To Pay New York Pension Fund, Cities Borrow From It First

How can you borrow from Peter to pay Paul? Ask NYC officials. They are probably getting their advice from Wall Street who actually control the money. Queenbee.

ALBANY — When New York State officials agreed to allow local governments to use an unusual borrowing plan to put off a portion of their pension obligations, fiscal watchdogs scoffed at the arrangement, calling it irresponsible and unwise.

And now, their fears are being realized: cities throughout the state, wealthy towns such as Southampton and East Hampton, counties like Nassau and Suffolk, and other public employers like the Westchester Medical Center and the New York Public Library are all managing their rising pension bills by borrowing from the very same $140 billion pension fund to which they owe money.

Across New York, state and local governments are borrowing $750 million this year to finance their contributions to the state pension system, and are likely to borrow at least $1 billion more over the next year. The number of municipalities and public institutions using this new borrowing mechanism to pay off their annual pension bills has tripled in a year.

The eagerness to borrow demonstrates that many major municipalities are struggling to meet their pension obligations, which have risen partly because of generous retirement packages for public employees, and partly because turbulence in the stock market has slowed the pension fund’s growth.

The state’s borrowing plan allows public employers to reduce their pension contributions in the short term in exchange for higher payments over the long term. Public pension funds around the country assume a certain rate of return every year and, despite the market gains over the last few years, are still straining to make up for steep investment losses incurred in the 2008 financial crisis, requiring governments to contribute more to keep pension systems afloat.

Supporters argue that the borrowing plan makes it possible for governments in New York to “smooth” their annual pension contributions to get through this prolonged period of market volatility.

http://www.nytimes.com/2012/02/28/nyregion/to-pay-new-york-pension-fund-cities-borrow-from-it-first.html?_r=1&ref=todayspaper

Goldman Traders Lost Money on 17 Days in Q4

Goldman Sachs Group Inc. (GS), the Wall Street bank that generated 60 percent of its 2011 revenue from trading, recorded losses from that business on 17 days in the fourth quarter, down from 21 days in the prior quarter.

The firm’s traders lost more than $100 million on two of those days, according to the New York-based company’s annual filing with the Securities and Exchange Commission. They produced more than $100 million on nine out of 63 total days in the quarter that ended Dec. 31, the filing showed.

Goldman Sachs, the fifth-biggest U.S. bank by assets, had trading losses on 54 days during 2011, the highest full-year total since 2008 and more than double last year’s number. Trading revenue fell 21 percent in 2011, contributing to a 47 percent drop in net earnings from a year earlier.

Morgan Stanley, the sixth-biggest U.S. bank by assets, said this week that its traders lost money on 22 days during the quarter and on 64 days in all of 2011.

Goldman Sachs’s traders lost money on 21 days during the third quarter, 15 days in the second quarter and one day in the first quarter, according to company reports. Goldman Sachs recorded zero trading losses in the first quarter of 2010, the only perfect quarter in the firm’s history.

http://www.bloomberg.com/news/2012-02-28/goldman-s-traders-lost-money-on-17-days-in-fourth-quarter-down-from-21.html

China May Double Rare Earth Exports as Demand Rises on Price

China, the biggest supplier of rare earths, may almost double exports this year and meet quotas set by the government as lower prices stimulate demand.

Chinese exports were 49 percent of the government-alloted quota in the first 11 months of last year because the slowing global economy sapped demand, the Ministry of Commerce said in a Dec. 27statement. Overseas sales quotas may be virtually unchanged this year at 31,130 metric tons, based on Bloomberg calculations.

“Export quotas may be met this year as overseas demand recovers,” Wang Caifeng, a former official overseeing the rare- earth industry with the Ministry of Industry and Information Technology, said in an interview in Beijing. “High prices last year had deterred purchases and led to inventories’ depletion. Smuggling also hampered exports through illegal channels.”

Rare-earths prices have tumbled since the third quarter as consumers, including makers of electric cars and wind turbines, reduced use. The average price of lanthanum oxide, a rare earth used in rechargeable batteries and refining catalysts, was 129,167 yuan ($20,500) a ton in the fourth quarter, 15 percent less than in the third quarter, according to data from Shanghai Steelhome Information.

Rare-Earth Shares Fall

Molycorp Inc. (MCP), the owner of the largest rare-earth deposit outside of China, fell 3.1 percent to close at $25.99 in New York. Lynas Corp., developer of the world’s largest rare-earths refinery, fell 4.7 percent to A$1.23 in Sydney.

