Tag: Congress

Buy or sell: GameStop frenzy has Washington teasing action on Reddit vs. Wall Street

Mary Pat Campbell

Link: https://www.nbcnews.com/politics/politics-news/buy-or-sell-gamestop-frenzy-has-washington-teasing-action-reddit-n1256142

Excerpt:

A number of Democrats and Republicans united in opposition this week to the strict limits imposed by Robinhood and other online stock brokerages on the purchasing of GameStop and other stocks swept up in a Reddit-fueled trading frenzy.

Disparate members of Congress like Alexandria Ocasio-Cortez, D-N.Y., Ro Khanna, D-Calif., Ted Lieu, D-Calif., Ken Buck, R-Colo., and Sens. Pat Toomey, R-Pa. and Ted Cruz, R-Texas, were among those who criticized the move, with many calling for hearings that Democratic leaders say will soon take place in both the House and Senate as what began as an internet movement continues to roil Wall Street.

Lawmakers trained attention on the volatility surrounding GameStop’s stock as several others this week. The stock climbed from $4 only a few months ago to more than $400 this week, juiced by an online movement not dissimilar to others that have broadly altered the political landscape in recent years. At the same time, hedge funds that made large bets on GameStop’s stock cratering — known as “shorting” — began to pile up big losses. Then the brokerages instituted limits, leading to charges of collusion with the larger financial entities facing big losses.

Author(s): Allan Smith

Publication Date: 29 January 2021

Publication Site: NBC News

Your Regulator Overseers

Mary Pat Campbell

Link: http://pointsandfigures.com/2021/01/31/your-regulator-overseers/

Excerpt:

As you know, Congress oversees the bureaucracy.  It’s agencies, the unelected bureaucrats that make a lot of the regulations that affect our lives.  Colloquially, you might know this as a part of The Deep State.  The Senate Banking Committee and the House Financial Services Committee oversee the Securities and Exchange Commission (SEC).

The GameStop saga has laid a lot of things bare.  But one thing that needs pointing out is that most of the people on those committees have no clue how the entire financial system as it pertains to exchanges and markets works.  I am not impugning the personal characters of the Senators and House members on the committees.  In 99.9% of the cases they are decent and intelligent people. What I am saying is most of them have no clue when it comes to understanding the industry they are charged with overseeing.   It is rare when you find an elected official that really and truly understands.  Not rare like a four leaf clover rare. Rare like seeing a tiger in the wild rare.

I am not talking about trading markets either as plenty of elected congresspeople seem to know how a brokerage account works. I am talking about understanding the mechanics and plumbing, and truly understanding.

Author(s): Jeffrey Carter

Publication Date: 31 January 2021

Publication Site: Points and Figures

Congressional COVID relief package could help Texas bolster pension funds for teachers, state workers

Mary Pat Campbell

Link: https://www.dallasnews.com/news/politics/2021/02/08/congressional-covid-relief-package-could-help-texas-bolster-pension-funds-for-teachers-state-workers/

Excerpt:

 With President Joe Biden and a Democratic-controlled Congress moving ahead on a coronavirus relief package, Texas budget writers are beginning to look at how they might use federal funds for one-time “investments,” such as bolstering pension funds for retired teachers and state workers.

….

That’s only one way state coffers could be altered now that the federal government is led by Democrats. Unlike Republicans who controlled the U.S. Senate during former President Donald Trump’s administration, the Democrats and Biden want to send money to aid state and local governments. Of a $1.9 trillion package, some $350 billion would go to states and localities.

….

“Those investments may be made in our retirement funds or one-time plugs or capital investments,” Kolkhorst said. She referred to lawmakers’ ongoing efforts to make the Teacher Retirement System and the Employees Retirement System more actuarially sound, and to deteriorating buildings used as state offices and at state mental hospital campuses.

Author(s): Robert T. Garrett

Publication Date: 8 February 2021

Publication Site: Dallas Morning News

GameStop Frenzy Is Tough Call for Regulators Focused on Transparency

Mary Pat Campbell

Link: https://www.wsj.com/articles/gamestop-frenzy-is-tough-call-for-regulators-focused-on-transparency-11612693802

Excerpt:

One reason regulators might be stymied is a lack of political will to limit trading by small investors. When Robinhood temporarily blocked its customers from trading GameStop shares during the frenzy, a cry went up about market access. The big losses those little guys inflicted on some hedge funds by bidding up the stock was seen as a democratization of the market. Any effort to derail that could be criticized as protection for Wall Street.

“Most people believe that middle-class people, working people, should be able to take their chances on the stock market,” Rep. Maxine Waters (D., Calif.), who leads the House Financial Services Committee, said in an interview.

The consensus among regulators so far is that the episode didn’t expose major problems with the market’s plumbing. The Treasury Department said Thursday that regulators believe the market’s “core infrastructure was resilient.” The department said the SEC is reviewing “whether trading practices are consistent with investor protection and fair and efficient markets,” and is expected to release a report on the factors that influenced it.

Author(s): Paul Kiernan and Dave Michaels

Publication Date: 7 February 2021

Publication Site: Wall Street Journal

Investors ready for change as Democrats take control

Mary Pat Campbell

Link: https://www.pionline.com/washington/investors-ready-change-democrats-take-control

Excerpt:

While the COVID-19 pandemic and its economic impact present the most pressing challenges, Democratic control of Congress and the White House could also spur action on issues ranging from climate change to scrutiny of private equity practices.

…..

Mr. Neal’s first bill introduced in the new 117th Congress addresses the multiemployer pension crisis that he said “has only worsened” in the COVID-19 economic downturn. A similar proposal was introduced by members of the House Education and Labor Committee, whose chairman, Robert C. “Bobby” Scott, D-Va., said the pandemic could cause as many as 180 more multiemployer plans to become insolvent, adding up to 300 plans facing failure. Both leaders are urging that the proposed Emergency Pension Plan Relief Act of 2021 be attached to a COVID-19 relief measure now before Congress.

…..

Potential legislation is expected to build on the panel’s climate action plan calling for clean energy tax credits and jobs initiatives, investments in water infrastructure and research into land and ocean climate solutions, among other ideas.

Author: Hazel Bradford

Publication Date: 25 January 2021

Publication Site: Pensions & Investments

Democrats Introduce Bill to Protect Pensions, Expand PGBC’s Power

Mary Pat Campbell

Link: https://www.ai-cio.com/news/democrats-introduce-bill-protect-pensions-expand-pgbcs-power/

Description: Bill introduced in House of Representatives – EPPRA (Emergency Pension Plan Relief Act of 2021) intended for multiemployer pension protection. Boosts PBGC MEP guarantee, stops benefit reductions, allows for partition of failing MEPs. Similar provisions had been in HEROES bill in 2020 (not passed).

Author: Michael Katz

Publication Date: 22 January 2021

Publication Site: ai-CIO