“Do no harm”

The phrasing Dudley used in asking Congress to preserve key regulations underscores the imperatives of the measures he his trying to preserve. Many of the core financial regulations in place today are a direct result of the 2008 crisis – which was itself a direct result of lack of sufficient regulation and oversight. The effects of the financial crisis were far-reaching and deep. We all experienced the negative effects and there are still people trying to recover what they’ve lost. It’s been a slow climb back to stable levels, but our economy is rebounding and investor activity is healthy; in fact, Wall Street indices have reached record highs over the last year. A return to normalcy could not have been achieved without the financial regulations put in place following the crash. While it seems that a review and potential overhaul of current measures is likely, eliminating the regulations that have helped us recover would not only be unwise, but could actually cause real harm to our economy. Fed experts also warn that financial deregulation can be a slippery slope, leading to massive unwinding of protective measures.

Key Financial Regulations

While Dudley did agree that some current regulation warrants adjustment, the key regulations maintaining a healthy financial industry must remain untouched. Among the key financial regulations, he listed standards upholding stronger capital, liquidity, and clearing must be kept in place.

This week, market analysts and investors saw Wall Street regaining upward traction. Dow and S&P indexes soared to record weekly gains, buoyed by a flurry of trading activity. According to a Reuters report, financial investing has been one of the major drivers, followed by industrial and tech.

Financials

• Bank of America, MorganStanley and Citigroup up 1 percent

Industrials

• Boeing and Caterpillar up 1 percent

This rebound comes ahead of the upcoming, two-day Federal Open Market Committee meeting at which Federal Reserve Chair Janet Yellen will speak. Investors will be looking for signals as to when new interest rate hikes might be announced. Investors are also watching for an announcement on the Fed’s plans to unpack much of its $4.2 billion portfolio of mortgage-backed securities and Treasuries The recent Wall Street rally also comes at a relatively calm period of uncertainty and market anxiety. Concern over global conflicts, as well as uncertainty over domestic policy has led many investors to hold back on riskier investments.

Calm Before the Storm?

Recent activity has reached record level. Dow and S&P recorded their best and second best weekly gains this year, respectively. However, there remains major uncertainty over future market outlooks. There is still uncertainty over how the Trump Administration will effect changes to current financial regulations as well as trade policy. Additionally, concern over foreign policy and rising geopolitical tensions has led to an apprehensive investment market. Until this rebound, financial investing, as well as other markets, had seen a slump after an initial, post-election boost.

Investor Resources

If you want to find out more about the recent, record-setting weekly gains, read the full Reuters article. For questions about protecting your investments or investment-loss recovery contact our team. Our expert legal team is here to ensure that you don’t fall victim to financial scams or investment fraud.

The Federal Reserve recently announced that interest rate hikes likely, causing trading and investing to slow. Fed Chairwoman, Janet Yellen will most likely announce increases later this week, with several more expected throughout 2017. Rates will likely increase 0.75-1.00 percent, initially, according to a Reuters report. The Fed’s announcement considerably slowed the recent tech and industrial market rally Wall Street has been experiencing. Investors and securities traders are waiting to see how these increased rates will affect market holdings.

What’s the hype on the hike?

Fed Chairwoman, Janet Yellen, has been hinting that rate hikes should be expected for 2017. Economists use current and projected job growth as well as U.S. economic strength as determining factors in determining interest rate hikes. Recent reports on the U.S. Labor market indicate that the economy is able to sustain a series of interest rate hikes. Generally interest rate hikes correlate with a strengthening U.S. dollar.

Cause for concern?

While interest rate hikes typically indicate a strengthening economy, domestic and global political issues along with economic concerns at home and abroad have caused investors and trading experts to watch closely for the expected rate hike announcement. Despite a record-reaching post-election market rally, optimism has waned on Wall Street. Although traders and broker-dealers expressed excitement for expected deregulation under the Trump Administration, excitement has turned to anxiety under lack of policy detail. Also, despite a strengthening dollar, Reuters reports that gold prices have surged under uncertainty over European markets.

Investor Resources

Don’t let market wariness be an intimidater. The best thing you can do as an investor is be prepared. Savage Villoch, PLLC is here to serve our investor clients. If you have questions or concerns about how an expected rate hike will come into effect or want to learn more about protecting your investments, contact us today.

Big banks on Wall Street had been left unchecked for too long and the introduction of sub-prime lending tactics sealed the fate of U.S. financial stability. A culture of smoke-and-mirrors misleading consumers, coupled with a dire lack of regulatory oversight allowed big banks to run rampant. Years of bad banking tactics caught up with the U.S. economy in 2008, resulting in the worst economic recession seen in the country since the “Great Depression” of the 1930s. The effects were devastating.

The Effect

The fall-out left the country reeling. As Wall Street’s house-of-cards collapsed, consumers and legislatures were left scrambling to figure out what happened. Businesses folded, people lost jobs and housing, investments were liquidated and stocks bottomed out. As the dust began to settle and the economy eventually showed signs of re-righting itself, legislators gave the accountable parties a stern talking to and, for their part, big banks promised to change. And it seemed that way for a while…

Business as Usual for Big Banks

The recent scandal involving Wells Fargo’s accounts fraud has demanded a refreshed scrutiny of big banking ethics and practices and what we are finding is troubling. It seems that no lesson has been learned at all and big banks continue to be a breeding ground for greed and deceit. Wells Fargo is just the latest of the nation’s largest banks cultivating a pervasive, toxic culture. A report in Reuters shows that recently, in addition to illegal financial practices, banks also use coercion and bribery as regular means of business.

Broken Promises

Clearly, big banks have not learned the harsh lessons of the 2008 financial crisis. They continue to take advantage of consumers by taking money out of people’s pockets to line their own. Don’t be intimidated or mislead by big banks. If you believe that you have been victimized by big banking tactics or have suffered a financial loss at the hands of investment banks, contact Savage Villoch, PLLC today and get the tools to fight back.