Hedge funds will face a more aggressive approach from the federal government in months and years to come, Securities and Exchange Commission (SEC) Chairwoman Mary Schapiro said Friday, adding that she'd like the agency to expand to meet those needs.
"I think it's necessary to regulate hedge funds," Schapiro said during an interview on the Fox Business Network. "I think they are too big of a part of the marketplace for the SEC and the federal government to not have a handle on the impact they're having on the markets, the strategies they're employing -- it's time for that to happen."
Schapiro said she wanted the funds, which have traditionally been only lightly regulated relative to other parts of the financial services sector, to have to register with the SEC, face more stringent reporting requirements, and be more transparent with their records and business practices with the SEC.
"We need information, so that to the extent they could be engaged in manipulative activity or insider trading," Schapiro said.
The SEC chairwoman also pressed her case for more funding for the financial oversight agency, which she said would have to "expand very significantly" in coming years.
"The agency is not as big as it needs to be, and we don't have all of the tools we'd like to have," she explained. "We could be multiple times larger than we are. So over the next few years, I would like to see the agency expand very significantly."
The Senate has too many priorities on its agenda to handle "card check" legislation anytime soon, Majority Leader Harry Reid (D-Nev.) said yesterday.
Reid told a lunch crowd at the Las Vegas Chamber of Commerce on Wednesday that the Employee Free Choice Act (EFCA) would have to wait for the meanwhile.
The Senate is expected to focus intently on healthcare upon returning to Washington in September, with an intense climate change bill debate expected to follow before the end of the year.
AFL-CIO Secretary-Treasurer Richard Trumka acknowledged earlier this week that EFCA would have to wait until after healthcare reform is finished, but it's unclear how long labor groups would be willing to wait for the Senate to take action on their top legislative priority.
"We WILL PASS EMPLOYEE FREE CHOICE ACT legislation, we will not allow our 'friends' to pass on this essential part of an economic recovery solution!" he said.
The enmity toward Federal Reserve Chairman Ben Bernanke shared by both some Republicans and some Democrats probably show he's a good choice to continue to lead the Fed, Sen. Ted Kaufman (D-Del.) said Tuesday.
"He has probably as many problems with my colleagues on the Democratic side as he has Dick Armey's problems on the Republican side," Kaufman said this morning during an appearance on CNBC. (Former House Majority Leader Dick Armey [R-Texas] was among the guest panelists.)
"But that may be a sign he is independent, he's doing a good job, and I am definitely going to vote for him, I think he's a wonderful selection," Kaufman added.
The freshman Democrat said he expected Bernanke to win confirmation to a second term as chairman of the Federal Reserve, but cautioned "you never know with the Senate."
Kaufman praised Bernanke's work at the height of the financial crisis, saying the Fed chairman did "some incredibly smart things" to stave off a collapse in the financial system.
The economy could spiral into hyperinflation not seen since the early 1980s if the Federal Reserve does not tighten its monetary policy soon, Sen. Chuck Grassley (R-Iowa) warned Tuesday.
Grassley, speaking about the renomination of Federal Reserve Chairman Ben Bernanke to a second term as head of the Fed, asserted that Bernanke's ability to reign in inflation would be the metric by which the Fed's success would be measured.
"We won't know for a year if he's done a good job so far, because he shoveled money out of an airplane to save banks and the financial system," Grassley said in a conference call with Iowa reporters. "But shoveling money out of an airplane to solve problems can be inflationary -- in this case, hyperinflationary -- if he doesn't stop mopping up some of the money that's out there."
Grassley, the ranking member of the Senate Finance Committee, said that inflation as a result from government spending on bailouts could result in inflation rivaling rates in 1980, when it hit a peak of 13.5 percent.
"The Fed has the ability to put money out, it's got the ability to take money back in, and if they don't do that, we will have hyperinflation worse than we had in 1980 and '81," Grassley said. "And I hope he demonstrates that ability."
Grassley argued that while it would be a year until lawmakers will know whether Bernanke has been successful at bringing inflation under control, it would probably be best to keep the chairman on board for a second term as head of the Federal Reserve.
"I would suggest that right now, when everybody's nervous about the economy, that you don't change horses in the middle of the stream, and consequently, it would probably be detrimental to not have him reappointed," he said.
Federal Reserve Chairman Ben Bernanke will not enjoy an easy Senate path to being confirmed as chairman of the Federal Reserve, Sen. Chris Dodd (D-Conn.) pledged late Monday night.
Dodd, the chairman of the Senate Banking Committee, said that while he will "probably" personally support Bernanke, "serious questions" remain about Bernanke and the Fed.
"While I have had serious differences with the Federal Reserve over the past few years, I think reappointing Chairman Bernanke is probably the right choice,"
A top labor official said Monday that President Obama and White House Chief of Staff Rahm Emanuel have indicated that they will not bring up "card check" legislation until after healthcare reform is done in Congress.
AFL-CIO Secretary-Treasurer Richard Trumka, the expected incoming president of the influential union, pledged during a web chat on the liberal blog firedoglake that organized labor would work to pass healthcare reform in order to move onto one of its top priorities, the Employee Free Choice Act (EFCA).
