Tuesday, June 15, 2010

Kanjorski Amendment- Much About Nothing

Paul Kanjorski has been making headlines lately over his amendment to the Wall Street Reform Bill. Click here to read its provisions.

The particular section that is the red herring in this piece of legislation is Section 1105 (h)

(h) JUDICIAL REVIEW.—For any plan required under this section, a financial company subject to stricter prudential standards may, not later than 30 days after receipt of the Council’s notice under subsection (e)(5), bring an action in the United States district court for the judicial district in which the home office of such company is located, or in the United States District Court for the District of Columbia, for an order requiring that the requirement for a mitigatory action be rescinded. Judicial review under this section shall be limited to the imposition of a mitigatory action. In reviewing the Council’s imposition of a mitigatory action, the court shall rescind or dismiss only those mitigatory actions it finds to be imposed in an arbitrary and capricious manner.

Forget all the hubbub. It means they can haul the government into court. Did you ever hear this joke?

My wife walked into the den & asked "Whats on the tv?" I replied "Dust". And that's how the fight started.....

Well item (h) .....And that's how the fight started.

To sum up the Kanjorski amendment it does talk about breaking up companies but there would have to be substantial time before that happens due to the considerations that must be met in Section 1105 Items (a) through (d). Item (e) defines the due process owed to the companies and what steps including items (f) and (g) that would be taken including a review by the Treasury Secretary. However, as I stated item (h) allows the companies to haul the government into court to prevent the government from implementing the plan. When was the last time you saw an expedited process in court involving $100 billion companies?

Define this verbage/garbage in Section 1105(a)-poses a grave threat to the financial stability or economy of the United States, the Council shall require the company to undertake 1 or more mitigatory actions described in subsection (d). Who determines the grave threat? When is that threshold crossed? The Council...I thought BP was a grave threat to the Gulf...how is the government doing so far managing that mess.

Didn't Kanjorski talk about a money market run on the banks that happened within hours??? Didn't he say the world economy would collapse?

On Thursday at about 11 o'clock in the morning the Federal Reserve noticed a tremendous draw down of, uh, money market accounts in the United States to the tune of $550-billion was being drawn out in in a matter of an hour or two...We were having an electronic run on the banks. They decided to close down the operation, to close down the money accounts. ... If they had not done that, in their estimation, by 2 PM that afternoon $5.5-trillion would have been withdrawn and would have collapsed the U.S. economy and within 24 hours the world economy would have collapsed

How in the world is this amendment ever going to stop that from happening?
Why is it so easy to pick apart his veiled actions? Is it because they were never meant to address a complicated problem?

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