China produces at least 90 percent of the world’s rare earths, used in Boeing Co. (BA)helicopter blades and Toyota Motor Corp. (7203) hybrid cars. The nation has curbed output and exports of rare earths since 2009, when quotas were set at 50,145 tons, to conserve mining resources and protect the environment.

Cutting exports boosted prices and sparked concern among overseas users about access to supplies. China halted some mines last year to curb overcapacity, cut illegal mining and improve environmental standards.

The Chinese government allocated 10,546 tons of first-round export quotas to nine companies, including China Minmetals Corp. and Sinosteel Corp (SINOSZ)., that met the government’s environmental protection standards, the ministry said.

Export Licenses

http://www.bloomberg.com/news/2012-02-26/china-may-double-rare-earth-exports-as-overseas-demand-rebounds-on-price.html

S&P Declares Greece in Default

By STEPHEN L. BERNARD And KATY BURNE

Greece became the first euro-zone member officially to be rated in default, 13 years after the single European currency was adopted to strengthen the European Union.

Standard & Poor's cut Greece's long-term credit rating to selective default from double-C. The move was expected, as S&P said this month that it would consider Greece in default if it added "collective-action" clauses to its sovereign debt, effectively forcing all bondholders to accept a bond-swap offering. Greece's Parliament approved that measure last week.

A panel will decide whether S&P's move triggers credit-default-swap payouts. Above, demonstrators in front of the Greek Parliament last week.

Moody's Investors Service and Fitch Ratings also are likely to place Greece in default. The ratings companies deem an issuer in default any time it fails to pay back creditors in full and on time.

The bigger question remains whether the action triggers payments on credit-default-swap contracts, a form of insurance against a bond default or restructuring.

The net payments that would change hands between buyers and sellers of credit-default swaps on Greece wouldn't total more than an estimated $3.2 billion, according to the Depository Trust & Clearing Corp.

A committee convened by the organization that oversees those contracts, the International Swaps and Derivatives Association, has been asked by an unidentified entity to decide whether Greece's restructuring should trigger the payouts.

Greece hasn't failed to make any interest payments to bondholders, and the official restructuring of the country's debt isn't complete.

The committee is being asked to consider whether Greek legislation to retrofit its debt with collective-action clauses, potentially forcing losses on private investors, should trigger credit-default-swap payouts because the decision won't include the European Central Bank and the new Greek bonds it received in an exchange, protecting the ECB from losses.
http://online.wsj.com/article/SB10001424052970203833004577249831718108646.html

Majority of respondents to Sun Life poll expect to work beyond age 66

TORONTO - As Canadians live longer and face tougher financial choices in their golden years, fewer than a third of respondents in a recent survey said they plan to be fully retired by 66.

Sun Life Financial's (TSX:SLF) annual Unretirement Index poll, released early Wednesday, found that only about three in 10 Canadians surveyed said they plan full retirement at that age.

And the average expected age of retirement now hovers at 68 — up from 66 just last year.

"That's a fairly short space of time for an attitude change of that degree," said Kevin Dougherty, president of Sun Life Financial Canada.

The poll results from Canada's third-biggest insurance company reflect what other public opinion surveys have shown for a while — that the concept of Freedom 55 is a thing of the past.

"These results are not surprising given the current economic volatility, increasing consumer debt loads, rising health-care costs, longer life expectancy and lack of planning. We're also finding that some Canadians believe they'll have to work longer to be able to pay for basic living expenses," Dougherty said.

Around the world, a retirement crisis looms as debt-strapped countries scale back benefits, raise the retirement age or make other moves to deal with rising obligations and weak economies.

In Canada, the federal government wants to scale back the long-term costs of Canada's Old Age Security program, and has met harsh criticism from critics and the opposition over suggestions Ottawa may raise the OAS retirement age to save money.

On Tuesday, Human Resources Minister Diane Finley told a Canadian Club meeting in Toronto that younger Canadians would face higher taxes, fewer social programs or larger deficits unless major reforms are started right now.

Meanwhile, a recent report to the Ontario government recommended cuts to pensions for teachers, nurses and other public sector workers because they are unaffordable in a slowing provincial economy.

The retirement issue is coming to the fore as the workforce ages and baby boomers are set to retire in the coming years, leaving fewer employees to pay into benefit plans and more drawing from them.

