if volcker is able to break up too big to fail (via the current unlimited fed backstop of banks like goldman sachs) get ready for another market crash and the dollar to rally. long term we’re gonna be better off but its going to be painful for usa + world in short term.
goldman’s special ‘bank holding company’ status gives them the following: As a result of the Global financial crisis of 2008, many traditional investment banks and finance corporations such as Goldman Sachs, American Express, CIT Group and General Motors Acceptance Corporation[3] successfully converted to bank holding companies in order to gain access to liquidity and funding. This arrangement allows them access to the Federal Reserve’s discount window and benefit from the Troubled Asset Relief Program, but the companies are now subject to more regulation and their ability to have exposure to risk will be limited.
excerpt from volcker article 1:
Goldman Sachs and other banks should give up their bank status if they want to avoid the ban on proprietary trading proposed by the White House, Paul Volcker, head of President Barack Obama’s Economic Recovery Advisory Board, said.
“The implication for Goldman Sachs or any other institution is, do you want to be a bank?” Mr Volcker said in a video interview with the Financial Times. “If you don’t want to follow those [banking] rules, you want to go out and do a lot of proprietary stuff, fine, but don’t do it with a banking licence.”
http://www.ft.com/cms/s/0/121fe9d0-1753-11df-94f6-00144feab49a.html
interview with volcker: http://www.ft.com/cms/s/0/780d9d64-175d-11df-87f6-00144feab49a.html?nclick_check=1