicts. In addition, an investment adviser that trades in the recommended securities at or around the same time as the client has to explain the specific conflicts inherent in that practice and how it addresses them.
    • Brokerage practices — An investment adviser is required to describe the factors considered in selecting or recommending broker-dealers for client transactions and determining the reasonableness of brokers’ compensation. Investment advisers also must disclose soft dollar practices (research or other products or services, other than execution, provided by brokers or a third party to the investment adviser in connection with client transactions); client referrals (using client brokerage to compensate brokers for client referrals); directed brokerage (asking or permitting clients to send trades to a specific broker for execution); and trade aggregation (bundling trades to obtain volume discounts on execution costs). Investment advisers must explain how they address the various conflicts of interest associated with these practices.
  • Supplements. An adviser is required to deliver “brochure supplements” to new and prospective clients providing them with information about the specific individuals who will provide services to the clients. The supplement will contain brief résumé-like disclosure about the educational background, business experience, other business activities, and disciplinary history of the individual, so that the client can assess the person’s background and qualifications. It will also include contact information for the person’s supervisor in case the client has a concern about the person.
  • Internet Availability. Advisers are required to electronically file brochures, which will be publicly available on the SEC’s website.
* * *


The amended rules and forms will be effective 60 days after publication in the Federal Register.
Most investment advisers will begin distributing and publicly posting new brochures in the first quarter of 2011.

USA TODAY : Remarks of President Obama 21st Century Financial Regulatory Reform. July 21st. 2010