Nearly half of respondents to the Sun Life survey said they are worried about having debt in retirement. More than twice as many respondents, 44 per cent, said that paying down debt was the number one priority, compared to 20 per cent who said they prioritized retirement.

Some recent indications have suggested more people are carrying debt into their retirement years, a worrying trend that is forcing some to keep working.

"They're really thinking of shifting gears, staying in the workforce a little longer, avoid drawing down on the retirement savings for a few extra years or getting themselves a little more ready by paying down debt they thought they'd have paid off by this point in time," Dougherty said.

Canadians are also living longer — with average life expectancy now at 85, according to Statistics Canada. Retirees will need to factor that into savings plans.

"It used to be the worry was 'What if I die?' And today it's 'What if I live, what if I live a really long time?'" Dougherty said.

Research from Statistics Canada released in the fall found that a 50-year-old worker in 2008 could expect to stay in the labour force another 16 years — 3.5 years longer than would have been the case in the mid-1990s.

In the Sun Life poll, about 61 per cent of those who said they expect to work past the traditional retirement age of 65 said they would do so because they have to, while 39 per cent said it's because they want to.

About 48 per cent said they plan to work part-time or freelance while they ease into retirement.

http://www.canadianbusiness.com/article/72124--majority-of-respondents-to-sun-life-poll-expect-to-work-beyond-age-66

Wake me up when it over

Greece will it default or not? If it does what will the default look like? This is going to be a very short post as I have lost interest. This is like the boy who called wolf. Honestly I hope some really rich people and really big banks go down as a result. I would be happy to knock over the first domino. That would make a great video on Utube of a world map starting in Greece and dominoes set up to criss cross the world. I always loved watching huge domino demonstrations. Have a happy Sunday, do something really nice for yourself and don't feel guilty for your self indulgence. You deserve it.

Shilling: Why Renters Rule U.S. Housing Market (Part 3)

Think of all the recent federal programs to keep people who can’t afford them in their four- bedroom houses.

There are the Home Affordable Modification Program, the Home Affordable Refinancing Program and the Emergency Homeowners’ Loan Program. In addition, there are Hope Now, Hope for Homeowners, the Hardest Hit Funds and, most recently, the proposal to expand HARP to distressed mortgages not covered by Fannie Mae and Freddie Mac.

-- Hopeless HAMP: The administration initially said this program would relieve 3 million to 4 million distressed homeowners, but it’s been a miserable failure. That was to be expected because loose-lending practices put many people in houses so unaffordable that, short of canceling their monthly mortgage payments completely, no modification would return them to financial health. About the only thing HAMP has done is delay foreclosures while lenders, under federal government edict, attempt to modify home loans to reduce total monthly payments on mortgage, credit-card and other debt to 31 percent of income.

Through December 2011, 1.8 million HAMP trial modifications had been initiated, but the monthly pace of new modifications continues to drop. Only 43 percent of the HAMP trials -- 762,839 -- made it to permanent status. Nevertheless, the administration still has hope for the program and has extended it through December 2012.

-- HARP and EHLP: HARP was initiated in June 2009 by the White House to aid 4 million to 5 million homeowners by allowing those with mortgages guaranteed by Fannie Mae and Freddie Mac (NMCMFUS) -- which back almost half the $10.4 trillion of outstanding home loans and 87 percent of recent originations -- to refinance their loans even if they exceed the property’s value by 25 percent. Yet only 894,000 mortgages were subsequently refinanced. And even though Fannie and Freddie (FRE) guarantee about 5 million underwater mortgages, just 70,000 of those refinancings were loans that significantly exceeded the value of the home. Undaunted, the administration liberalized HARP in November and extended it from through 2013.

EHLP was set up by the 2010 Dodd-Frank financial reform law to help 30,000 homeowners by providing zero-interest loans of as much as $50,000, which could be forgiven after five years if borrowers stayed current on their mortgage payments. Despite the attractiveness of this offer, of the 100,000 troubled homeowners who applied for EHLP by the Sept. 30, 2011 deadline, only 10,000 to 15,000 are expected to qualify, meaning the program will dispense $330 million to $500 million of the $1 billion it was allocated.

Most recently, the Federal Housing Finance Agency extended HARP to the one-third of all mortgages not covered by Fannie and Freddie and that are instead owned by banks or grouped in mortgage-backed securities sold to investors. The new loans, refinanced at lower interest rates, would be guaranteed by the Federal Housing Administration.

