BBC: Markets fall after Obama sets out new bank rules

news.bbc.co.uk...

Markets fall after Obama sets out new bank rules

Stock markets have fallen sharply in response to far-reaching plans by US President Barack Obama to curb the activities of the biggest US banks.

The Dow Jones closed down 2%, its worst fall since October, while Japan's Nikkei closed at a three-week low.

Shares in major US banks Goldman Sachs and Bank of America all fell.
Mr Obama - who said he was "ready for a fight" with banks - plans to limit the size of banks and impose restrictions on risky trading.

"Never again will the American taxpayer be held hostage by banks that are too big to fail," Mr Obama said.
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Smooth move, Obama.

Second line.

reply to post by Dbriefed
'Markets fall'....in this case it's the same thing as shining a torch in a dirty kitchen. The cockroaches scuttle away. These amoral bastards are back to business as usual. Bank charges have risen again. A new round of bonuses are on the way in the European markets. Whether we like our greasy leaders or not, someone has to step up and stop the greedy bankers from tanking the economy again.

Go Obama...and go any leader who can wag the tail instead of the tail wagging the dog

That is what happens when you present uncertainty to a market that already has multiple factors of uncertainty.

Markets thrive on the ability to conduct business in the most efficient manner. The majority of people that enter the market do so, because of stability and understanding that in the long run it is a sound and more profitable investment to make.

When uncertainty hits, stability is shaken and threats of even more regulations are spoken of, people will jump ship.

It really is a simple thing to see. Government states its going to impose fees on say, wheat. This fee/tax/whatever is going to cause either the farmer to pass along the extra costs of growing and selling wheat to the consumer or will grow corn instead. The third option of course the farmer decides to exit the market. The demand side of it will get screwed either way....either higher prices or less supply. Same with the banks, just more intertwined and complicated.

It is an oversimplified example but is the same principles and same effects.

Government tries over and over to dictate the markets cause they just love the playing god factor.

Obama is not going to do anything. He is all talk.

How many times has the guy lied? Like hundreds of times...

Heres an idea.. impeach obama and slip ron paul in his palce, temporarily..think of it as a test of a man of his words

Don't the UK markets fall each time Obama or Gordo open their mouths???

This is a good reform. These investment bank are backed by FDIC and gamble their money away knowing that they will at least get their principal back by the American tax money should they lose.

It's stupid.

Some of the major institutions brought up failing counterparts in order to stop a literal collapse of the market. Reducing the size of banks, has to ask the question of debt. Making the debtor significantly small will lead to their eventual bankruptcy.

Even worse crisis.

Plus, banks/financial services contribution to GDP has reason since Glass-Steagall Act was repealed. Europe is not considered this reform, the British Conservative party only offer a watered down version.

Economic suicide.