Remarks of President Obama: 21st Century Financial Regulatory Reform
As Prepared for Delivery
Since taking office, my administration has mounted an extraordinary response to an historic economic crisis. But even as we take decisive action to repair the damage to our economy, we are working hard to build a new foundation for sustained and lasting growth. This will not be easy. We know that this recession is not the result of one failure, but many. And many of the toughest challenges we face are the product of a cascade of mistakes and missed opportunities which took place over the course of decades.
That is why, as part of this new foundation, we are seeking to build an energy economy that creates new jobs and new businesses to free us from our dependence on foreign oil; to foster an education system that instills in each generation the capacity to turn ideas into innovations, and innovations into industries; and, as I discussed on Monday at the American Medical Association, to reform our health care system so that we can remain healthy and competitive.
This new foundation also requires strong, vibrant financial markets, operating under transparent, fairly-administered rules of the road that protect America's consumers and our economy from the devastating breakdown we've witnessed in recent years.
It is an indisputable fact that one of the most significant contributors to our economic downturn was an unraveling of major financial institutions and the lack of adequate regulatory structures to prevent abuse and excess. A culture of irresponsibility took root from Wall Street to Washington to Main Street. And a regulatory regime basically crafted in the wake of a 20th century economic crisis – the Great Depression – was overwhelmed by the speed, scope, and sophistication of a 21st century global economy.
In recent years, financial innovators, seeking an edge in the marketplace, produced a variety of new and complex financial instruments. These products, such as asset backed securities, were designed to spread risk but ended up concentrating it. Loans were sold to banks, banks packaged these loans into securities, and investors bought these securities often with little insight into the risks to which they were exposed. It was easy money. But these schemes were built on a pile of sand. And as the appetite for these products grew, lenders lowered standards to attract new borrowers. Many Americans bought homes and borrowed money without being adequately informed of the terms, and often without accepting their responsibilities.
Meanwhile, excessive executive compensation – unmoored from long-term performance or even reality – rewarded recklessness rather than responsibility. This wasn't just a failure of individuals. This was a failure of the entire system. The actions of many firms escaped scrutiny. In some cases, the dealings of these institutions were so complex and opaque that few inside or outside these companies understood what was happening. Where there were gaps in the rules, regulators lacked the authority to take action. Where there were overlaps, regulators lacked accountability for inaction.
An absence of oversight engendered systematic, and systemic, abuse. Instead of reducing risk, the markets actually magnified risks being taken by ordinary families and large firms alike. There was far too much debt and not nearly enough capital in the system. And a growing economy bred complacency.
We all know the result: the bursting of a debt-based bubble; the failure of several of the world's largest financial institutions; the sudden decline in available credit; the deterioration of the economy; the unprecedented intervention of the federal government to stabilize the financial markets and prevent a wider collapse; and most importantly, the terrible pain in the lives of ordinary Americans. There are retirees who have lost much of their life savings, families devastated by job losses, small businesses forced to shut their doors.
Millions of Americans who have worked hard and behaved responsibly have seen their life dreams eroded by the irresponsibility of others and the failure of their government to provide adequate oversight. Our entire economy has been undermined by that failure.
The question is, what do we do now? We did not choose how this crisis began. But we do have a choice in the legacy this crisis leaves behind. So today, my administration is proposing a sweeping overhaul of the financial regulatory system, a transformation on a scale not seen since the reforms that followed the Great Depression.
These proposals reflect intensive consultation with leaders in Congress, including those here today: leaders like Chairmen Dodd and Frank, who along with Senator Shelby and Representative Bachus met with me earlier this year to jumpstart the discussion of reform. They also draw on conversations with regulators, including those I met with this morning; consumer advocates; business leaders; academic experts; and the broader public.
In these efforts, we seek a careful balance. I have always been a strong believer in the power of the free market. It has been and will remain the engine of America's progress – the source of prosperity unrivaled in history. I believe that jobs are best created not by government, but by businesses and entrepreneurs who are willing to take a risk on a good idea. I believe that our role is not to disparage wealth, but to expand its reach; not to stifle the market, but to strengthen its ability to unleash the creativity and innovation that still make this nation the envy of the world.
That's our goal. To restore markets in which we reward hard work and responsibility, not recklessness and greed – in which honest, vigorous competition in the system is prized, and those who game the system are thwarted.
With the reforms we are proposing today, we seek to put in place rules that will allow our markets to promote innovation while discouraging abuse. We seek to create a framework in which markets can function freely and fairly, without the fragility in which normal business cycles bring the risk of financial collapse; a system that works for businesses and consumers.
There are those who will say we do not go far enough, that we should have scrapped the system altogether and started again. I think that would be a mistake. Instead, we have crafted reforms to pinpoint the structural weaknesses that allowed for this crisis and to make sure that these problems are dealt with so as to prevent crises in the future.
There are also those who will say we are going too far. But the events of the past few years offer ample testimony for the need to make significant changes. The absence of a working regulatory regime over many parts of the financial system – and over the system as a whole – led us to near catastrophe. We do not want to stifle innovation. But I'm convinced that by setting out clear rules of the road and ensuring transparency and fair dealings, we will actually promote a more vibrant market. This principle is at the heart of the changes we are proposing.
First, we are proposing a set of reforms to require regulators to look not only at the safety and soundness of individual institutions, but also – for the first time – at the stability of the system as a whole.
One of the reasons this crisis could take place is that while many agencies and regulators were responsible for overseeing individual financial firms and their subsidiaries, no one was responsible for protecting the whole system from the kinds of risks that tied these firms to one another. Regulators were charged with seeing the trees, not the forest. Even then, some firms that posed a so-called "systemic risk" were not regulated as strongly as others; they behaved like banks but chose to be regulated as insurance companies, or investment firms, or other entities under less scrutiny.
As a result, the failure of one large firm threatened the viability of many others. The effect multiplied. There was no system in place that was prepared for this kind of outcome. And more importantly, no one has been charged with preventing it. We were facing one of the largest financial crises in history – and those responsible for oversight were mostly caught off-guard and without the authority needed to address the problem.
It's time for that to change. I am proposing that the Federal Reserve be granted new authority – and accountability – for regulating bank holding companies and other large firms that pose a risk to the entire economy in the event of failure. We will also raise the standards to which these kinds of firms are held. If you can pose a great risk, that means you have a great responsibility. We will require these firms to meet stronger capital and liquidity requirements so that they are more resilient and less likely to fail.