The administration says the program could benefit 3.5 million homeowners in addition to the 11 million who could be helped by programs for borrowers with loans backed by Fannie Mae and Freddie Mac. But as with those efforts, this measure transfers money from mortgage holders to homeowners. The new program will cost $5 billion to $10 billion, which the administration wants to pay for by taxing large banks. Because this would require congressional approval, Republican opposition makes enactment highly unlikely.

-- Try, Try Again: And don’t forget the tax credit for new homeowners that was in effect from 2009 to April 2010, and resulted in a temporary increase in house prices. Many speculators were encouraged to conclude that the price collapse was over and bought foreclosed houses for a quick flip and lots of profit. But as prices fell again and turned expected gains into losses, those investors became landlords and rented their properties hoping that rents and appreciation would bail them out at some point.

http://www.bloomberg.com/news/2012-02-24/why-renters-rule-housing-market-part-3-commentary-by-a-gary-shilling.html

35,000 Postal Service jobs on the chopping block

I think this is the beginning of the end. QB

Postmaster General Patrick Donahoe said the closing of 223 plants nationwide will impact 35,000 jobs.

WASHINGTON (CNNMoney) -- The U.S. Postal Service announced on Thursday new plans to consolidate or close 223 mail processing plants, putting 35,000 jobs at stake starting in late May or June.

The processing plant consolidations would save $2.1 billion and are a part of the agency's broader effort to save $20 billion in the next three years. The Postal Service is in debt due to declining first-class mail volumesand a congressional mandate to prefund retirement health care benefits.

The agency was reaching out to impacted employees on Wednesday, officials said. Not all impacted workers will lose their jobs. Many will be offered jobs at other processing plants miles away or even in other states. Some will be urged to retire.

"This is an important part of the network consolidation," Postmaster General Patrick Donahoe said in an interview with CNNMoney. "Some employees will retire. A mail clerk may want to become a letter carrier. . .We know how to move people and find landing spots."

The plant consolidations are the latest in an array of controversial cost-cutting measures under consideration at the Postal Service including: Slashing Saturday service,delaying delivery of some first-class mail, closing post offices and hiking the price of a first-class stamp by a nickel to 50 cents.

The Postal Service says that, if nothing is done, it faces $18 billion in losses by 2015.

The Postal Service can't close anything until May 15, after the moratorium on closures ends. The agency originally agreed to the moratorium to give lawmakers time to pass legislation to save the agency. But so far, those efforts have been slow going.

Donahoe said he would like to complete most of the consolidations, including job cuts and changes to 30,000 full-time positions and 5,000 non-career employees, by Oct. 1.

Nearly every state is impacted and would lose a mail processing plant, according to the Postal Service list, which includes 14 in California, 12 in New York and 9 in Illinois.

Mail processing plants closures can yield a particularly devastating toll on communities. A plant in Tulsa, Okla., slated to be consolidated, employs nearly 600 employees.

http://money.cnn.com/2012/02/23/news/economy/postal_service__plant_closings/?source=cnn_bin

Just thought I would toss this in as the competition is heating up. QB

Mossberg: Dell's XPS 13 Is a Well-Built Ultrabook 2/22/2012 9:00:00 PM

Many PC makers have come out with ultra-light laptops, like Apple's Macbook Air and others. Now Dell is joining the field with its first ultrabook, the XPS 13, which starts at $999. Personal Technology columnist Walt Mossberg finds there's a lot to like, but poor battery life may be a deal-breaker for some.

How Small Businesses Are Coping With Health Insurance

Occasionally in the coming weeks and months, The Agenda will introduce you to small-business owners who are wrestling with how to provide health insurance to their employees. Over time, we hope to delve into all aspects of a crucial decision — not just managing the costs but sorting out benefit packages, weighing alternatives, and dealing with insurers and brokers. Along the way, we hope to get a better understanding of how the 2010 health-care legislation will, or won’t, affect small businesses.

Today we meet Ann Gish, who designs high-end bed linens from offices in Manhattan. As we proceed with this series, we’d like to hear from you. What questions would you like us to ask of the business owners we profile? Do you have an interesting health insurance story to tell? Please drop us a line.

THE OWNER Ann Gish, 63.

THE COMPANY Ann Gish Inc. designs and distributes luxury bed and table linens and pillows, which are sold at Bergdorf Goodman, NeimanMarcus.com and boutiques nationwide. In 2011, the company opened its own store in Manhattan. Excluding Ms. Gish and her husband, Ann Gish Inc. employs 10 people in the United States.

