Wednesday, July 21, 2010

33 Reasons Why Wall Street Reform Won't Help The Stock Market (Or You)

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I thought I would take a little respite in this article from talking about stock market investing to talk about the major news of the day which is the sweeping Wall Street reform bill that Obama signed into law today. I also thought I would offer up some suggestions for reform that I have noticed that I'm sure that won't be addressed in this bill.

One of the first things I noticed about the stories about the bill was that this bill would put a stop to bailouts. Like we needed a law to prevent Congress from bailing people out. I would say that the vast majority of the American people were against the bailouts anyway yet they were passed anyway. One thing I could not believe about this whole mess is that the FDIC was created to protect depositors. Yet, the government went out of there way to basically guarantee the whole balance sheet. A completely unnecessary step. In my opinion, had we not bailed out the players, the dollar would be stronger today.

And don't get me started on the Federal Reserve Bank. Which absolutely turned a blind eye to just about everything under Alan Greenspan. As a former banker and graduate of the Graduate School of Banking, I'm appalled that I now look at my banker as a thief and no longer someone that I can trust. In fact, the other day I went to the bank and was waited on by a gal named "Robin". How appropriate.

I don't know for sure what all of these derivatives are or how they work so I can't really address all of that but here some things that I can say that affect the average everyday business and person like myself that I don't like. Here we go:


  1. You can get a free copy of your credit report but not your score. No one cares about what's in your report anyway. They make you pay for the one piece of information that really matters.

  2. The credit score you get from all of these services is not the score your lender uses when you get a loan.

  3. No one will tell you what score you need to get the best rate plus they won't tell you what it was when they reviewed it AND then charge you more.

  4. YOU have to pay for identity theft insurance meanwhile the people that control the credit reports don't have to do anything to protect you.

  5. They should ban adjustable rate mortgages. It just churns you into refinancing your loan.

  6. When you refinance your home mortgage, you should not have to repay for title insurance, closing costs or re-qualify if your payment has gone down.

  7. Banks should pay checks from the smallest to the largest instead of milking it by letting the largest go through to create more overdraft fees.

  8. All banks and credit cards should have the same cutoff time to make payments, transfers, deposits, etc. It should be midnight in the timezone you live in. Not 2:30 in the afternoon.

  9. When you are late on a payment, you should be charged a late fee, not have to pay 12-15% more in interest for another year plus give up your first born son, etc.

  10. If you do have to pay a higher interest rate, it should come down automatically after there current payments. These rates should be published up front and you should not have to request the decrease.

  11. When you request something from customer service at a bank and you ask to talk to a supervisor, and that supervisor is never available, not getting a call back from a supervisor should be a $500 fine.

  12. Banks should only be able to make loans to make a profit, not invest their cash in hedge funds. Any idiot should be able to make money borrowing money from depositors at ZERO percent and loaning it out at a higher rate.

  13. When you borrow money, all fees that the bank wants to collect should be in the interest rate, not all segmented out.

  14. Just because the bank discloses everything in writing doesn't make it a legitimate business practice.

  15. Fees banks collect processing credit card transaction should be capped and be the same for all merchants.

  16. Stock brokerages should not also be analysts upgrading and downgrading stocks they have interest in.

  17. There should be one credit reporting agency so we don't have to work with three when there is a problem.

  18. ATM fees should be capped at $1 for each bank involved in the transaction and not be $5 plus. I've paid as much as $8 bucks on one side and $2 on the other.

  19. You should be able to pay your bill for free either online, by mail over the phone or on the internet even if you are late and whether or not you talk to a live person or not.

  20. Credit reporting agencies should not charge you for your report or your score ever.

  21. Insurance companies shouldn't be able to charge you higher rates because of your credit score.

  22. Transfers between banks should happen on the same day and not take three days.

  23. Credit card interest rates should be capped at 18%.

  24. When a law is passed changing the way debit card transaction are posted to your account, the bank shouldn't be able to give you a way to opt out of the law to "keep things the same".

  25. All transactions should post to your account at a uniform time of day, not 5pm for bill payments, check clearing at midnight to get overdraw you.

  26. Banks should not be able to offer saving accounts that bear interest rates like .00001%. I mean what's the point.

  27. Banks should not be able to offer me $275 and a free ipod touch for opening an account at their new $5 million dollar branch paid for with your bailout dollars.

  28. Companies to which you owe less than $2500 dollars shoudn't be able to ding your credit report for that $53.00 utility bill you never got and have it stay on there for 7 years.

  29. The time limit for everything on your credit report should be two years.

  30. This has nothing to do with Wall Street or the banks, there should also be one car charger and one wall charger that powers all phones and I shouldn't have to buy a new one every time I get a new phone.

  31. You shouldn't be able to short stocks. Just think if all the money that was put into the short side was forced over to the long side. Instead of trying to find weak companies, let's have the money flow into strong companies. It's not a casino.

  32. Make it impossible for companies that break the law like Goldman Sachs be able to enter a plea agreement where they don't have to admit any guilt.

  33. Tie executive pay to a percent of net earnings not stock price.

Well that's the end of my rant. I know that some of these things don't have anything to do with stocks but I don't like them anyway. Have a great day.

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