Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

What a Few Thousand Dollars Will Buy You in D.C.

Politics / US Politics Jun 02, 2012 - 06:14 PM GMT

By: Money_Morning

Politics

Best Financial Markets Analysis ArticleShah Gilani writes: Let's talk today about the cheap cost of buying favorable legislation in the House, and about how bills are titled to deceive us, even when there's no good reason to lie to our faces.

But first, I have to give a giant shout-out to Kevin Wack, the Capitol Hill reporter for the American Banker, which I read every day, and you should, too.


Kevin just made front and center something that I hadn't seen nor heard about and can't find anywhere else in print.

But, it's right up our alley here. So, give Kevin all the credit for this little tale.

Here we go...

Once upon a time, in a Congress full of proud and proper, true, honest, and transparent representatives of the American people, something resembling gangrene found its way into the illustrious body and backbone of some (probably all) of that elite club's members.

The infection, green like the color of money, was most recently seen oozing out of a few House members' back pockets.

Thankfully, the amount of green was small enough such that the civic-minded donor of the little largess wasn't set back much for his patriotism.

Kevin, acting like the brilliant pathologist that he sometimes plays, informs us that the donor was Howard Milstein (along with his wife and some family members), the CEO of Emigrant Bank in New York. And the "largessees" were Republican Rep. Michael Grimm of Staten Island ($2,500), Democratic Rep. Carolyn McCarthy of Long Island ($4,000), Dem. Rep. Gregory Meeks of Queens ($3,000), and Dem. Rep. Carolyn Maloney of Manhattan ($2,000).

What's newsworthy here is not that the gangrene caused the introduction of a bill titled, "A bill to amend the Dodd-Frank Wall Street Reform and Consumer Protection Act to adjust the date on which consolidated assets are determined for purposes of exempting certain instruments of smaller institutions from capital deductions."

It's that today it costs so little to get your own legislation written in Congress.

A few thousand bucks.

The Price of Honor
As an aside, I think that's a harbinger of how bad things really are in the economy. What we would expect to have been an inflationary spiral appears to be suffering from some terribly deflationary effects... How else would the price of honor have come down to such piddling amounts?

Anyway, Kevin's beef is that the bill should more honestly have been titled, "A bill to prevent Emigrant Bank from losing $300 million in Tier 1 capital."

There's nothing really wrong with the bill. Essentially, the Collins Amendment within Dodd-Frank says that as of December 31, 2009, any bank with more than $15 billion in assets can't count trust-preferred securities (don't ask, they're a type of capital) as part of their Tier 1 capital.

Emigrant Bank had more than $15 billion back then, because it prudently borrowed $2.3 billion from the New York Federal Home Loan Bank to shore up itself in the face of the financial crisis. After the crisis passed for Emigrant, it paid the money back. Today its assets are about $10.5 billion.

The bill was written to change the effective date of the Collins Amendment from December 31, 2009, to March 31, 2010 - after Emigrant paid back its loan and had less than $15 billion in assets.

It doesn't really matter to me that, out of 7,307 banks, only Emigrant is benefited by the "Emigrant bill" and gets to count its trust preferred as Tier 1 capital. They shouldn't be punished for being safety conscious when they had to be.

What's problematic is that the bill was paid for, given a less-than-transparent title (really, Kevin's right, why not call it for it really was?), and that its sponsors tried to push it through without any hearing or committee vote.

I'll leave you to ponder what all this means.

For my part, I'm thankful to Kevin, and to Barney Frank, who forced the bill to face the true light of day and didn't allow it to be rammed through under the radar of the press.

Thank God for a few good men still left to muckrake and call the infected animals out into the street to be identified as what they are... the living dead.

Or as they are less affectionately known, (some, okay, probably most, dare I say all?) Members of Congress.

Source :http://moneymorning.com/2012/06/02/what-a-few-thousand-dollars-will-buy-you-in-d-c/

Money Morning/The Money Map Report

©2011 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in