WHAT THE COMPANY PAYS The company bears the entire premium cost for its workforce, $472 a month per employee. It provides individual coverage only, but Ms. Gish said that most of her employees are either unmarried or have spouses who get insurance through their jobs. One sales manager, however, has a self-employed husband with a pre-existing condition and a child. Ms. Gish pays the employee’s premiums, and the employee pays the insurance for the rest of her family — an additional $1,300 a month. “She used her agent, we used our agent, and this was the best we could do,” Ms. Gish said. “If she could find a better deal, we’d give her the $500.” Ms. Gish said she is giving serious thought to reducing the share of employee premiums that her company pays: “I want to see what happens business-wise over the next year, and I want to see what happens when the health care reform kicks in.”

THE PLAN Ann Gish offers preferred provider organization coverage, a form of managed care that favors doctors and hospitals that are in-network. One aspect of the plan that galls Ms. Gish is that doctors must seek permission from the insurer before prescribing some treatments. However, Ms. Gish said, the plan is “non-gated,” meaning that employees don’t need permission from their primary doctor to see a specialist.

THE INSURER Currently, it’s Aetna; before that, it was Oxford. “We’ve changed either every year or every two years,” Ms. Gish said, “because they take away the policy that you have, and they give you a new one that’s more money and generally fewer benefits.” In recent years, premiums have bounced around, Ms. Gish said: $422 in 2009, $479 in 2010, back down to $443 last year, and now back up again. Meanwhile, she said, this year employees face slightly higher co-payments and much steeper deductibles.

http://boss.blogs.nytimes.com/2012/02/22/how-small-businesses-are-coping-with-health-insurance/?ref=business

Making the Volcker Rule Better for Markets and the Economy: View

The Volcker rule, a central element of the U.S. financial reform effort, is facing heavy criticism as regulators prepare a final version. We encourage them to stick as close as possible to the rule’s original intent: severing the links between high-stakes securities trading and the banking services crucial to the broader economy.

Inspired by former Federal Reserve Chairman Paul Volcker, the rule forbids proprietary trading, or the use of a bank’s own funds to make speculative bets. This has two main aims: prevent losses on such trades from reducing banks’ ability to lend, and cut traders off from the taxpayer subsidies implicit in federal deposit insurance, emergency central-bank credit and government bailouts.

In recent days, big banks, investment managers and even the governments of Germany, Japanand the U.K. have lamented what they see as the rule’s adverse effects. Their primary complaint relates to an exemption -- inserted in the legislation by the finance industry’s lobbyists -- that allows banks to engage in the business known as market making. This useful activity, which helps customers buy or sell financial instruments, is dominated by a handful of U.S. banks. It can be difficult to distinguish from proprietary trading because both tend to involve buying and selling for the bank’s own account. Market makers do so in anticipation of clients’ needs. Prop traders do so solely to make bets with shareholders’ and creditors’ money.

Impaired Liquidity

The rule’s critics worry that aggressive efforts to eliminate proprietary trading will complicate market making, leading banks to charge more for the service or pull out of the business entirely. This in turn could prompt investors to demand a higher return to compensate for the extra difficulty in making trades, thus increasing borrowing costs for governments and companies. One study, commissioned by a financial-industry trade group, estimates that the decreased liquidity -- that is, the impaired ability to trade quickly and inexpensively -- could add as much as $43 billion a year in borrowing costs for U.S. corporations, while knocking as much as $315 billion off the value of existing corporate bonds.

There are many reasons to question the validity of such analyses. First, they assume that if the rule puts a chill on market making, the structure of the market would remain the same. Unlikely. If big banks such as JPMorgan Chase & Co. and Citigroup Inc. pulled out or charged more, smaller dealers that are not banks, such as Jefferies Group Inc. and Cantor Fitzgerald LP, would probably step in to fill at least part of the void.

The altered environment might also spur new and more efficient ways to match buyers and sellers, much as high oil prices encourage the development of alternative energy. Corporations and governments might seek to address the lack of standardization in bond issues, a characteristic that makes them much less liquid than stocks.

Second, the Volcker rule’s critics talk as if liquidity is an unmitigated good. Questionable. Economists from Keynes to Larry Summers -- and more recently, Adair Turner, the chairman of the U.K. Financial Services Authority -- have suggested that higher transaction costs could be beneficial because they favor long-term investment over short-term speculative trading.

