- Companies selling mortage-backed securities will be required to retain a portion of the risk on their own books. The originate-to-distribute model, where dealers bundled up loans and immediately turned around and sold off the whole package, created a system where bundlers had no incentive to make sure the underlying loans were any good. This provision helps rein this in.
- Commercial banks will face restrictions on the amount of proprietary trading they can do. This is the so-called Volcker Rule, and although it was watered down in conference (banks can still trade up to 3% of their capital for their own accounts) it's still a pretty good safety valve for the banking industry.
- A Consumer Finance Protection Agency will be set up within the Federal Reserve. I was initially opposed to housing the CFPA at the Fed, but I came around to the idea based on the argument that this will allow the CFPA to offer higher salaries and attract better talent. This is a significant win, and Elizabeth Warren says she's pretty happy with it.
- Derivatives trading will largely be forced onto public exchanges. Certain standard derivatives will still be offered over-the-counter, which is too bad, but more complex instruments like credit default swaps will be made considerably safer by this rule.
- Dick Durbin's interchange regulation for debit cards was adopted. This doesn't affect the safety and soundness of the banking system, but it's a good step forward for transparency and consumer protection.
- Capital requirements for large banks will be increased. Together with the Basel III requirements currently under negotiation, this is a key step toward making the entire financial system safer and less leveraged.
- Other changes that are good, though watered down from where they ought to be, include ratings agency reform, resolution authority, systemic risk regulation, and SEC authority over hedge funds.
What is in the soon-to-be-passed Financial Reform Bill? Kevin Drum does the work so I don't have to:
They say it's always 10 years away, but Laser Ignition is more encouraging that the toroidal approaches:
The question, Moses said, is "Can we build a miniature Sun on Earth?" The recipe involves a peppercorn-size target of hydrogen isotopes deuterium and tritium heated to 200 million degrees Fahrenheit for a couple billionths of a second. To get that micro-blast of heat, the National Ignition Facility (NIF) uses lasers---coherent light---at a massive scale. Laser engineer Moses notes that photons are perfect for the job: "no mass, no charge, just energy."And the bastards that oppose moving to renewable energies will be convinced they were right, when it was only luck that saved civilization from the end of oil. Oh well. I'll take the win.
Moses ran a dramatic video showing how a shot at the NIF works. 20-foot-long slugs of amplified coherent light (10 nanoseconds) travel 1,500 yards and converge simultaneously through 192 beams on the tiny target, compressing and heating it to fusion ignition, with a yield of energy 10 to 100 times of what goes into it. Successful early test shots suggest that the NIF will achieve the first ignition within the next few months, and that shot will be heard round the world.
The new U.S. health care reform law was the best option for providing health insurance to the largest number of people while keeping federal government costs as low as possible, according to an analysis by the RAND Corp., a nonprofit policy think tank.That makes me happy. It's nice that a technocratic process can lead to an optimum policy.
Researchers used a specially designed computer model to simulate more than 2,000 different policy scenarios and found that the only alternatives to the new health reform law were all politically difficult because they would have included much higher penalties for noncompliance, lower government subsides, and less generous Medicaid expansion.
Under the new health reform law, about 28 million Americans will be newly insured by 2016, according to the analysis.
"Of all the proposals on the table that would expand health insurance to more Americans, the final health reform law included those that covered the largest number of people at the lowest cost to the federal government," study author Elizabeth A. McGlynn, a senior researcher at RAND, said in a news release from RAND.