Friday, January 22, 2010

Obama, wtf?

Yesterday US President Obama came out with his latest brain-fart of cutting proprietary trading from banks and restricting them from owning or backing any hedge funds or private equities. I mean, what's he been smoking? He's removing prop trading so bankers and traders "cannot gamble with (government insured) depositor's money". I feel that that's unfair categorization. It's true that some hedge funds traders and investment bankers are responsible for the financial crisis. But throwing out a ban like this is like categorizing all hedgies and bankers as evil. It's just unfair. Most hedge funds are less risky than the buy-only mutual funds (because they can hedge their bets... duhh.), and most hedge fund managers are responsible people who take their careers and their investors' money very seriously. To give the impression that by putting a leash on traders he can effectively prevent this mess from happening again is just over-simplifying things and naive.

More importantly, it almost feels like the guy just wakes up with new ideas to mess things around. A few weeks ago we got the bonus tax, which was pretty sick already. (He wants to tax bankers who receive big bonus in 2009 because they're the idiots who got us all into this mess and because the rest of the economy is still suffering from unemployment etc. Again, over-categorization. Maybe the bankers getting the bonuses actually did what they could to prevent the ship from sinking even faster? It's unfair to rip them of their contributions even in a messy situation. Oh, and maybe these bankers actually have their lives depended on the big bonuses? Traders generally make a not-amazing base salary, and their lifestyle and all depends on the size of the check at the end of the year. It's unfair to judge people as wrong because they lead an above average lifestyle.)

I have a feeling that Obama's just throwing out this new prop-trading ban for popularity after the Democrats painfully lost in Massachusetts because they're desperate to do something. All in all, I'm very disappointed and everything smells less and less like democracy and more and more like something else common in China. What happened to checks and balances? Don't get me wrong, I supported Obama during the election and (I think) I still do. I just hope he can get his act together becuase supporters are losing patience.

Bonus: Hilter finds out the Massachusetts Senate seat was won by a Republican

Yeah, some of us might be wishing we've stuck with Hilary instead.

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