Beyond that, market makers must always stand ready to take a client’s trade, no matter what. Consider the financial turmoil of 2008, when securities firms were trying to get rid of mortgage-backed investments that were rapidly becoming worthless. Is it really desirable that federally insured institutions be among the buyers in such a situation?

Ignoring Benefits

http://www.bloomberg.com/news/2012-02-15/making-the-volcker-rule-better-for-markets-and-the-economy-view.html

Citigroup ‘Defrauded’ Fannie, Freddie: Whistle-Blower

Citigroup Inc. (C), which last week admitted breaking Federal Housing Administration rules and paid a fine, also violated regulations for home loans sold to Fannie Mae (FNM) and Freddie Mac (FRE), according to a whistle-blower’s complaint.

The bank “defrauded, falsified information or misled federal government entities” by selling or securing insurance for mortgages with defects such as improper appraisals and paperwork errors and not reporting them as required, Sherry Hunt, a Citigroup quality-assurance vice president, said in her complaint, which was unsealed yesterday. It was filed under the False Claims Act in federal court in Manhattan in August.

For Citigroup, the third-largest U.S. bank by assets, the high defect rates could be costly. It might be forced to buy back substandard mortgages sold to government-controlled Fannie Mae and Freddie Mac, who buy or guarantee most U.S. mortgages.

Under the Feb. 15 settlement with the U.S. on FHA loans, Citigroup will pay $158.3 million. TheJustice Department reserved the right to pursue criminal and other charges related to mortgages originated or underwritten by Citigroup and not insured by the FHA.

“Everyone is a little bit guilty for not keeping an eye on the processes and doing what we should have been doing,” Hunt said in a phone interview from her home in Silex, Missouri. “Managers have to take ownership of their area, know what’s going on and make sure they’re doing the right thing.”

‘Quality Assurance Processes’

Last year, Citigroup repurchased 6,600 loans from government buyers, an 89 percent increase from 2010, according to a presentation on its website. The bank set aside $1.2 billion to buy back defective mortgages as of the end of 2011 -- the most ever, and up from $969 million in 2010.

“We take our quality assurance processes seriously and have pro-actively undertaken process improvements to ensure that they are as strong as possible,” Sean Kevelighan, a Citigroup spokesman, said in an e-mailed statement.

Andrew Wilson, a spokesman for Washington-based Fannie Mae, and Chad Wandler, a spokesman for McLean, Virginia-based Freddie Mac, declined to comment.

Hunt said New York-based Citigroup knowingly vouched for the quality of loans that were “deficient” in income documentation, had incomplete borrower job histories, appraisal problems, errors in closing paperwork, missing credit reports and miscalculated maximum mortgage amounts, among other flaws. The failures continued into last year, Hunt said.

List of Loans

http://www.bloomberg.com/news/2012-02-22/citigroup-defrauded-fannie-freddie-whistle-blower-claims.html

With Trillions On the Table Nobody Plays Fair, and Everyone Plays for Keeps by Janet Tavakoli

The Fed has been engaging in closed door meetings to change rules for banks. It wasn't until Victoria McGrane and Jon Hilsenrath at the Wall Street Journal asked for the results of votes that the Fed posted them on its web site. Since June 2010, the Fed has held only two public meetings on the changes. But just on the topic of derivatives alone it held 14 meetings with JPMorgan Chase, 12 meetings with Deutsche Bank and Goldman Sachs, and 11 meetings with Bank of America, Barclays, Morgan Stanley and Wells Fargo.

How effective will the Fed's regulations be after it has taken so much input from banks that vigorously lobbied against the already impaired Dodd-Frank Act?

Without knowing more about the meetings, no one can say for sure, but based on the events since the September 2008 on-going financial crisis, I can take an educated guess. The banks will largely have their way in diffusing effective regulation. After all, they've been remarkably adept at preventing the enforcement of perfectly good laws and regulations already in place before during and after the bailouts.

Not only have the banks been defiant, but so have luminaries in the financial community -- at least until they were called out on it.

In January 2009, Warren Buffett, CEO of Berkshire Hathaway, told Tom Brokaw: "the idea that people that move money around are some favored class... strikes me as getting pretty far away from where we should be." Two years later he issued a PR release excusing apparent insider trading by one of his successor candidates, David Sokol. Within a few months, he changed his position in the face of shareholder and media pressure and called the evidence very damning.

http://www.huffingtonpost.com/janet-tavakoli/with-trillions-on-the-tab_b_1290806.html