Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

The Significance of John Cornyn's Financial Reform Amendment

By

Bill to protect US taxpayers from funding bailouts of "irresponsible" foreign governments just part of coming tsunmai of financial protectionism.

PrintPRINT

In early March on the Buzz & Banter (subscription required), in an effort to describe the global bailout saga, I offered:

A single swimmer struggles off shore and the lifeguard readily goes to the rescue.

A second swimmer struggles off shore and the life guard readily goes to the rescue, albeit a little tired.

A third swimmer struggles off shore and the life guard goes to the rescue, and strains bringing the swimmer back.

A fourth swimmer struggles off shore and the life guard goes to the rescue and really struggles to bring the swimmer back.

A fifth swimmer struggles off shore and the life guard hesitates to go to the rescue, but ultimately does, but damn near dies on the way to shore.

A sixth swimmer struggles off shore and the life guard wonders why the responsibility to rescue these people is all on his shoulders, but heroically goes out and brings the sixth swimmer in, but choking on water.

A seventh swimmer struggles off shore and the lifeguard stays on the stand, thinking "It's not my problem. They should have known better."


Well, it looks like we may not get to seven because the people on the beach are now trying to grab the lifeguard and are screaming at him to sit down because they think he'll drown if he goes into the water again.

I offer this after reading yesterday that US Republican Senator John Cornyn from Texas, offered an amendment to the current financial regulatory reform bill to protect US taxpayers from paying for bailouts of "irresponsible" foreign governments. Per Senator Cornyn:

"American taxpayers have seen more bailouts than they can stomach, and the last thing they should have to worry about are their hard-earned tax dollars being used to rescue a foreign government...This amendment will help prevent American taxpayer dollars from underwriting dysfunctional governments abroad."


Well yesterday the amendment passed 94-0.

Per Zerohedge, should the amendment become law, the Obama Administration will be required "to evaluate any proposed bailout of a foreign nation where that nation's public debt exceeds its annual GDP, and then to certify to Congress whether the bailout loan will be repaid. If the Administration cannot certify that the bailout loan will be repaid, it will be required to oppose the bailout and vote against it at the IMF."

In March people laughed at me when I offered that the referendum in Iceland (in which the populace overwhelmingly voted down the reimbursement of the UK and Dutch governments following those governments' bailout of Icelandic bank depositors) mattered.

But Iceland was just the first wave of what I believe will be a tsunami of financial protectionism, as voters around the world demand that bailout dollars be spent at home (if spent at all).

But with a lot of nations currently struggling to swim in deep water, I suspect that as more and more lifeguards are told to stay home, it will be only be a matter of time before we start to see the bodies wash up on shore.

Position in SPY, SH, SRS, and JPM.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE