Fed's new control over the market

EatMyShorts said: "If the Fed didn't already control the market, it does now. It looks like the first change will be in the financial arena. From what I understand, new loans will have tighter standards and investment banks may lose their ability to use so much leverage (Citigroup's ex-president Chuck Prince said C used SIV's to gain leverage to compete with the investment banks). After everything begins to settle, banks will see huge earning increases. Higher earnings will come from the banks playing it safe by charging higher rates to cover the increased risk. Once that risk is reduced drastically, all those loans and investments are golden. If the above information is correct.... I would expect investment banks' growth rate to slow significantly once the Fed tightens standards. I would also expect other banks' growth rate to slow some. CFC's earnings would suffer bigtime since their long arm will become short. They would see reduced sales and margins. If the above information is incorrect... Please tell me why and what the correct info is. What effect do you think the Fed's policy will have on the banks and/or economy? Which way do you think the banks' earnings will go?"

AlfredSokol said: "I think this would hurt financial stocks. I mean it sounds as if they plan on making it so the Fed can close any bank they want! Talk about adding some real instability to the market."

ratAphooey said: "I spent about a half hour reading this stuff and the new powers sound like complete crap."

pranith said: "I think fed want to get rid of the current situation in an good manner with out harming others. By this type of policy they canclose any type of bank they want."

StockMan69 said: "There is one major worry about the Fed being able to close a bank. Imagine how much damage a rumor like that could cause a financial institution? That typ e of power is unheard of."