Mutual Fund Regulation

[mastein]

The house just passed a bill regulating the mutual fund industry. (Closing the barn door after the horses are long gone) I have 2 questions.

1) The CNN piece I saw gave a very vague overview of the bill, does anyone have better information?

2) For all you Hill types on here (and I know there are plenty), Is there a shot in hell of the Senate acting on the measure? I doubt it but want deeper insight.

[cthrumatrix]

1. it's on Yahoo...not great details..but it's there

[rapier]

2. Mutual Fund protection thru PR act.

Don't have a link.

Here is a summary I saw.

Require two thirds of a fund's board of directors to be independent.

-Ban fund executives from short-term trading in shares of their own funds.

-Prohibit the same person from managing a mutual fund and hedge fund.

-Establish strict monitoring of 4 p.m. trading deadline that requires an audit trail to ensure system is not being gamed.

-Allow, but not mandate, funds to charge more than a 2 percent fee to discourage short-term trading.

-Require brokers to disclose special financial incentives they received to sell a fund.

-Require funds to have a chief compliance officer who reports directly to independent directors.

-Require independent directors to approve fund manager compensation and make that information public.

I stole that summary from here.
http://www.capitalstool.com/forums/index.php?s=0708abb0ee620d5482bdc6410c5ecff7&act=ST&f=7&t=4154&st=25



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A big yawn. The only funny thing is how fast they got this thru. See how effective government can be when it works as a partner with bussiness.

This is a PR bill. See folks, everything is fine now. Nothing to worry about. Your retirement wealth is assured.

No matter that the funds, like the rest of Wall St. are a corrupt criminal enterprise. Just forget that and we will all be rich.

No all that remains is to forgive all those naughty boys and get back on with the rounding up of your money so they can skim off some more. In the case of Mutual Funds since there are $7 trillion in them a bit of skimming goes a long way for a few thousand players.

[mastein]

3. Tipping the balance

First Rapier, thank you. I appreciate the summary.

Now if I may wonder aloud for a moment. . . Is the loyal opposition so in the pocket of business and wall st. types that they really don't care about the majority (give or take) of American homes that have money in the market. It also seems antithetical to their own values.

Also, we must look inside ourselves on this. . . Of the leading Dem. candidates for Pres. the largest donors to all candidates seem to be wall St. firms. Kerry in particular seems to have lots of backing on the street. I am not saying this to be pos. or neg. on any one candidate, but bring it up as something we should question the field on.

[rapier]

4. notes

When it comes to Wall St. the Dems are pussys.

The regulations aren't all that bad actually. The problems lie much deeper. They go to the very heart of our economy and culture. Simply put, stocks are a naked speculation. Wall Street is a den of theives.

The 401K thing was a brilliant move by the government to subsidize Wall St. and corporate America. It spawned a generation long propoganda campaign to convince people that stocks were an investment, not the speculation that they are. There are even 2 cable networks now devoted exclsively to sending out the word.

The result has been the biggest wealth transfer in history.

The PR success has been so complete that people think there is no alternative to stocks and bonds. (I should note that the Fed has done its part by producing the ultra low interest rate regeim which has made simple savings a losing propositon. This was the intent by the way)

Even progressives have no alternative, nor even the hint that they need one beyond rote diatribes against corporations. There is no political alternative to stocks as our nations religion and saviour. That is why the market has to be strong. It has to be. Our financial system and therefore economy is 1000 times more dependent on the stock market than it was in 1929.

The sins of the mutual funds go way beyond the simple skimming and scalping revealed so far. They are the primary enablers of bubble mania. Mutual funds are now as fully invested as they have ever been. The only sin the managers can make is to miss any rally. It should be noted that if the market goes down and their fund loses, they don't lose, as long as they don't lose much more than the next guy. However if their upside performance slacks just a tad they are toast. There is zero incentive for prudence or old fashioned searhing for value.

They all simply play the momentum game. All of them rushing from one hot idea to the next. Avidly buying up the biggest piles of shit stocks because everyone else does. Then unsurprisingly the stock goes up, for awhlie, and they think they are smart.

And we pour our money into their hands every month. Pouring our 'savings' into stocks and taking them ever higher as corporations go ever deeper into debt, urge us to go into debt, pay off insiders every larger amounts and as they gain total control of all three branches of government by using the arguement that we have to subsidize corporations so the stocks can go up and we can retire fat and happy.

Stocks have to go up. We have no alternative but to send the funds our money. Stocks will go up most believe because it is apparant that the Fed and the Treasury and the commerce and labor departments are full partners in selling stocks and in directly and indirectly proping them up.

Selling all your stock is the simple best protest. It might just be smart to, Perhaps the elite can pull off the ever rising stock game. So what. As a matter of principal however it is time to say enough is enough. Owning stocks is your vote for the status quo.