Dodd-Frank Targets What?!

Dodd-Frank does nothing to protect investors from the systematic risk created by too big to fail banks. Wall Street banks are still swinging for the fences with their Bernanke bucks. Instead of true financial reform, DF is full of pet issues. One is to hurt energy companies that Obama targeted in his re-election campaign. As John Berlau points out in National Review Online:

Hold on. A provision targeting energy companies — in a banking bill?

In the almost three years since Dodd-Frank was rammed through Congress, Fannie Mae and Freddie Mac — significant players if not the largest culprits in the mortgage crisis — are bigger than ever. The law did not lay a hand on them.

And many on both left and right say Dodd-Frank didn’t make a start on curbing the power of too-big-to-fail banks. In fact, the law’s designation of “systemically important financial institutions” through its Financial Stability Oversight Council enshrines too-big-to-fail by telling creditors which financial firms the government will spare from a normal bankruptcy.

But rest assured that Dodd-Frank is working — at great cost — to force energy companies to tell shareholders each and every payment they make to foreign governments, and all public companies to say whether they have ever used tin or tungsten from the Democratic Republic of the Congo. As explained by Mercatus Center scholars Hester Peirce and James Broughel in their book Dodd-Frank: What It Does and Why It’s Flawed, the law’s “miscellaneous provisions” in Title XV offer “a clear example of how a statute invoked as the answer to the financial crisis is, in reality, an odd conglomeration of responses to issues, many of which had nothing to do with the financial crisis.”

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E.J. Smith - Your Survival Guy

Preparing your investments and family for when disaster strikes.

E.J. Smith is the Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH, where he completed course-work in Practical and Defensive Handgun, Conceal Carry Pistol, Shotguns, Precision Scope Rifle and Kidnapping Prevention. E.J. plays a Yamaha Recording Custom drum set with Zilldjian cymbals. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com. Sign up here to receive all the best content from Richardcyoung.com each week.