And even as we place the authority to regulate these large firms in the hands of the Federal Reserve – so that lines of responsibility and accountability are clear – we will also create an oversight council to bring together regulators from across markets to coordinate and share information; to identify gaps in regulation; and to tackle issues that don't fit neatly in an organizational chart. We're going to bring everyone together to take a broader view – and a longer view – to solve problems in oversight before they can become crises.
As part of this effort, we are proposing the creation of what is called "resolution authority" for large and interconnected financial firms so that we are not only putting in place safeguards to prevent the failure of these firms, but also a set of orderly procedures that will allow us to protect the economy if such a firm does in fact go under.
Think about this: if a bank fails, we have a process through the FDIC that protects depositors and maintains confidence in the banking system. This process was created during Great Depression when the failure of one bank led to runs on other banks, which in turn threatened wider turmoil. And it works. Yet we do not have any effective system in place to contain the failure of an AIG and the largest and most interconnected financial firms in our country.
That is why, when this crisis began, crucial decisions about what would happen to some of the world's biggest companies – companies employing tens of thousands of people and holding trillions of dollars in assets – took place in emergency meetings in the middle of the night. And that is why we've had to rely on taxpayer dollars. We should not be forced to choose between allowing a company to fall into a rapid and chaotic dissolution or to support the company with taxpayer money. That is unacceptable. There is too much at stake.
Second, we are proposing a new and powerful agency charged with just one job: looking out for ordinary consumers. This is essential, for this crisis was not just the result of decisions made by the mightiest of financial firms; it was also the result of decisions made by ordinary Americans to open credit cards, take out home loans, and take on other financial obligations. We know that there were many who took out loans they knew they could not afford, but there are also millions of Americans who signed contracts they did not always understand offered by lenders who did not always tell the truth. Even today, folks signing up for a mortgage, student loan, or credit card face a bewildering array of incomprehensible options. Companies compete not by offering better products, but more complicated ones, with more fine print and hidden terms.
This new agency will change that, building on credit card reforms I signed into law a few weeks ago. This agency will have the power to set standards so that companies compete by offering innovative products that consumers actually want – and actually understand. Consumers will be provided information that is simple, transparent, and accurate. You'll be able to compare products and see what is best for you. The most unfair practices will be banned. Those ridiculous contracts – pages of fine print that no one can figure out – will be a thing of the past. And enforcement will be the rule, not the exception.
For example, this agency will be empowered to set new rules for home mortgage lending, so that the bad practices that led to the home mortgage crisis will be stamped out. Mortgage brokers will be held to higher standards; exotic mortgages that hide exploding costs will no longer be the norm; home mortgage disclosures will be reasonable, clearly written, and concise. And we're going to level the playing field so that non-banks that offer home loans are held to the same standards as banks that offer similar services, so that lenders aren't competing to lower standards – but to meet a higher bar on behalf of consumers.
The mission of this new agency must also be reflected in the work we do throughout the government. There are other agencies, like the Federal Trade Commission, charged with protecting consumers, and we must ensure that those agencies have the resources, and the state-of-the-art tools, to stop unfair and deceptive practices as well.
Third, we are proposing a series of changes designed to promote free and fair markets by closing gaps and overlaps in our regulatory system – including gaps that exist not just within but between nations.
We've seen that structural deficiencies allow some companies to shop for the regulator of their choice – and others, like hedge funds, to operate outside the regulatory system altogether. We've seen the development of financial instruments, like many derivatives, so complex as to defy efforts to assess their actual value. And we've seen a system that allowed lenders to profit by providing loans to borrowers who would never repay – because the lender offloaded the loan, and the consequences, to someone else.
That is why, as part of these reforms, we will dismantle the Office of Thrift Supervision and close loopholes that have allowed important institutions to cherry-pick among banking rules. We will offer only one federal banking charter, regulated by a strengthened federal supervisor. We'll raise capital requirements for all depository institutions. And hedge fund advisers will be required to register with the SEC.
We are also proposing comprehensive regulation of credit default swaps and other derivatives that have threatened the entire financial system. And we will require the originator of a loan to retain an economic interest in that loan, so that the lender – and not just the holder of a security, for example – has an interest in ensuring that a loan is paid back. By setting common-sense rules, these kinds of financial instruments can play a constructive – not destructive – role.
Over the past two decades, we have seen – time and again – cycles of precipitous booms and busts. In each case, millions of people have had their lives profoundly disrupted by developments in the financial system, most severely in our recent crisis. These aren't just numbers on a ledger. This is a child's chance to get an education. This is a family's ability to pay their bills or stay in their home. This is the right of our seniors to retire with dignity and security. These are American dreams, and we should not accept a system that consistently puts them in danger. Financial institutions have an obligation to themselves and to the public to manage risks carefully. And as President, I have a responsibility to ensure that our financial system works for the economy as a whole.
There has always been a tension between those who place their faith in the invisible hand of the marketplace – and those who place more trust in the guiding hand of the government. That tension isn't a bad thing. It gives rise to the debates and dynamism that make it possible for us to adapt and grow. For we know that markets are not an unalloyed force for good or for ill. In many ways, our financial system reflects us. In the aggregate of countless independent decisions, we see the potential for creativity – and the potential for abuse. We see the capacity for innovations that make our economy stronger – and for innovations that exploit our economy's weaknesses.
We are called upon to put in place those reforms that allow our best qualities to flourish – while keeping those worst traits in check. We are called upon to recognize that the free market is the most powerful generative force for our prosperity – but it is not a free license to ignore the consequences of our actions.
This is a difficult time for our nation. But from this period of challenge, we can once again tap those values and ideals that have allowed us to lead the global economy, and will allow us to lead once again. That is how we will help more Americans live their own dreams. That is why these reforms are so important. And I look to working with leaders in Congress and all of you to see these proposals put to work so that we can overcome this crisis and build a foundation for lasting prosperity.
Thank you.

FDIC and Financial Regulatory Reform. Statement by Chairmain Sheila C Bair. July 21st., 2010

FDIC and Financial Regulatory Reform
"Today represents a significant milestone in the history of financial regulation in the United States. With the Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law, a meaningful framework is now in place that addresses many of the weaknesses in our financial system that led to the financial crisis.” 
FDIC Chairman Sheila C. Bair, July 21, 2010

MarketWatch: Industry Financial Services: New Bank Regulations may end era of free checking. July 21st., 2010


New bank regulations may end era of free checking  
By Alistair Barr MarketWatch
7/21/2010 1:23:00 PM

The sweeping financial regulation signed into law Wednesday by President Barack Obama may have a direct and visible effect on millions of bank account holders in the U.S. 

Canadian Markets: Canadian stocks move lower, weighed by crude

By Catherine Carlock MarketWatch
7/21/2010 12:33:00 PM

Mining and minerals stocks buck the downward trend