"The President/and Emanuel have both said they dont intend to bring Employee Free Choice Act up until Health Insurance Reform is done," Trumka wrote on the blog. "Which gives us an additional reason to do Health Insurance Reform now!"
The remarks all but acknowledge that EFCA, one of labor's most prized legislative goals, will take a backseat to the Obama administration's most pressing priority for the meanwhile.
Obama has endorsed the union organizing bill, though he and other senior administration officials have spoken about it much less in public as centrist Democrats in the Senate have been reluctant to fully back the bill.
Republicans, for the most part, have opposed the bill as a threat to businesses.
Trumka also sent a message to allies in the White House and Congress that they expected eventual movement on EFCA, and that it could not be put off indefinitely.
"We WILL PASS EMPLOYEE FREE CHOICE ACT legislation, we will not allow our
President Obama insisted Friday he's not trying to vilify insurers in his bid to overhaul the nation's healthcare system, subtly breaking with one of the House's top leaders.
Obama said during a town hall meeting this afternoon that he's not seeking to make insurers into a bogeyman, just over two weeks after House Speaker Nancy Pelosi (D-Calif.) called insurance companies "villains" in the national discussion over health reform, and just over a week after his own political arm chided insurers.
Facing a question from a Montanan who sells individual health insurance policies, the president denied that he is trying to turn the powerful insurance industry into a bogeyman in the debate over heath reform.
"My intent is not to vilify the insurance companies," Obama said in his Montana town hall.
"If I was vilifying them, what we would be doing would be to say that private insurance has no place in the health care market, and some people believe that," the president added. "I don't believe that."
Those words contrast a bit with those made by House Speaker Nancy Pelosi (D-Calif.) earlier this summer. Pelosi accused insurers of a "carpet-bombing" campaign against reform, and said the companies were immoral for engaging in their campaign against reform.
"It's almost immoral what they are doing," Pelosi said in late July. "They are the villains. They have been part of the problem in a major way. They are doing everything in their power to stop a public option from happening."
The president's words toward insurers may also be a bit inconsistent with messaging dispatched by his political arm, Organizing for America. That group, which is administered by the Democratic National Committee, accused insurance companies of using "scare tactics" to "incite" unruly protests in town halls over the August recess.
Lawmakers should examine extending a "cash for clunkers"-like program to other products, the principal House sponsor of the bill to authorize the program for auto trade-ins said Monday.
"I think all of that is worth thinking about," Rep. Betty Sutton (D-Ohio) told CNBC when asked if a "clunker" program to other large consumer products.
Sutton, a Democrat from Cleveland in her second term, defended the program as one of the most stimulative pieces of spending enacted by Congress this year.
"We can get a lot of bang for the investment," Sutton said. "And hopefully, we'll be smart with our policies out there that can successfully stimulate the economy while helping consumers and accomplish other things."
Sutton called the program for autos, which was overwhelmingly approved for a $2 billion extension by the House last week, "an innovative idea to accomplish multiple goals."
The extension faces a vote in the Senate this week, where procedural rules may make things a bit more difficult for the fast-tracked legislation.
There is a "flurry" of activity in Washington, D.C. to ensure the "cash for clunkers" program will continue to be funded, one of President Obama's senior economic advisers said Friday morning.
"We just got a note from our legislative folks that absolutely, if people want to go out there, the money is still there," Council of Economic Advisers (CEA) Chairwoman Christina Romer during an appearance on CNBC.
"There's a flurry of activity, working with Congress, to make the funds are there for it," she added.
The government had notified lawmakers late on Thursday that the stimulus plan, which allows consumers to trade in less fuel-efficient vehicles in exchange for vouchers for new, more environmentally cars, had run out of money after less than a week in existence.
Rep. Pete Hoekstra (R-Mich.) indicated Monday that the apparent suspension of the program was initiated by the Department of Transportation, only to be reinstated by the White House.
Hoekstra tweeted Friday:
Cash for clunkers was re instated by WH very late last night overruling transportation dept. Lots of guessing on data/very little hard data
Romer seemed to signal that the administration would work to keep the program in place.
"We think it's great for the environment and great for the auto industry, so this is good news," she said of the quick burn through the $950 million allotted for the program.
Corporate chieftains worried about Congress's impending regulation of executive pay should remember: Most Americans don't get bonuses.
Rep. Barney Frank (D-Mass.), the chairman of the House Financial Services Committee, argued Tuesday for more rigorous regulation of compensation for financial sector employees ahead of mark-up of that legislation during an interview on Bloomberg News.
Frank took a shot at some bank executives who have complained about the new rules the legislation would impose on bonuses.
"If you're the head of JPMorganChase, Goldman Sachs, Morgan Stanley -- any of these major institutions -- what is it about your chracter that says, yes, you're highly paid to run a very important organization, but to make sure that you do your job right, we have to give you an extra bonus?" Frank asked on Bloomberg. "Most of us do our jobs without extra bonuses."
Frank said that the impending U.S. regulations would be part of a "coordinated" effort with other financial centers to set up a single global standard for some aspects of executive compensaion.
"I think you're going to see the kind of rules we are adopting to reduce risk incentives internationally adopted," he said.
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